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Finolex Industries Ltd.

BSE: 500940 Sector: Industrials
NSE: FINPIPE ISIN Code: INE183A01016
BSE 00:00 | 27 May 407.85 0.25
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OPEN 414.95
PREVIOUS CLOSE 407.60
VOLUME 9279
52-Week high 635.00
52-Week low 283.00
P/E 14.06
Mkt Cap.(Rs cr) 5,061
Buy Price 405.50
Buy Qty 20.00
Sell Price 415.00
Sell Qty 50.00
OPEN 414.95
CLOSE 407.60
VOLUME 9279
52-Week high 635.00
52-Week low 283.00
P/E 14.06
Mkt Cap.(Rs cr) 5,061
Buy Price 405.50
Buy Qty 20.00
Sell Price 415.00
Sell Qty 50.00

Finolex Industries Ltd. (FINPIPE) - Director Report

Company director report

To the Members

Your directors have pleasure in presenting the Thirty-eighth annualreport together with the audited financial statements (both standalone and consolidated)for the financial year ended 31st March 2019.

State of the Company's affairs:

Financial Results

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Profit before depreciation & finance charges 64586.70 50925.18 65871.67 52467.01
Less: Finance charges 1227.21 981.65 1227.21 981.65
Profit before depreciation exceptional items and taxation 63359.49 49943.53 64644.46 51485.36
Less:i. Depreciation 7007.66 6060.46 7007.66 6060.46
ii. Exceptional item 2790.00 -- 2790.00 --
iii. Provision for taxation 18581.63 14028.59 18121.86 14791.54
Profit after depreciation exceptional items and taxation 34980.20 29854.48 36724.94 30633.36
Add/(Less) :
i. Retained earnings at the beginning of the year 121234.63 108643.55 124290.58 110981.30
ii. Re-measurement of defined benefit plans and income tax effect (307.51) (86.99) (307.51) (86.99)
iii. Share of Other Comprehensive - - 0.65 0.65
Income (OCI) of Associate for the year
iv. Dividend (12409.54) (14270.97) (12409.54) (14270.97)
v. Tax on dividend (2550.82) (2905.44) (2574.75) (2966.77)
Retained earnings at the end of the year 140946.96 121234.63 145724.37 124290.58
Earning per equity share:
Basic & Diluted (H/share) 28.19 24.06 29.59 24.69

Operations

The operational performance is summarized below:

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Revenue from Operations (see note 1) 309132.23 283140.60 309132.23 283140.60
Other Income 4157.01 2532.40 4041.13 2439.70
Total Income 313289.24 285673.00 313173.36 285580.30
Profit before tax 53561.83 43883.07 53445.95 43790.37
Share of profit of associate before tax - - 1400.84 1634.53
Profit after tax 34980.20 29854.48 36724.94 30633.36

 

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
PVC Resin
Production – in MTs 259503 262844 259503 262844
Sale – in MTs (including inter divisional): 255302 258767 255302 258767
Sale – in H Lakh (including inter divisional): 187417.44 177837.90 187417.44 177837.90
PVC Pipes and Fittings
Production – in MTs 259328 260387 259328 260387
Sale – in MTs 262858 252036 262858 252036
Sale – in H Lakh 257480.10 232883.72 257480.10 232883.72

Note 1: Revenue from operations includes excise duty collected forprevious Quarters up to Quarter ended 30th June 2017 as per guidelines prescribed in IndAs 18 "Revenue". From 1st July 2017 as per the said guidelines Goods andService Tax (GST) charged is excluded from Revenue from operation and to that extent therevenues are not comparable. Had the previously reported revenue shown net of excise dutycomparative revenue of the Company would have been as follows:

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Revenue from Operations (excluding excise duty) 309132.23 273778.80 309132.23 273778.80

During the financial year 40000 MT capacity was added to PVC pipes& fittings and with this addition the total capacity of PVC pipes & fittingsstands at 370000 MT p.a. The sales volume for PVC pipes & fittings was 262858 MT forthe financial year ended 31st March 2019 as against 252036 MT for the financial yearended 31st March 2018. Total standalone income from operations was at H 313289.24 lakhfor financial year ended 31st March 2019 against H 285673.00 lakh for the financial yearended 31st March 2018. Profit after tax was at H 34980.20 lakhs for the financial yearended 31st March 2019 as against H 29854.48 lakh for the financial year ended 31stMarch 2018.

Dividend

Your directors have recommended dividend on equity shares @ 100 % (H 10per equity share). The dividend on equity shares including corporate dividend tax ifapproved by the Members will absorb H 14960.36 lakh. As per Regulation 43A of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a Dividend Distribution Policy which has been uploaded on the Company'swebsite https://www. finolexpipes.com/investors/policies-code-of-conduct/ and is alsoenclosed as Annexure 1.

Transfer to Reserves

During the year amount transferred to General Reserve was H Nil(previous year H Nil). Thus the total comprehensive Income for the year of H (8654.12)lakh was transferred to Reserves and Surplus of Balance Sheet.

Deposits

The Company had no unpaid /unclaimed deposit(s) as on 31st March 2019.

During the year the Company has not accepted any deposits describedunder Chapter V of the Companies Act 2013.

Management discussion and analysis

Pursuant to Regulation 34 (2) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a management discussion and analysis reportforms part of this annual report.

Consolidation of financial statements

As at the end of the financial year your Company does not have anysubsidiary company. However it does have two associate companies namely Finolex PlassonIndustries Private Limited and Pawas Port Limited. The consolidated financial statementsas prepared pursuant to the provisions of Section 129 of the Companies Act 2013 (the"Act") and Schedule III of the Act are annexed and form part of this annualreport.

Revision in financial statements

There has been no revision in the financial statements of the Companyduring the financial year 2018 – 2019.

Subsidiary and Associate Companies

In terms of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial statements of the associate or joint venturecompanies in Form AOC-1 is annexed and forms part of this annual report.

Pursuant to Rule 8(1) of the Companies (Accounts) Rules 2014 theperformance and financial position of the associate or joint venture companies is includedin the consolidated financial statement which is annexed and forms part of this annualreport. During the financial year 2018-19 there is no change in associate companies ofthe Company.

The Company has formulated the policy on material subsidiaries inalignment with the provisions of Regulation 16 (i) (c) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. As required under Regulation 46 (2) (h) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the MaterialSubsidiary Policy has been uploaded on the Company's website https://www.finolexpipes.com/investors/policies-code-of-conduct/.

Pursuant to Regulation 34(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the related party disclosures as specified inPara A of Schedule V are given below:

In the accounts of Disclosure of amounts at the year end and the maximum amount of loans/advances/investments outstanding during the year
1. Holding Company • Loans and advances in the nature of loans to subsidiary by name and amount. No Holding Company.
• Loans and advances in the nature of loans to associates by name and amount.
• Loan and advances in the nature of loans to firms/companies in which directors are interested by name and amount.
2. Subsidiary Same disclosures as applicable to the parent company in the accounts of subsidiary company. No Subsidiary Company
3. Holding Company Investments by the loanee in the shares of parent company and subsidiary company when the company has made a loan or advance in the nature of loan. No Holding Company

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 your directorson the basis of information and documents made available to them confirm that: a) in thepreparation of the annual financial statements for the year ended on 31st March 2019 theapplicable accounting standards have been followed along with proper explanation relatingto material departures; b) the directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at 31stMarch 2019 and of the profit of the Company for the year ended on that period; c) thedirectors have taken proper and sufficient care for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; d)the directors have prepared the annual accounts on a going concern basis; e) the directorshave laid down internal financial controls to be followed by the Company and that suchinternal financial controls are adequate and were operating effectively; and f) thedirectors have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Corporate governance

A separate report on corporate governance in the compliance withcorporate governance requirements specified in Regulations 17 to 27 and clauses (b) to (i)of sub-regulation (2) of Regulation 46 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 along with compliance certificate dated 25th May 2019obtained from M/s. SVD & Associates Practicing Company Secretaries is annexed andforms part of this annual report.

Material changes and commitments

Your directors confirm that there are no material changes andcommitments affecting the financial position of the Company which have occurred betweenthe end of the financial year of the Company and the date of this report.

Contracts or arrangements with related parties

The particulars of related party transactions are stated in the noteno. 37 in the financial statements Annexures 3 4 and 6 of this report.

All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course ofbusiness of the Company. There are no materially significant related party transactionsmade by the Company with its Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict of interest with the Company atlarge. Accordingly the disclosure of Related Party Transactions as required under Section134(3) (h) of the Companies Act 2013 in Form AOC-2 is not applicable.

All related party transactions are placed before the Audit Committeefor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee for its approval on aquarterly basis.

The Company has developed a Related Party Transactions Manual StandardOperating Procedures for the purpose of identifying and monitoring such transactions.

The Related Party Transactions Policy of the Company approved by theBoard of Directors of the Company (the "Board") is uploaded on theCompany's website https:// www.finolexpipes.com/investors/policies-code-of-conduct/.

Risk management

During the financial year 2014-2015 your directors had constituted aRisk Management Committee. The details of Committee and its terms of reference are set outin the Corporate Governance Report forming part of this report.

The Company has a robust risk management framework to identifyevaluate business risks and opportunities. This framework seeks to create transparencyminimize adverse impact on the business objectives and enhance the Company'scompetitive advantage. The business risk framework defines the risk management approachacross the enterprise at various levels including documentation and reporting. Theframework has different risk models which help in identifying risks trend exposure andpotential impact analysis at a Company level as also separately for business segments.Risk management forms an integral part of the business planning and forecasting. The keybusiness risks identified by the Company and its mitigation plans are included in themanagement discussion and analysis report.

Internal financial controls

Pursuant to Rule 8 (5) (viii) of the Companies (Accounts) Rules 2014the details in respect of adequacy of internal financial controls with reference to thefinancial statements are given below: The Company has in place adequate internal controlprocedures proportionate to the nature of the business and the size of operations forsmooth conduct of business. The systems are implemented for safeguarding the assets theprevention and detection of fraud and errors the accuracy and completeness of theaccounting records and timely preparation of reliable financial information. The scope andauthority of the internal auditors are defined by the Audit Committee from time to time.To maintain its objectivity and independence the internal auditors M/s. Sharp and Tannanreport their observations to the Audit Committee of the Board. The internal auditorsmonitor and evaluate the efficacy and adequacy of internal control system in the Companyits compliance with operating systems accounting procedures and policies at all locationsof the Company. Based on the report of the internal auditors process owners undertakecorrective action in their respective areas which then strengthens the controls. Auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard.

Directors and Key Managerial Personnel:

The Board of your Company is duly constituted with a proper balance ofexecutive non-executive and independent directors. Pursuant to Section 149 (1) and 161 ofthe Companies Act 2013 read with Rule 8 (5) (iii) of the Companies (Accounts) Rules2014 the details relating to directors and key managerial personnel who were appointed orhave resigned are reported as under:

Resignation of Director

Mr. Kanaiyalal N. Atmaramani (DIN: 00129768) Non-Executive IndependentDirector of the Company has resigned from the directorship of the Company with effect from1st January 2019 due to personal reason including age related health issues and there areno other material reasons other than those provided.

Re-appointment of Director

Mrs. Ritu P. Chhabria (DIN:00062144) Non-Executive &Non-Independent Director retires by rotation as Director at the ensuing annual generalmeeting and being eligible offers herself for re-appointment. The Board recommends herre-appointment.

Appointment of Director

The Board of Directors has co-opted Mrs. Kanchan U. Chitale (DIN:00007267) as an Additional Director and also as Non-Executive Independent Woman Directorfor a term of 5 years effective 1st April 2019. Mrs. Kanchan U. Chitale holds office ofan additional director up to the date of the ensuing annual general meeting of theCompany. A notice has been received proposing Mrs. Kanchan U. Chitale as an IndependentWoman Director of the Company. The Board recommends her appointment.

Independent Directors

The Members of the Company at the 33rd Annual General Meeting of theCompany held on 20th September 2014 inter alia appointed 6 (six) Non-ExecutiveIndependent Directors of the Company namely Mr. Sanjay K. Asher Mr. Kanaiyalal N.Atmaramani Mr. Dara N. Damania Mr. Shrikrishna N. Inamdar Mr. Prabhakar D. Karandikarand Dr. Sunil U. Pathak for a term of 5 (five) consecutive years with effect from 20thSeptember 2014. The said term of these directors expires on 19th September 2019 and theyhave not offered their candidature for re-appointment by shareholders in the forthcomingannual general meeting. Mr. Kanaiyalal N. Atmaramani has tendered his resignation from thedirectorship of the Company with effect from 1st January 2019.

The Board places on record its deep sense of gratitude and appreciationfor immense contribution strategic guidance provided during their tenure as independentdirectors of the Company.

Key Managerial Personnel (KMP)

During the financial year 2018-19 there was no change in KMP of theCompany. As on date of this report Mr. Sanjay S. Math Managing Director Mr. Anil V.Whabi Director – Finance & Chief Financial Officer and Mr. Devang B. TrivediCompany Secretary are KMP of the Company.

Training and familiarization programme for directors

In compliance of the Regulation 25 (7) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has adopted thefamiliarization programme for independent directors with an aim to provide them with aninsight into their roles rights responsibilities within the Company the nature of thebusiness of the Company and the business model of the Company.

The Board members are provided with necessary documents reports andinternal policies to enable them to familiarize themselves with the Company'sprocedures and practices.

Periodic presentations are made at the Board and its CommitteeMeetings on business and performance updates of the Company the global businessenvironment business strategy and various risks involved. The updates on relevantstatutory changes and landmark judicial pronouncements encompassing important laws areregularly presented to the Directors. The details of the familiarization programme forindependent directors are available on the Company's website https://www.finolexpipes.com/investors/policies-code-of-conduct/.

Policy on directors' appointment and remuneration

The Company's Nomination and Remuneration Committee is governed byits terms of reference. The Company's Nomination and Remuneration Policy includesdirectors' appointment and remuneration including the criteria fordeterminingqualificationspositiveattributes independence of a director and other detailswhich are furnished in Annexure 2. The Company's Nomination and Remuneration Policyis also available on the Company's website https://www.finolexpipes.com/investors/policies-code-of-conduct/.

Annual performance evaluation of the Board its committees andindividual directors

The Company has devised a nomination and remuneration policy forperformance evaluation of independent non-executive and executive directors. The basisfor this evaluation include fulfillment of the independence criteria independence fromthe management qualification positive attributes area of expertise and the number ofdirectorships & memberships held in various committees of other companies. The Boardof Directors has carried out an annual evaluation of its own performance its committeesand the directors individually as per the requirements of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Remuneration of directors and key managerial personnel

Pursuant to the provisions of Section 197(12) of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the details of remuneration of directors and key managerialpersonnel are furnished in Annexure 3.

Particulars of employees

Disclosure pertaining to remuneration and other details as requiredunder Section 197(12)oftheCompaniesAct2013readwith Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are furnished inAnnexure 4.

Auditors and Auditors' Report:

Statutory Auditors

Pursuant to Section 139 of the Companies

Act 2013 and the Rules made thereunder M/s. P. G. Bhagwat CharteredAccountants Pune were appointed as the statutory auditors of the Company in the thirtysixth Annual General Meeting (AGM) of the Company held on 11th August 2017 for a periodof five (5) consecutive years until the conclusion of the 41st AGM to be held in the year2022 on such remuneration as shall be decided by the Board of Directors. The statutoryauditors have issued a certificate of eligibility pursuant to Section 141 of the CompaniesAct 2013 and they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.

Cost Auditors

The Board at its meeting held on 25th May 2019 has on recommendationof the Audit Committee appointed M/s. S. R. Bhargave & Co. as cost auditors toconduct an audit of cost accounting records of the Company for the financial year ending31st March 2020. Pursuant to the provisions of Section 148 of the Companies Act 2013 andRules made thereunder the ratification by the Members is necessary for the payment ofremuneration to cost auditors. Your directors recommend the same.

The Cost Audit Report for the financial year 2017-18 issued by M/s S.R. Bhargave & Co Cost Auditors in respect of the various products prescribed underCost Audit Rules was filed with the Ministry of Corporate Affairs on 5th September 2018.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed

M/s. SVD & Associates Practicing Company Secretaries Pune toundertake the secretarial audit of the Company for the financial year 2018-19. Thesecretarial audit report for the financial year 2018-19 is enclosed herewith as Annexure5.

There is no qualification reservation or adverse remark or disclaimermade by the Secretarial Auditor in the said Secretarial Audit Report. The Company hascomplied with all applicable secretarial standards.

Disclosures:

Your directors are pleased to furnish the following details which arerequired to be reported by the Company in the Director's Report pursuant to Section134(3) (a) to (q) of the Companies Act 2013:

Number of meetings of the Board

During the year under review seven meetings of the Board of Directorswere held. The details of the meetings are provided in the corporate governance report.

Committees of directors

The details of the committee of the directors pursuant to the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and the Companies Act2013 are described in the corporate governance report.

Audit committee

The Audit Committee has been duly constituted as required under theprovisions of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The required details pertaining to the composition of theAudit Committee pursuant to Section 177 (8) of the Companies

Act 2013 are given in the corporate governance report. There are noinstances of the Board not having accepted the recommendation of the Audit Committeeduring the financial year 2018-19.

Extract of annual return

Pursuant to Section 134(3)(a) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 the extract of annual return in the prescribed formatMGT-9 is enclosed herewith as Annexure 6.

Vigil mechanism / Whistle blower policy

The Company has established a vigil mechanism known as the WhistleBlower Policy (the "WBP") pursuant to Section 177(9) and (10) of the CompaniesAct 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 to report genuine concerns to the Chairman of the Audit Committee. TheWBP provides adequate safeguards against victimization of persons who use such mechanismand ensures direct access to the Chairman of the Audit Committee. The details of the WBPare explained in the corporate governance report and also posted on the Company'swebsite. The Company affirms that no director or employee has been denied access to theChairman of the Audit Committee and that no complaints were received during the year.

Sexual harassment policy

The Company has in place a policy for prevention of sexual harassmentof its employees at the workplace. In line with the requirements of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 an InternalComplaints' Committee has been constituted by the Company to redress any complaintsreceived regarding sexual harassment. Your directors state that during the year underreview there was no complaint received / case filed pursuant to the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.

Insider trading

In compliance with the provisions of the SEBI (Prohibition of InsiderTrading) Regulations 2015 and to preserve the confidentiality and prevent misuse ofunpublished price sensitive information (UPSI) the Company has adopted a Code of Conductto Regulate Monitor and Report Trading by Insiders (‘Insider Trading Code') anda Code of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation (‘Code of Fair Disclosure').

The Insider Trading Code is intended to prevent the misuse of UPSI byinsiders and connected persons and ensure that the Directors and designated persons of theCompany and their immediate relatives shall not derive any benefit or assist others toderive any benefit from having access to and possession of such UPSI about the Companywhich is not in the public domain that is to say insider information.

The Code of Fair Disclosure ensures that the affairs of the Company aremanaged in a fair transparent and ethical manner keeping in view the needs and interestof all the stakeholders.

Particulars of loans guarantees or investments

The details as applicable of loans given investments made orguarantees given pursuant to Section 186 of the Companies Act 2013 are disclosed in noteno. 4 to the financial statements for the financial year 2018-2019.

It is clarified that the Company has no loans/ advances and investmentsin its own shares.

Significant and material orders passed by the regulators or courts ortribunals

Pursuant to Rule 8 (5) (vii) of the Companies (Accounts) Rules 2014it is reported that no significant and material orders have been passed by the regulatorsor courts or tribunals impacting the going concern status of the Company and theCompany's operations in future.

Employee stock option scheme

During the year under review your directors confirm that no shareswere issued by the Company under the subsisting Finolex Industries Limited –EmployeeStock Option Scheme Plan (ESOP) of the Company.

Sweat equity shares and equity shares with differential voting rights

Your directors confirm that neither sweat equity shares nor equityshares with differential voting rights have been issued by the Company during the yearunder review.

The conservation of energy technology absorption foreign exchangeearnings and outgo

Your Company is committed to achieve the highest standards ofenvironmental excellence by adopting environmentally sustainable and effective operatingsystems and processes. Your Company has put in place the internationally acclaimedEnvironment Management System under ISO 14001 certification at Ratnagiri. Your Company isin compliance with all applicable environmental regulations in respect of air waternoise hazardous waste e-waste etc. to mitigate the potential environmental impact onsociety. Information on conservation of energy technology absorption foreign exchangeearnings and outgo required to be given under Section 134(3) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is enclosed herewith asAnnexure 7.

Details in respect of fraud reported by Auditors

There was no instance of fraud during the year under review whichrequired the Statutory Auditors to report to the Audit Committee Board and/or CentralGovernment under 143(12) of the Companies Act 2013 and rules framed thereunder.

Business Responsibility Report:

Business Responsibility Report for the year ended 31st March 2019 asstipulated under Regulation 34(2) (f) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is enclosed herewith as Annexure 8.

Corporate Social Responsibility:

The Board has constituted Corporate Social Responsibility (CSR)Committee and also framed the corporate social responsibility policy pursuant to Section135 of the Companies Act 2013. The details of the CSR Committee are given in thecorporate governance report.

The corporate social responsibility policy of the Company can be viewedon the Company's website https://www.finolexpipes.com/investors/policies-code-of-conduct/.

As a responsible corporate citizen your Company conducts CSRactivities in education healthcare sanitation skill developments social welfare andwater conservation with its CSR partner Mukul Madhav Foundation ("MMF"). YourCompany has been actively contributing to the social and economic development of theunderprivileged in and around your Company's plants situated at Ratnagiri and Urse inthe state of Maharashtra and at Masar in the state of Gujarat.

The CSR activities carried out by your Company through MMF is headed byMrs. Ritu P. Chhabria Managing Trustee of Mukul Madhav Foundation a driving force inaccomplishing the activities on day-to-day basis.

During the financial year 2018-19 your Company in association with MMFhas incurred expenditure on various CSR activities aggregating H 924.07 lakh against themandatory CSR expenses of H 859.18 lakh.

The detailed report on the CSR activities is enclosed herewith asAnnexure 9.

Cautionary statement

Statements in the Board of Directors' Report and the ManagementDiscussion

& Analysis describing the Company's objectives expectationsor forecasts may be within the meaning of applicable securities laws and regulations.Actual results may differ materially from those expressed in the statement. Importantfactors that could influence the Company's operations include global and domesticdemand and supply conditions affecting the selling prices of finished goods inputavailability and prices changes in government regulations tax laws economicdevelopments within the country and other factors such as litigation and industrialrelations.

Acknowledgements

Your directors take this opportunity to place on record their sense ofgratitude to the banks financial institutions central and state government departmentsand local authorities for their guidance and support. Your directors are also grateful tothe customers suppliers and business associates of the Company for their continuedco-operation and support. Your directors express their deep appreciation for thecommitment dedication and hard work put in by the employees at all levels. Lastly yourdirectors are grateful for the confidence and faith shown in them by the shareholders ofthe Company.

For and on behalf of the Board of Directors

Prakash P. Chhabria
10th August 2019 Executive Chairman
Pune DIN :00016017