To the Members
Your directors have pleasure in presenting the Fortieth annual reporttogether with the audited financial statements (both standalone and consolidated) for thefinancial year ended 31st March 2021.
State of the Company's affairs:
(Rs. in Crores)
|Particulars || |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Profit before depreciation & finance charges ||1061.79 ||478.28 ||1077.05 ||502.91 |
|Less: Finance charges ||7.27 ||11.28 ||7.27 ||11.28 |
|Profit before depreciation exceptional items and taxation ||1054.52 ||467.00 ||1069.78 ||491.63 |
|Less: i. Depreciation ||77.72 ||73.81 ||77.72 ||73.81 |
|ii. Provision for taxation ||248.78 ||68.99 ||254.27 ||85.17 |
|Profit after depreciation exceptional items and taxation ||728.02 ||324.20 ||737.79 ||332.65 |
|Add/(Less) : || || || || |
|i. Retained earnings at the beginning of the year ||1431.92 ||1409.47 ||1488.09 ||1457.24 |
|ii. Re-measurement of defined benefit plans and income tax effect ||0.23 ||(2.53) ||0.23 ||(2.53) |
|iii. Share of Other Comprehensive Income (OCI) of Associate for the year ||- ||- ||0.14 ||0.22 |
|iv. Dividend ||- ||(248.20) ||- ||(248.20) |
|v. Tax on dividend ||- ||(51.02) ||- ||(51.21) |
|vi. Share in Lease adjustments ||- ||- ||- ||(0.09) |
|Retained earnings at the end of the year ||2160.17 ||1431.92 ||2226.25 ||1488.09 |
|Earning per equity share: || || || || |
|Basic & Diluted (H/share) ||11.73 ||5.23 ||11.89 ||5.36 |
The operational performance is summarized below:
Rs. ( in Crores)
|Particulars || |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from Operations ||3462.82 ||2984.51 ||3462.82 ||2984.51 |
|Other Income ||72.48 ||30.84 ||71.55 ||29.91 |
|Total Income ||3535.30 ||3015.35 ||3534.37 ||3014.42 |
|Profit before tax ||976.80 ||393.19 ||975.87 ||392.26 |
|Share of profit of associate before tax ||- ||- ||16.19 ||25.56 |
|Profit after tax ||728.02 ||324.20 ||737.79 ||332.65 |
|PVC Pipes and Fittings || || || || |
|Production in MTs ||212706.43 ||263688.25 ||212706.43 ||263688.25 |
|Sale in MTs ||212059.62 ||254958.25 ||212059.62 ||254958.25 |
|Sale in H Crores ||2635.30 ||2553.95 ||2635.30 ||2553.95 |
|PVC Resin || || || || |
|Production in MTs ||225035.00 ||247392.63 ||225035.00 ||247392.63 |
|Sale in MTs (including inter divisional): ||236085.43 ||239188.34 ||236085.43 ||239188.34 |
|Sale in H Crores (including inter divisional): ||2273.31 ||1677.69 ||2273.31 ||1677.69 |
The total capacity of PVC pipes & fittings stands at 370000 MTp.a. The sales volume for PVC pipes & fittings was 212059.62 MT for the financialyear ended 31st March 2021 as against 254958.25 MT for the financial year ended 31stMarch 2020. Total standalone income was at Rs. 3535.30 Crores for the financial yearended 31st March 2021 against Rs. 3015.35 Crores for the financial year ended 31stMarch 2020. Profit after tax was at Rs. 728.02 Crores for the financial year ended 31stMarch 2021 as against Rs. 324.20 Crores for the financial year ended 31st March 2020.
The Financial Year 2020-21 began with the pandemic situation caused bythe spread of the Corona virus COVID-19 all over the world. The operations were disruptedat all the manufacturing facilities of the Company. Your Company had to put a halt on itsoperations for some period during March 2020 to April 2020 considering the wellness andsafety of its employees and complying with Government and Health authorities'advisory during lockdown. Subsequent to receipt of permissions from the authorities theCompany resumed operations in phased manner by focusing on the safety and well-being ofall stakeholders. In these circumstances your Company has worked tirelessly to addressthe challenges and implemented necessary changes needed commensurate with theCompany's business requirements and your Company provided the required support to theworkforce. These measures are naturally being monitored on a regular basis to ensure aprogressive return to the desired growth rates. After commencement of operations thebusiness and operations of the Company have gradually scaled up to almost normal operatinglevels. The uncertainty around the resurgence of second wave across India towards end ofMarch 2021 is being closely monitored and all necessary actions have been taken.
Sub-division of shares
Pursuant to the approval granted by the Members of the Company on 26thMarch 2021 through Postal Ballot each existing Equity Share having face value of H 10/-(Rupees Ten) each has been sub-divided into 5 (Five) Equity Shares having face value of H2/- (Rupees Two) each w.e.f. 16th April 2021 (Record Date). Consequent upon the aforesaidsub-division the Company has issued fully paid up equity shares having face value of H2/- (Rupees Two) each to all the Members of the Company as on 16th April 2021 i.e. RecordDate as per their entitlement on that date.
As a result the authorized Share Capital of the Company is H2350000000/- (Rupees Two Hundred Thirty Five Crores only) classified as equity sharecapital aggregating to H 1500000000/- (Rupees One Hundred Fifty Crores only) dividedinto 750000000 (Seventy Five Crores) equity shares of H 2/- (Rupees Two only) each andunclassified share capital aggregating to H 850000000/- (Rupees Eighty Five Croresonly) divided into 85000000 (Eight Crore Fifty Lakhs) shares of H 10/- (Rupees Tenonly).
The issued subscribed and paid-up equity share capital of the Companyis H 1240953810 (Rupees One Hundred Twenty Four Crores Nine Lakhs Fifty ThreeThousand Eight Hundred Ten only) divided into 620476905 equity shares of H 2 each.Further Clause V of the Memorandum of Association and Article 3 of the Articles ofAssociation of the Company relating to Capital Clause were amended with effect from 26thMarch 2021 i.e. the deemed date of passing of the relevant resolutions through postalballot. Necessary approvals from the Stock Exchanges for split of shares and NSDL/CDSL forassignment of new ISIN INE183A01024 were obtained.
Accordingly equity shares and earning per share have been adjusted forshare split in accordance with IND AS 33 Earning Per Share' read with Ind AS 10Events after Reporting Period'.
The Board of Directors has recommended dividend at 200% i.e. finaldividend at 100% i.e. H 2 per equity share and a special dividend at 100% i.e. H 2 perequity share (subject to deduction of tax at source). The dividend on equity shares ifapproved by the Members will absorb H 248.19 Crores. As per Regulation 43A of theSEBI (Listing Obligations and Disclosure Requirements Regulations 2015 ("ListingRegulation") the Company has formulated a Dividend Distribution Policy which has beenuploaded on the Company's website https://www.finolexpipes.com/investors/policies-code-of-conduct/.
Transfer to Reserves
During the year amount transferred to
General Reserve was H Nil (previous year H Nil). Thus the totalcomprehensive Income for the year of H 1143.07 Crores [Previous year H (299.40) Crores]was transferred to Reserves and Surplus of Balance Sheet.
During the year the Company has not accepted any deposits from publicdescribed under Chapter V of the Companies Act 2013 and as such no amount on account ofprincipal or interest on deposits from public was outstanding as on the date of thebalance sheet. The Company had no unpaid /unclaimed deposit(s) as on 31st March 2021.
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 FinolexPlasson Industries Private Limited' and Pawas Port Limited'.
The Company has consolidated financials of Finolex Plasson IndustriesPrivate Limited. The Company has not consolidated financials of an immaterial associateviz. Pawas Port Limited' in which the Company holds 49.99% equity shares (H0.05 Crores) and has not started operations.
The consolidated financial statements as prepared pursuant to theprovisions of Section 129 of the Companies Act 2013 (the "Act") and ScheduleIII of the Act are annexed and form part of this annual report.
Revision in financial statements
There has been no revision in the financial statements of the Companyduring the financial year 2020 2021.
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)Rules2014theperformance and financial position of the associate or jointventure companies is included in the consolidated financial statements which is annexedand forms part of this annual report.
During the financial year 2020-21 there is no change in associatecompanies of the 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 websitehttps://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:
|Sr. No. ||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. || |
| || ||Loans and advances in the nature of loans to associates by name and amount. ||No Holding |
| || ||Loan and advances in the nature of loans to firms/companies in which directors are interested by name and amount. ||Company. |
|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 the preparation of the annual financial statements for the yearended on 31st March 2021 the applicable accounting standards have been followed alongwith proper explanation relating to material departures;
b) the directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31st March 2021and of the profit of the Company for the year ended on that period;
c) the directors have taken proper and su_cient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the directors have prepared the annual accounts on a going concernbasis;
e) the directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
f) the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
A separate report on corporate governance in the compliance withcorporate governance requirements specified in Regulations 17 to 27 and clauses (b) to (i)and (t) of sub-regulation (2) of Regulation 46 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 along with compliance certificate dated 25thJune 2021 obtained from M/s. SVD & Associates Practicing Company Secretaries isannexed and forms 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. 36 in the financial statements and Annexure-2 of this report.
None of the transactions with related parties falls under the scope ofSection 188(1) of the Act. All related party transactions that were entered into duringthe financial 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 and hence does notform part of this report. All related party transactions are placed before the AuditCommittee for approval. The Company has developed a Related Party Transactions ManualStandard Operating Procedures for the purpose of identifying and monitoring suchtransactions.
In line with the requirements of the applicable provisions of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formulated a Policy on Related Party Transactions andthe same is available on website of the Company at https://www.finolexpipes.com/investors/policies-code-of-conduct/.
During the financial year 2014-2015 your directors had constituted aRisk Management Committee. The Risk Management Committee was reconstituted with effectfrom 20th September 2019. 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 robustrisk management framework to identify evaluate business risks and opportunities. Thisframework seeks to create transparency minimize adverse impact on the business objectivesand enhance the Company's competitive advantage. The business risk framework definesthe risk management approach across the enterprise at various levels includingdocumentation and reporting. The framework has different risk models which help inidentifying risks trend exposure and potential impact analysis at a Company level as alsoseparately for business segments. Risk management forms an integral part of the businessplanning and forecasting. The key business risks identified by the Company and itsmitigation plans are included in the management 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 and authority of the internal auditors are defined by theAudit Committee from time to time. To maintain its objectivity and independence theinternal auditors M/s. Ernst & Young LLP report their observations to the AuditCommittee of the Board. The internal auditors monitor and evaluate the e_cacy and adequacyof internal control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company. Based on the report ofthe internal auditors process owners undertake corrective action in their respectiveareas which then strengthens the controls. Audit observations and corrective actionsthereon are presented to the Audit Committee of the Board. Based on the work performed bythe internal statutory and secretarial auditors and external consultants including theaudit of internal financial controls over financial reporting by the statutory auditorsand the reviews performed by management the Board is of the opinion that theCompany's internal financial controls were adequate and effective during FY 2020-21.
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 of the Companies Act 2013 readwith Rule 8 (5) (iii) of the Companies (Accounts) Rules 2014 the details relating todirectors and key managerial personnel who were appointed or have resigned are reported asunder:
1) Re-appointment of Director
Mr. Saurabh S. Dhanorkar (DIN:00011322) Non-Executive &Non-Independent Director retires by rotation as Director at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment. The Board recommends hisre-appointment.
2) Independent Directors
Ms. Bhumika L. Batra (DIN 03502004) Mrs. Kanchan U. Chitale (DIN00007267) Dr. Deepak R. Parikh (DIN 06504537) Mr. Pradeep R. Rathi (DIN 00018577)and Mr. Anami N. Roy (DIN 01361110) are Non-Executive Independent Directors of theCompany. Pursuant to Section 149(7) of the Companies Act 2013 all Independent Directorshave submitted declaration that:
A) Each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe SEBI Listing Regulations;
B) They are not aware of any circumstance or situation which exist ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgment and without any external influencepursuant to Regulation 25 of the Listing Regulations and there has been no change in thecircumstances affecting their status as independent directors of the Company;
C) They have complied with the requirement of inclusion of their namein the data bank maintained by Indian Institute of Corporate Affairs as envisaged underCompanies (Appointment and Qualification of Directors) Fifth Amendment Rules 2019 asapplicable and they hold valid registration certificate with Data Bank of IndependentDirectors; The Board is of opinion that the independent directors are persons of highintegrity and possess the requisite expertise and experience (including the proficiency).
3) Key Managerial Personnel (KMP)
During the year under review Mr. Devang Trivedi Company SecretaryCompliance O_cer and Key Managerial Personnel ceased to be employed by the Company fromclose of business hours of 8th June 2020. Mr. Ashutosh B. Kulkarni was appointed asCompany Secretary Compliance O_cer and Key Managerial Personnel of the Company witheffect from 26th October 2020. Pursuant to the provisions of Section 203 of the CompaniesAct 2013 Mr. Sanjay S. Math Managing Director Mr. Anil V. Whabi Director Finance & Chief Financial O_cer and Mr. Ashutosh B. Kulkarni Company Secretary arethe Key Managerial Personnel of the Company as on March 31 2021.
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 areprovided with necessary documents reports and internal policies to enable them tofamiliarize themselves with the Company's procedures and practices. Periodicpresentations are made at the Board and its Committee Meetings on business andperformance updates of the Company the global business environment business strategy andvarious risks involved.
The updates on relevant statutory changes and landmark judicialpronouncements encompassing important laws are regularly presented to the Directors.
The details of the familiarization programme for independent directorsare 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 for determiningqualifications positive attributes independence of a director and other details whichare furnished in Annexure-1.
The Company's Nomination and Remuneration Policy is also availableon 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.
In a separate meeting of independent directors performance ofnon-independent directors the Board as a whole and Chairman of the Company was evaluatedtaking into account the views of executive directors and non-executive directors. Theabove criteria are broadly based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on 5th January 2017.
The Board and the Nomination and Remuneration Committee reviewed theperformance of individual directors on the basis of criteria such as the contribution ofthe individual director to the board and committee meetings. At the board meeting theperformance of the Board its Committees and individual directors was also discussed.Performance evaluation of independent directors was done by the entire Board excludingthe independent director being evaluated.
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-2.
Particulars of employees
In accordance with the provisions of Section 197(12) of the Act readwith Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the names and other particulars of employees drawing remuneration in excess of thelimits set out in the aforesaid Rules forms part of this Report. Further the Report andthe Accounts are being sent to the Members excluding the aforesaid annexure. In terms ofSection 136(1) of the Act any Member who is interested in obtaining these may write tothe Company Secretary at email@example.com. The same is also open forinspection during working hours at the Registered O_ce of the Company.
Auditors and Auditors' Report
Pursuant to Section 139 of the Companies Act 2013 and the Rules madethereunder P G Bhagwat LLP Chartered Accountants Pune were appointed as the statutoryauditors of the Company in the thirty sixth Annual General Meeting (AGM) of the Companyheld on 11th August 2017 for a period of five (5) consecutive years until the conclusionof the 41st AGM to be held in the year 2022 on such remuneration as shall be decided bythe Board of Directors.
The statutory auditors have issued a certificate of eligibilitypursuant to Section 141 of the Companies Act 2013 and they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India.
The Board at its meeting held on 31st May 2021 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 2022. 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 Reportfor the financial year 2019-20 issued by M/s. S. R. Bhargave & Co. Cost Auditors inrespect of the various products prescribed under Cost Audit Rules was filed with theMinistry of Corporate Affairs on 11th November 2020.
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 2020-21. Thesecretarial audit report for the financial year 2020-21 is enclosed herewith asAnnexure-3.
The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.
The statutory auditor's report and the secretarial auditor'sreport do not contain any qualifications reservations or adverse remarks or disclaimer.
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 six 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 committees 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.
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 the AuditCommittee pursuant to Section 177 (8) of the Companies Act 2013 are given in thecorporate governance report. There are no instances of the Board not having accepted therecommendation of the Audit Committee during the financial year 2020-21.
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act2013 read with Companies (Management and Administration) Rules 2014 the annual return ofthe Company for the financial year 31st March 2021 is available on the website of theCompany and can be accessed at https://www.finolexpipes.com/investors/policies-code-of-conduct/.
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 a_rms that no director or employee has been denied accessto the Chairman of the Audit Committee and that no complaint was received during the year.
Prevention of 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.
Prohibition of 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 Company has in place the digitalstructured database to monitor the insider trading activities.
The said Code of Conduct 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 2020-2021. It is clarified thatthe Company has no loans/ advances and investments in 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 Finolex Industries Limited Employee StockOption Scheme/ Plan (ESOP) of the Company.
A statement giving complete details as at 31st March 2021 pursuantto Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations 2014 isavailable on the Company's website https://www.finolexpipes.com/investors/policies-code-of-conduct/.
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 14001certification 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 foreignexchange earnings and outgo required to be given under Section 134(3) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is enclosedherewith as Annexure-4.
Details in respect of fraud reported by Auditors
During the year under review the statutory auditors or the secretarialauditors or the Cost auditors have not reported to the audit committee/ Board and/orCentral Government under Section 143 (12) of the Companies Act 2013 and Rules framedthereunder any instances of fraud committed against the Company by its o_cers oremployees the details of which would need to be mentioned in the Board's report.
Business Responsibility Report
Business Responsibility Report for the year ended 31st March 2021 asstipulated under Regulation 34(2) (f) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is enclosed herewith as Annexure-5.
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 required details pertaining to the composition of theCSR Committee are given in the corporate governance report.
The Company has revised CSR policy and terms of reference of CSRcommittee pursuant to the Companies (CSR) Amendment Rules 2021.
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 citizenyour Company conducts CSR activities in education healthcare sanitation skilldevelopments social welfare water conservation and women empowerment with its CSRpartner Mukul Madhav Foundation ("MMF"). Your Company has been activelycontributing to the social and economic development of the underprivileged mainly in andaround your Company's plants situated at Ratnagiri and Urse in the state ofMaharashtra and at Masar in the state of Gujarat. In fiscal 2021 the Company's CSRefforts included COVID-19 relief in multiple states. The CSR activities carried out byyour Company through MMF is headed by Mrs. Ritu P. Chhabria Managing Trustee of MukulMadhav Foundation a driving force in accomplishing the activities on day-to-day basis.
During the financial year 2020-21 your Company in association with MMFhas incurred expenditure on various CSR activities aggregating Rs. 9.00 Crores against themandatory CSR expenses of Rs. 8.81 Crores.
The Annual report on the CSR activities is enclosed herewith asAnnexure-6.
Statements in the Board of Directors' Report and the ManagementDiscussion & Analysis describing the Company's objectives expectations orforecasts may be within the meaning of applicable securities laws and regulations. Actualresults may differ materially from those expressed in the statement. Important factorsthat could influence the Company's operations include global and domestic demand andsupply conditions affecting the selling prices of finished goods input availability andprices changes in government regulations tax laws economic developments within thecountry and other factors such as litigation and industrial relations.
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 regret the loss oflife due to Covid pandemic and are deeply grateful and have immense respect for everyperson who risked their life and safety to fight this pandemic. Your directors are alsograteful to the customers suppliers and business associates of the Company for theircontinued co-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 |
|25th June 2021 ||Executive Chairman |
|Place: London ||DIN :00016017 |