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Finolex Industries Ltd			Industry : Plastics Products


BSE Code:	500940	NSE Symbol:	FINPIPE	P/E(TTM):	36.23

ISIN Demat:	INE183A01024	Div & Yield %:	0.81	EPS(TTM):	8.44

Book Value(Rs):	89.2582034	Market Cap ( Cr.):	18971.08	Face Value(Rs):	2

Change Company

To the Members,

The Board of Directors are delighted to present the 43^rd (Forty-Third) Annual Report on the business and operations of Finolex Industries Limited ("the Company") along with the summary of standalone and consolidated audited financial statements for the year ended March 31, 2024.

Overview of Financial Performance:

Financial Results

( in Crore)

	Standalone		Consolidated
Particulars	2023-24	2022-23	2023-24	2022-23
Profit before depreciation and finance charges	765.96	413.92	803.02	437.72
Less: Finance charges	36.45	27.23	36.45	27.23
Profit before depreciation and taxation	729.51	386.69	766.57	410.49
Less: i. Depreciation	116.02	89.20	116.02	89.20
ii. Provision for taxation	158.19	60.90	176.96	70.59
Profit after depreciation and taxation	455.30	236.59	473.59	250.70
Add/(Less) :
i. Retained earnings at the beginning of the year	2,960.47	2,972.33	3,038.64	3,036.38
ii. Re-measurement of defined benefit plans and income tax effect	(2.43)	(0.26)	(2.46)	(0.24)
iii. Dividend	(92.75)	(248.19)	(92.75)	(248.19)
Retained earnings at the end of the year	3,320.58	2,960.47	3,417.02	3,038.64
Earning per equity share (in )	7.36	3.82	7.66	4.04

Operations

The operational performance is summarized below:

	Standalone		Consolidated
Particulars	2023-24	2022-23	2023-24	2022-23
Revenue from Operations	4,317.43	4,397.05	4,317.43	4,397.05
Other Income	181.11	121.38	179.95	120.92
Total Income	4,498.54	4,518.43	4,497.38	4,517.97
Profit before tax	613.49	297.49	612.33	297.03
Share of profit of associate before tax	-	-	38.22	24.26
Profit after tax	455.30	236.59	473.59	250.70
PVC Pipes and Fittings
Production – in MTs	3,33,311	3,01,830	3,33,311	3,01,830
Sale – in MTs	3,36,577	3,03,026	3,36,577	3,03,026
Sale – in Crore	4,185.15	4,113.28	4,185.15	4,113.28
PVC Resin
Production – in MTs	2,09,787	2,32,463	2,09,787	2,32,463
Sale – in MTs (including inter divisional):	1,96,542	2,39,638	1,96,542	2,39,638
Sale – in Crore (including inter divisional):	1,485.81	2,271.02	1,485.81	2,271.02

Total Production capacity of PVC Pipes is 4,20,000 MT p.a. and Fittings is 50,000 MT p.a. The sales volume for PVC pipes & fittings was 3,36,577 MT for the financial year ended March 31, 2024 as against 3,03,026 MT for the financial year ended March 31, 2023. Total standalone income was at 4,498.54 Crore for the financial year ended March 31, 2024 against 4,518.43 Crore for the financial year ended March 31, 2023. Profit after tax was at 455.30 Crore for the financial year ended March 31, 2024 as against 236.59 Crore for the financial year ended March 31, 2023.

Dividend

Your Directors recommend a dividend 2.50 per equity share of 2/- each (previous year 1.50). Dividend is subject to approval of members at the ensuing Annual General Meeting and subject to deduction of tax at source.

The dividend payout is in accordance with the Company's Dividend Distribution Policy as formulated and adopted by the Board and can be accessed at the link: https://www.finolexpipes.com/site/assets/ files/12927/dividend_distribution_policy.pdf.

Transfer to Reserves

As permitted under the Act, the Board does not propose to transfer any amount to general reserve and has decided to retain the entire Income for FY 2024 of 805.69 Crore (previous year 1,202.64 Crore) in the profit and loss account.

Deposits

The Company has not accepted any deposits from public during the year under review as described under Chapter V of the Companies Act, 2013. No amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Change in the Nature of Business

There has been no change in the nature of business of the Company, during the period under review.

Management Discussion and Analysis

Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘Listing Regulations'), a separate section on Management Discussion and Analysis Report which also covers the operations reflecting the nature of business, forms an integral part of this Annual Report.

Consolidated Financial Statements

As at the end of the financial year 2023-2024, your Company does not have any subsidiary Company. However, it does have two associate companies namely ‘Finolex Plasson Industries Private Limited' and ‘Pawas Port Limited'.

Your Company has consolidated the financials of Finolex Plasson Industries Private Limited. Further, it is pertinent to note that, your Company has not consolidated financials of an immaterial associate viz. ‘Pawas Port Limited', in which your Company holds 49.99% equity shares (0.05 Crore), which has not started any operations.

In accordance with the provisions of Section 129 of the Companies Act, 2013 (the "Act") Schedule III of the Act and the Listing Regulations read with IND AS -110 Consolidated Financial Statements and IND AS -28 Investments in Associates, the consolidated financial statements are annexed and forms part of this Annual Report.

Revision in financial statements

There has been no revision in the financial statements of the Company during the financial year 2023-24.

Subsidiary and Associate Companies

In terms of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the associate or joint venture company(ies) in Form AOC-1, which forms an integral part of this Annual Report.

Pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014, the performance and financial position of the associate or joint venture companies is included in the consolidated financial statements which forms integral part of this Annual Report.

During the financial year 2023-24, there is no change in associate company(ies) of the Company.

The Company has formulated the policy on material subsidiaries in consonance with the provisions of Regulation 16(i)(c) of the Listing Regulations. As required under Regulation 46(2)(h) of the said Regulations, Material Subsidiary Policy has been uploaded on the Company's website and can be accessed through https://www.finolexpipes.com/site/ assets/files/12930/policy_on_material_subsidiary-1.pdf.

Pursuant to Regulation 34(3) of the Listing Regulations, the related party disclosures as specified in Para A of Schedule V are given below:

Sr. No. In the accounts of	Disclosure of amounts at the year end and maximum amount of loans/ advances/investments outstanding during the year	Remarks
1. Holding Company	ⁿ Loans and advances in the nature of loans to subsidiary by name and amount.
	ⁿ Loans and advances in the nature of loans to associates by name and amount.	Refer Note below.
	ⁿ 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.	Refer Note below.
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.

Note : Since the Company has no holding and subsidiary company, nothing is required to be reported here.

Related Party Transactions

The related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business of the Company and prior omnibus approval is obtained for related party transactions which are of repetitive nature.

There were no materially significant related party transactions which could have potential conflict with the interests of the Company at large. None of the transactions with related parties falls under the scope of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 does not apply to the Company for FY 2024 and hence the same is not provided.

Particulars of related party transactions are stated in note no. 37 in the financial statements.

Your Company has formulated a policy on related party transactions and on dealing with related party transactions (‘RPT Policy'). The Policy is available on Company's website and can be accessed through https://www.finolexpipes.com/site/assets/files/12932/ related_partyfitransactions_policy.pdf

Corporate Governance

Your Company is committed to highest corporate governance practices. Pursuant to Regulation 34 read with Schedule V of the Listing Regulations, a separate section on the Corporate Governance Report, forms an integral part of Annual Report. A certificate from Practicing Company Secretary confirming compliance with corporate governance norms, is annexed to the Corporate Governance Report.

Material changes and commitments

There have been no material changes or commitments that have affected the financial position of the Company between the close of FY 2024 and the date of this report. There has been no change in the nature of business of the Company.

Risk Management

The Risk Management Committee was duly constituted by the Board in compliance with the provisions of the Listing Regulations, details of the Committee along with terms of reference are provided in the Corporate Governance Report.

The Company has a robust risk management policy and framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The frame work has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level and also separately for business segments. Risk Management forms an integral part of the business planning and forecasting. The key business risks identified by the Company and its mitigation plans are included in the Management Discussion and Analysis Report.

Internal Financial Controls and their adequacy

The Company had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information.

Directors and Key Managerial Personnel

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Saurabh Dhanorkar (DIN: 00011322), Non-Executive & Non-Independent Director of the Company, who retired by rotation in terms of Section 152(6) of the Act, was re-appointed by the members at the 42^nd Annual General Meeting held on August 28, 2023.

Mr. Ajit Venkataraman (DIN: 07289950), was appointed as Managing Director, for a term of 5 years commencing from June 1, 2023, and such appointment was also approved by the Members at the 42^nd Annual General Meeting held on August 28, 2023.

Mr. Anil Whabi (DIN: 00142052) superannuated as Managing Director of the Company on May 31, 2023. The Board places on record its sincere appreciation for the contribution made by him during his tenure as Managing Director.

The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee her re-appointment and in accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Ritu Chhabria (DIN: 00062144), retires by rotation and being eligible offers herself for re-appointment.

Key Managerial Personnel (KMP)

As on March 31, 2024, the following are Key Managerial Personnel ("KMPs") of the Company as per Sections 2(51) and 203 of the Act:

Mr. Ajit Venkataraman, Managing Director (w.e.f. June 1, 2023); & Mr. Niraj Kedia, Chief Financial Officer. (ceased w.e.f. June 30, 2024).

Mr. Ashutosh B. Kulkarni, resigned and ceased as Company Secretary and Key Managerial Personal of the Company w.e.f. close of business hours of January 14, 2024. The Board placed on record its sincere appreciation for the contribution made by him over the years.

The Board of Directors on recommendation of Nomination and Remuneration Committee appointed Mr. Dakshinamurthy Iyer, as Company Secretary, Compliance Officer and Key Managerial Personnel with effect from May 10, 2024.

Re-appointment of Independent Directors for a second term

The Board recommends the re-appointment of Ms. Bhumika L. Batra (DIN: 03502004), Dr. Deepak R. Parikh (DIN: 06504537), Mr. Pradeep R. Rathi (DIN: 00018577) and Mr. Anami N. Roy (DIN: 01361110), as Independent Directors of the Company for a second term of 5 (five) consecutive years commencing from 20^th September 2024 upto 19^th September 2029 (both days inclusive), not liable to retire by rotation, for approval of members by way of a Special Resolution at the ensuing 43^rd AGM.

The resolutions for the aforesaid respective appointment(s) / re-appointment(s) including payment of their remuneration / commission and details of their brief resume, nature of expertise in specific functional areas, disclosure of relationship between directors inter-se, names of the listed entities in which the person also holds directorship and the membership of the Committee of the Board of Directors and shareholding in the Company as required pursuant to Listing Regulations and Secretarial Standards on General Meetings (SS-2) are contained in the notice of the ensuing annual general meeting.

The Board recommends the re-appointment of Independent Directors as stated above and payment of commission.

Independent Directors

All the Independent Directors of the Company have given declarations that: a) they meet the criteria of independence as laid down under the Act and the Listing Regulations; b) they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective of independent judgment and without any external influence pursuant to Regulation 25 of SEBI Listing Regulations; c) In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied with the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors and complied with the requirements of passing proficiency test, as applicable. d) they have registered their names in the Independent Directors' Databank.

Based on the confirmations/ disclosures received from the Independent Non-Executive Directors in terms of Regulation 25 of the SEBI Listing Regulations along-with a certificate issued by M/s. SVD & Associates, Practising Company Secretaries, (Peer Review No: 669/2020) Secretarial Auditors of the Company, the Board of Directors is of the opinion that the Independent Non-Executive Directors are of integrity and possess the requisite expertise and experience.

Board Meetings

The Board meets at regular intervals to discuss and decide on the Company's/business policy and strategy apart from other Board business. The Board exhibits strong operational oversight with regular presentations in quarterly meetings. During FY 2023-24, 7 (seven) Board Meetings were held, the details thereof have been provided in the Corporate Governance Report.

Committees of the Board

As required under the Act and the Listing Regulations, the Company has constituted the following statutory committees:

ⁿ Audit Committee

ⁿ Nomination and Remuneration Committee

ⁿ Stakeholders Relationship Committee

ⁿ Risk Management Committee

ⁿ Corporate Social Responsibility Committee

Details of all the Committees such as terms of reference, composition, and meetings held during the year under review are disclosed in the Corporate Governance Report, and forms an integral part of this Annual Report.

Familiarization Programme for Directors

The Company has put in place a familiarization programme for its Directors including the independent directors in compliance of Regulation 25(7) of SEBI Listing Regulations.

The details of the familiarization programme for independent directors are available on the website of the Company and can be accessed through https:// www.finolexpipes.com/investors/compliance-report/

Policy on Directors' appointment and remuneration

The Company has adopted a Nomination and Remuneration Policy for nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees, pursuant to the Act and SEBI Listing Regulations, as amended from time to time.

Remuneration paid to Directors/KMP/SMP is as per the terms laid out in the said policy, which can be accessed through https://www.finolexpipes.com/site/ assets/files/18437/nomination_andfiremunaration_ policy.pdf

Board Evaluation

The Company has put a mechanism in place to evaluate the performance of the Board, its Committees and individual Directors in accordance with various parameters suggested by the Nomination and Remuneration Committee like Board/Committee composition, size, diversity, skill sets, Board process, frequency of meetings, information flow, oversight of financial reporting and control process, leadership skills and qualities, productive use of domain knowledge and experience, effective participation, etc. For further details, please refer to Corporate Governance Report, which forms part of this Annual Report.

Details pursuant to Section 197(12) of the Companies Act, 2013

The information required under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure – 1 and forms integral part of this Report.

Statutory Auditors and Auditors' Report

The Company has appointed M/s. Walker Chandiok & Co. LLP, Chartered Accountants, (Firm Registration No. 001076N/N500013), as Statutory Auditors of the Company for a period of five (5) years at the Forty-First (41^st) Annual General Meeting of the Company held on August 30, 2022.

Your Company's standalone and consolidated financial statements have been prepared in accordance with Ind AS notified under Section 133 of the Act.

The report of the Statutory Auditors on the Standalone and Consolidated Audited Financial Statements for the financial year ended March 31, 2024 is annexed and forms integral part of this Annual Report. The Auditors' Report does not contain any qualifications, reservations, adverse remarks or disclaimers and hence do not call for any comments.

Statutory Auditors of the Company have not reported any fraud for the year under review.

Cost Records and Cost Auditors

Pursuant to the provisions of Section 141 read with Section 148 of the Act and Rules made thereunder, the Company had appointed M/s. S. R. Bhargave & Co., Cost Accountants (Firm Registration Number: 000218) as Cost Auditors of the Company for conducting cost audit for FY 2023-24.

In accordance with Section 148(1) of the Act, the Company has maintained accounts and cost records for the financial year 2023-24.

The Cost Audit Report for FY 2022-23, issued by M/s. S. R. Bhargave & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules, does not contain any qualifications, reservations, adverse remarks or disclaimers and the same was filed with the Ministry of Corporate Affairs on October 4, 2023.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules framed thereunder, the Company had appointed M/s. SVD

& Associates, Practicing Company Secretaries, Pune (Peer Review No: 669/2020) to carry out secretarial audit of the Company for the financial year 2023-24. The Secretarial Audit Report for the financial year 2023-24, is annexed as Annexure – 2 and forms integral part of this Report.

The Secretarial Auditor's Report do not contain any qualifications, reservations, or adverse remarks or disclaimer.

Secretarial Standards

Your Company has devised proper systems to ensure compliance with the provisions of Secretarial Standards (as applicable) issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

Disclosures

Your directors are pleased to furnish the following details which are required to be reported by the Company in the Director's Report pursuant to Section 134(3) (a) to (q) of the Act:

i. Annual Return

In terms of Section 92(3) and Section 134(3) (a) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for the financial year ended March 31, 2024 is available on the website of the Company and can be accessed through https://www.finolexpipes. com/investors/compliance-report/

ii. Directors' Responsibility Statement

Your directors, on the basis of information and documents made available to them, confirm that:

a) in the preparation of the annual financial statements for the year ended March

31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the year ended on that period; c) the directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets 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 directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

iii. Vigil Mechanism/Whistle Blower Policy

The Company has established a Vigil Mechanism and Whistle Blower Policy for directors and employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy. The Company affirms that no Director(s) or Employee(s) has been denied access to the Chairman of the Audit Committee and that no complaint was received during the year.

The said policy has been communicated to the Director(s) and Employee(s) of the Company and is also posted on the website of the Company https://www.finolexpipes.com/site/ assets/files/147243/whistle_blower_policy.pdf

iv. Policy relating to Prevention of Sexual Harassment

Pursuant to the requirements of the Sexual HarassmentofWomenatWorkplace(Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and rules made thereunder, the Company has formulated and adopted a Prevention of Sexual

Harassment Policy, to provide protection to employees at workplace and for prevention and redressal of sexual harassment complaints and incidental matters.

Your directors state that during the year under review, there were no complaints received / case filed pursuant to the POSH Act.

For further details, please refer to Corporate Governance Report, which forms a part of this Annual Report.

v. Particulars of loans, guarantees or investments

The details, of loans given, investments made or guarantees given (as applicable and if any) pursuant to Section 186 of the Companies Act, 2013, are disclosed in the notes to the financial statements.

vi. Significant/Material Orders passed by the

Regulators/Courts/Tribunals

There are no significant and/or material orders passed by any Regulators/Courts/ Tribunals impacting the going concern status of the Company and the Company's operations in future.

Further no application, neither against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), nor the Company has done any onetime settlement with any Bank or Financial institutions.

vii. Employee Stock Option Scheme

During the year under review, your directors confirm that no shares were issued by the Company under the Finolex Industries Limited – Employee Stock Option Scheme/ Plan (ESOP) of the Company.

A statement giving complete details, as at March 31, 2024, pursuant to Regulation 14 of the Securities Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, is available on the Company's website and can be accessed through https:// www.finolexpipes.com/investors/compliance-report/

The Company has obtained certificate from M/s. SVD & Associates, Secretarial Auditors of the Company, pursuant to Regulation 13 of the Securities Exchange Board of India (Share

Based Employee Benefits and Sweat Equity) Regulations, 2021.

viii. Sweat equity shares and equity shares with differential voting rights

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

ix. Conservation of Energy, technology Absorption, Foreign Exchange Earnings and Outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given under Section 134(3) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure – 3, and forms integral part of this Annual Report.

x. Business Responsibility and Sustainability Report:

Business Responsibility and Sustainability Report, detailing the various initiatives taken by the Company on the environmental, social and governance front is annexed as Annexure – 4 and forms an integral part of this Annual Report

xi. Corporate Social Responsibility:

In accordance with the requirements of Section 135 of the Act and Rules framed thereunder, the Company has formulated a CSR Policy which is available on the Company's website and can be accessed through https://www.finolexpipes. com/site/assets/files/148640/corporate_social_ responsibility_-_policy.pdf

As a responsible corporate citizen, your Company conducts CSR activities in education, healthcare, sanitation, skill developments, social welfare, water conservation and women empowerment with its CSR partner, Mukul Madhav Foundation ("MMF"). Your Company has been actively contributing to the social and economic development of the underprivileged mainly in and around the Company's plants situated at Ratnagiri, Urse and Badhalawadi in the state of Maharashtra and at Masar in the state of Gujarat.

The Annual Report on the CSR activities along with summary of the Impact Assessment Report is annexed as Annexure – 5 and forms an integral part of the Annual Report.

Acknowledgements

Your directors take this opportunity to place on record their deep sense of gratitude to the banks, financial institutions, central and state government departments and local authorities for their guidance and support. Your directors are also grateful to the customers, suppliers and business associates of the Company for their continued co-operation and support.Yourdirectorsexpresstheirdeepappreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your directors are grateful for the confidence and faith shown in them by the shareholders of the Company.

For and on behalf of the Board of Directors
	Prakash P. Chhabria
Date: August 19, 2024	Executive Chairman
Place: Nice, France	DIN: 00016017