Finolex Cables Ltd Directors Report.

To the Members,

Your Board of Directors have pleasure in presenting the 52nd Annual Report and Audited Accounts of the Company for the Financial Year ended 31st March, 2020

Financial Results

The summarized financialresultsforthe under: year are as

(Rs. in Crores)

PARTICULARS 2019-20 2018-19 2019-20 2018-19
Revenue From Operations (Net) 2,877.3 3,077.8 2,877.3 3,077.8
Other Income 171.9 121.8 91.5 81.6
Total 3,049.2 3,199.6 2,968.8 3,159.4
Material Costs 2,083.4 2,264.9 2,083.4 2,264.9
Employee Benefit Expenses 149.5 140.7 149.5 140.7
Finance Costs 1.6 0.9 1.6 0.9
Depreciation, Amortization and impairment 38.9 40.6 38.9 40.6
Other Expenses 274.5 220.6 261.0 202.5
Total 2,547.9 2,667.7 2,534.4 2,649.6
Profit Before share of Net Profit of Investments 501.3 531.9 434.4 509.8
accounted for using equity method and tax
Share of Net Profits of an Associate and Joint - Ventures - 77.6 100.4
accounted for using equity Method
Profit Before Tax 501.3 531.9 512.0 610.2
Tax Expenses:
Current Tax 123.2 165.7 123.2 165.7
Deferred Tax (24.4) 22.1 (2.2) 37.1
Total Tax 98.8 187.8 121.0 202.8
Profit After Tax 402.5 344.1 391.0 407.4
Total Other Comprehensive Income / (Expenses) (40.6) (24.6) (41.4) (25.6)
for the year
Total Comprehensive Income for the year 361.9 319.5 349.6 381.9

Global economic Scenario

Global economic growth faced challenges, with de-growth experienced across major economies in 2019. The world economic output grew at 2.9% in 2019, significantly below the 3.6% clocked in 2018. The de-growth was witnessed with Advance Economies grew at 1.7% in 2019 as compared to 2.2% the year ago. Emerging Markets and Developing Economies (EMDEs) grew at 3.7% in 2019 as compared to

4.5% in the previous year. Manufacturing and trade faced increased challenges with escalating pressure between the

United States (US) and China and a hung Brexit struggling with a faltering European Union (EU). Asian, African and Latin American economies continued to remain under unprecedented pressure with many economies facing civil unrests over the faltering economic conditions. (Source: IMF

World Economic Outlook, April 2020)

The beginning of 2020 marked the global widespread of the novel COVID 19 virus, challenging the healthcare and the emergency response systems across the world. By March 2020, even developed nations failed to contain and respond to the virus followed by the World Health Organization (WHO) declaring the COVID 19 outbreak a global pandemic. This was followed by Nation-wide lockdowns across the world, with manufacturing and trade facing unprecedented shutdowns world-over. Even as the lockdowns keep extending and the global economy keeps slipping in a depression, IMF has estimated a global contraction of the world economy by a staggering 3% and the World Trade Organization (WTO) expects the world trade to contract globally in between 13% to 32% during 2020.

Going forward, as the lockdowns slowly open up, economies around the world have taken major steps towards revival, with major monetary and fiscal measures, bail-out and support packages, multi-lateral and cross-border co-operation initiatives etc. Although the short-term scenario remains hazy with the progression of the pandemic, global economies are expected to bounce back in 2021.

Indian Economic Scenario

The Indian Economy grew at a sluggish pace during 2019 mostly due to the global slowdown. Despite the overwhelming majority with which the new Central

Government was formed, the Indian Economy grew at 4.2% during 2019 as against 6.1% during 2018. (Source: IMF). This challenges significant faced by manufacturing and trade across the world. Within India, challenges were faced due to the widespread distress faced in the Banking and Non-Banking Finance Companies (NBFCs) sector, with MSMEs and the unorganized sector, relying heavily on such NBFCs, struggling with liquidity and working capital issues. Further, India experienced a late, but prolonged monsoon in 2019, with major parts of the country being affected by floods which in-turn affected agriculture cycle/output and created challenges for almost all industries. This reflected in the September and December quarterly performances of the Agricultural and Industrial sectors across the increase of the Renewable Energycountry. However, to boost the liquidity in the Economy, the Reserve Bank of India exercised repo rate cuts by a total of 135 basis points. The year 2019-20

Final also experienced a significant Consumption. The Union Budget 2020-21 made significant allocations to the infrastructure sector in addition to the Rs. 102 lakh crore National Infrastructure Pipeline budget

These measures along-with an amendment of the Insolvency and Bankruptcy Code (IBC) to ease pressure on the real estate sector, came in as growth boosters for the economy

India jumped to 63rd rank in the World Banks ease of doing business, thereby making it a further attractive Foreign Direct Investment (FDI) destination. The current tax regime also favors Foreign Direct Investment (FDI), since profit from new investments would attract tax at a lower rate of 15%.

The March quarter witnessed the outbreak and widespread of the COVID 19 pandemic in India. This impacted the performance of the March quarter, historically known to be the highest performing quarter of every fiscal for both

Industrial as well as the Agricultural sectors. The Government declared a nation-wide lockdown starting with March 24, 2020, which resulted in complete suspension of operations across the economy. With exceptions of a few essential products, the lockdown witnessed no manufacturing output, as the organized as well as the un-organized manufacturing sectors had to shut their operations. Service industry could adopt a work-from-home culture, albeit with its own struggles could only avert total shutdown. While majority of the Government machinery was diverted and deployed to contain the COVID 19 pandemic and save lives, India witnessed an exodus of migrant labor, moving back to their villages with unforeseen challenges.

Despite the adversities, the IMF expects India to be among the best performing economies in 2021, with only India and China expected to grow in the period. While the

Government continues to focus on containing the pandemic, it has also taken steps to contain the loss of livelihoods and the downturn in the economy. The Government declared a stimulus package of Rs. 20 lakh crore to support the industries, MSMEs and the poor sections of the economy. With the global sentiment favoring India to be a viable alternative to China for cost-effective manufacturing/ outsourcing, the Government declared the ‘Atmanirbhar

Bharat initiative, to make India a self-sufficient economy and an attractive investment destination. These steps, along-with the previously announced policy reforms such as Pradhan

Mantri Awas Yojana (PMAY) Housing for all by 2022, Bharat

Net, Digital India, Make in India, Minimum Selling Price for Agriculture, 100 Smart cities, 50 Economic corridors, 35 multimodal logistics park, allocations for the infrastructure, railways, roadways, shipping and aviation along-with significant are set to pave way for economic revival and growth in the medium and long term.

Performance of the Company

The year 2019-20 was challenging due to challenging macroeconomic factors, the struggling real-estate market, the liquidity issues and halting projects with telecom PSUs. This along-with challenges on the micro factors, such as dim consumer sentiment in the market, socio-political struggle with the Citizenship Amendment Act,2019 (CAA), stretched and heavy monsoons also contributed to the overall challenges. Despite all these adversities, your Company, on the back of its strong brand recognition, continued to show resilience and recorded a modest performance. The COVID 19 pandemic impacted the Companys business for the better half of the March quarter, which other-wise would have resulted in the Company recording an at-par or slightly better performance as compared to the previous year.

In wake of weak macros, right since the beginning of the year, the Company had further worked on its cost rationalization/ reduction methods which successfully bore fruit. In-line with the previous years theme and Company vision enhance, engage and expand, the Company expanded its total retail touchpoints from 30,000+ retailers to around 50,000+ retailers during the year as it continuously strives to reach the targeted milestone of 150,000+ retailers. Your Company has always stood as the most sought after brand in the wires and cables market. To enhance this perception further and engage its customers, the Company increased its advertisement expenditure outlay during the year and its presence was felt even more on different media platforms. The Company had begun work on the expansions at Urse but due to the onset of COVID, these projects have been delayed. The new conduit pipe manufacturing line at Goa should become operational soon commissioning is expected as soon as travel possibilities open up and the overseas technicians can travel to the site for this purpose.

The COVID 19 pandemic is an unprecedented catastrophe during our lifetimes and uncertainties in the short-term future are rife. However, your Company on the back of its strong net-worth and liquidity position, debt-free nature, cost rationalization abilities, decentralized operations, widespread dealer and retailers network, and a loyal core team of professionals and employees is confident of tackling tough times with flying colors. The Company during lockdown, with its core team and dealer-retailer network, worked on strategically planning the near future and prepared for life post lockdown. This contributed significantly as the lockdown is being unwound and the operations of the Company are getting back to normal.

Total Income

Revenue achieved during the current year was Rs. 2,877.3 Crores as against Rs. 3,077.8 Crores reduction in the previous year resulting in a 6.5% de-growth. The reduction was witnessed across major product segments, with Electrical

Cables registering 5.3% and Communication Cables registering 16.4% reduction. Consumer Products segment achieved a 24.2% year-on-year growth. Total Income for the year stood at Rs. 3,049.2 Crores as against Rs. 3,199.6 Crores in the previous year.

Profit Before Tax was recorded at Rs. 501.3 Crores as against Rs. 531.9 Crores during the previous, resulting in a decrease of 5.8%. Although the Company clocked sales volumes at par with the previous year, fall in commodity (raw material) prices and subsequent adjustment of selling prices led to the overall decrease in the total sales and profit before tax.

Profit After Tax was recorded at Rs. 402.5 Crores as against Rs. 344.1 Crores in the previous year. In September 2019, the Government of India promulgated the Taxation Laws (Amendment) Ordinance 2019, announcing major slashes to the corporate tax rates in the Income Tax Act, 1961. The existing Companies were provided an option to pay tax at a concessional rate of 22% (plus Surcharge/Cess), with consequential surrender of specified deductions/incentives.

The Company opted for the new scheme, which resulted in the reduction of total tax outgo and an increased Profit After Tax.

The Management Discussion and Analysis (MDA), forming part of this Report in Annexure A - I, inter-alia, deals adequately with the operations as well as the current and future outlook of the Company.

The SEBI LODR COVID 19 report, forming part of this Report in Annexure A II, inter-alia, deals with the impact of COVID

19 on the operations of the Company and the short-term future outlook.


The sluggish demand in the global economic activity continued to reflecton the Companys exports which stood at a modest Rs. 25.7 Crores as against Rs. 30.4 Crores during the previous year.


The short term debt programs of your Company continue to be rated by CRISIL. Since the last few years, these have been accorded the highest ratings that CRISIL issues (A1+). CRISIL has also retained the AA+/stable rating for the Companys long term debt offerings. During the year, no debt papers were issued. As on the date of this report, your Company continues to remain debt free.

Financial costs have been contained to the minimum required levels. The Company continues to meet all its financial commitments in a timely manner.


Based on the Companys performance, the Directors are pleased to recommend a Dividend of Rs. 5.5 per equity share i.e. 275 % of the face value of Rs. 2 each, for approval of the members at the ensuing Annual General Meeting. The total dividend outgo would involve a cash outflow of Rs.

As required by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, the Company has formulated and adopted a dividend distribution policy which is available on the Companys website www.

Transfer to Reserves

The Company has not transferred any amount to the reserves during the current financial year.

Fixed Deposits

During the year under review, the Company has not accepted any deposit covered under Chapter V of the Companies Act, 2013

Change in Nature of Business

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

New Products and Expansion

Finolex House

In the previous year, your Company launched the firstof its exclusive retail store chains, ‘Finolex House and opened four Finolex House Stores at Chennai, Vadodara, Bhopal and

Ghaziabad. During the current year, the Company opened four more Finolex House Stores at Secunderabad, Jamshedpur,

Bengaluru and Raipur. Your Company plans to open 50 such

‘Finolex House stores across the country very soon.

The Company also increased its footprint in the Fast Moving Electrical Goods (FMEG) market during the current year, led by the fans and water heaters along-with the low-duty switch gears and lamps. Owing to the nature of this market, where newness and design elements play a key role, the Company offered newer products along-with its existing portfolio. The current Socio-Political scenario and ‘Atmanirbhar Bharat initiative and sentiment is expected to bear fruit and the Company expects higher volumes of revenues from these products.


The Capex plans announced earlier of upto Rs. 200 Cr will be completed over the next 12 to 15 months, subject to more activities opening up post lockdown easing.

Joint Ventures, Subsidiaries and Associates

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014, the statement containing salient features of the financial statements of the Companys Joint Ventures / Associates (in form AOC-1) is attached to this Report as Annexure G. The

Company does not have any investments in subsidiaries.

Corning Finolex Optical Fiber Private Limited

While, the Governments vision to connect the whole of India with The Bharat Net and Digital India initiative should have seen further progress during the year, multiple events came in the way of realizing that goal a) substantial financial strain on the PSU telecom companies such as BSNL and MTNL, b) ruling on AGR impacting private sector telecom units such as Idea/Vodafone, Bharti etc all meant that the entire sector witnessed meager investment in asset creation. Additionally, fiber prices were in a free fall globally following reduced demand in China. Overall demand scenario was quite sluggish with very little traction. Revenue achieved by the JV during FY 2019-20 was Rs. 150.0 Crores as against Rs. 327.6 Crores in the previous year. With prices being extremely low, the JV recorded a break-even year as against a net profit after taxes Rs. 14.2 Crores during the previous period.

The COVID 19 pandemic and the resultant nationwide lockdown, pushed the entire Indian population of approximately 130 Crore people, indoors. This resulted in increased demand and consumption of Internet/Data and the importance of broadband connectivity was realized in an unparalleled fashion. The closure also demonstrated the need and accuracy of the Governments vision for pan-India connectivity and the Company expects a rise in demand of

Optical Fiber in the future.

Your Companys total equity participation in the JV at the end of 2019-20 stood unchanged at Rs. 1.75 Crores.

Finolex J-Power Systems Private Limited

As discussed in the Indian Economic Scenario section, the

Governments vision for sustained and stable growth of the Indian economy includes a progressive outlook towards infrastructural development. Such smart cities, economic corridors, logistics parks, housing schemes, ports, metros etc. would require immense power supply and transmission of power to such places. The power sector plays a pivotal role in the development of infrastructure and the Government has shown keen interest and consequent demand for

High Voltage (HV) and Extra High Voltage (EHV) power transmission lines. This has been evident from the increasing number of tenders floated by many states and state utilities during the year.

The year under review had been somewhat positive for the JV in terms of market penetration, reach and visibility in relationship building with customer base and the same was visible in the JVs ability to participate in tenders across various states. During the year, the JV successfully completed its first 220KV order from Delhi Transco, its earlier order from KSEB and successfully won major orders in the 110KV 230KV voltage grade as well as orders for the Pune Metro project.

The JV also successfully participated in 400KV tenders during the year, which was certified during the previous year. Although the JV faced challenges in participating for large tenders owing to the supplying, laying and commissioning experience criteria for such tenders, the JV had been successful in convincing utilities to accept parent credentials towards qualifications. factor to the success it achieved, it hasThiswasevident withthe successful participation in tenders.

Based on its performance and outreach, it can be safely said that the JV will be able to break even as well as become profitable going forward; however, would need financial support through Equity infusion until then. Considering this, your Company had infused Equity worth Rs. 43.4 Crores in the JV during the year, taking the Companys total participation in the JV to Rs. 196.0 Crores at the end of FY 2019-20. The JVs long term potential and outlook indeed seem strong, but in the short term, it has been facing net-worth erosion and therefore your Company has recognized a diminution in the value of its investment of Rs. 35.1 Crores during the year under review. This scenario is likely to prevail for at least 18 months more.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure F to this Report.

InformationasrequiredundertheprovisionsoftheCompanies Act, 2013 (the "Act") read with Rule 5 sub rules (2 and 3) of Companies (Appointment and Remuneration of Managerial Rules, 2014 (the "Rules") forms part of this Report. However, as per the provisions of Section 136(1) of the Act, the Report and Accounts are being sent to the members, excluding the statement of particulars of employees under the Rules of the Act. Any shareholder desirous of obtaining a copy of the said statement may write to the Company Secretary & President

(Legal) at the Registered office of the Company.

Key Managerial Personnel

The following persons are Key Managerial Personnel during the year 2019-20

name Title
Mr. D K Chhabria Executive Chairman
Mr. Yatin Y Redkar Executive Director - Operations
Mr. Mahesh Viswanathan Chief Financial Officer
Mr. R G DSilva Company Secretary &
President (Legal)

Human Resources

Tough times bring people closer. But tougher times also test ones ability to stay close over a long period. Now, with the world facing the COVID 19 pandemic, is such a time and your

Company stands and commits to stay close to its employees. While your Company has always regarded its employees significant been committed to develop and strengthen its employees with the best employment practices, work environment, ability to learn and grow and also prepare them to swiftly adapt to the ever-changing business environment. With the

COVID 19 pandemic, the Company now demonstrates utmost care towards its employees by implementing strict procedures and processes at the work-places Offices, Plants,

Branches or Depots. As part of its comprehensive approach to tackle the pandemic, the Company has implemented a four-pronged COVID 19 strategy viz.,

Screening and Monitoring Prevention and Awareness Disinfection and Sanitization Social Distancing

A COVID Response Team, actively on a daily basis, monitors the employees and situation and have been provided a manual to initiate appropriate actions.

The Company has also implemented in place, processes with benchmarked business practices and the Company finds immense pride to state that none of its employees were laid-off during the COVID 19 pandemic as at the date of this report.

The Company engaged approximately 1762 and 1824 permanent employees as at 31st March, 2020 and 2019, respectively. The number of flexible (contractual, trainee and temporary) employees as at 31st March, 2020 was 1256.

Corporate Governance

At the Company, we ensure that we evolve and follow the corporate governance guidelines and best practices sincerely, to boost long-term shareholder value and to respect minority rights. The Company considers it an inherent responsibility to disclose timely and accurate information regarding its operations and performance, as well as the leadership and governance of the Company. Your Company is in full compliance with the Corporate Governance guidelines as set out in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations") and is committed to good corporate governance laying a strong emphasis on transparency, accountability and integrity.

Accordingly, all Directors and Senior Management employees confirm in writing their adherence to the Companys Code


A separate report on Corporate Governance (Annexure B) Secretarial isprovided together with a Certificate

Auditors of the Company regarding compliance with conditions of Corporate Governance as Annexure C, as mandated under SEBI LODR Regulations, 2015. There are no significant/material qualifications, reservations or adverse remarks or disclaimers made by the auditor in his report. A

Financial Certificate

Officer of the Company in terms of Regulation 17(8), Schedule II of SEBI LODR Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is also annexed.

Corporate Social Responsibility

Your Company envisages its vision through its tagline ‘Finolex Behtar ElectriKAL ke liye. This vision not only encompasses the one-step-ahead quality of its products and customer satisfaction, but also a holistic approach about the well-being of the Company, its employees, its customers and the complete society. Your Company commits itself to utmost care and help for sections of the society in need of such a hand and this is visible through the CSR initiatives undertaken by the Company.

During 2019-20, your Company undertook the following CSR activities:

Free Medical care through Multi-speciality Hospitals Mobile hospital facilities in rural areas along-with improvement of health care facilities in such areas Facilities for knee replacement, cataract and dialysis for needy people along-with medical help for needy children suffering from H1B diabetes

Promotion of education, youth welfare and related activities along-with expenditure on improvement of school infrastructure in Maharashtra, Uttarakhand and


Sewage treatment plants where the Companys plants are located

For their invaluable service to the society, Police Vans were provided to the ‘Maharashtra Police as per desired specifications

Contribution made to PM CARES Fund for helping the Government deal with the current pandemic Food and provisions provided to remote villagers in times of COVID

Contribution to an orphanage to care for the underprivileged children

Annexure ‘I Annual Report on CSR, forming part of this

Report, inter-alia, provides the details of all CSR activities during the year under review and other related information.


In accordance with the provisions of the Companies Act 2013 and the relevant Rules framed thereunder and of the Articles of Association of the Company, Mr. Shishir Lall

(DIN: 00078316), Non-Executive Director of the Company Bretires by rotation at the ensuing Annual General Meeting and, being eligible offers himself for re-appointment. The

Board recommends his re-appointment. The requisite details regarding his re-appointment are set out in the Notice for the ensuing Annual General meeting.

Mr Pradeep R Rathi (DIN: 00018577), Independent Director completed his five (5) years term of appointment on 8th

September 2019. The Board places on record its deep appreciation of the valuable contribution made by Mr. P. R. Rathi during his tenure on the Board of the Company.

*Mr. P G Pawar, Mr. Mahesh Viswanathan, Mr. M.L Jain and Mrs. Shruti Udeshi, Directors had offered reappointment at the last AGM held on 18th September 2019.All the resolutions proposed at that AGM were passed by requisite majority. However, two major corporate shareholders namely: Orbit Electricals Private Limited holding 30.7% and Finolex Industries Limited holding

14.5% aggregating to 45.2% of the paid up share capital of the Company voted against each of the resolutions for their respective re-appointments. Both the aforesaid major corporate shareholders are under the management control of Mr. Prakash Chhabria one of the promoters of the Company who is currently in dispute with Mr. D K Chhabria, another promoter who is in management control of the Company which explains the reasons for such negative votes being cast by those companies. A contention has been raised that these votes were cast contrary to the mandate under their constitutional documents/ contractual commitments, and these are the subject matter of challenge before the Court(s) and the matter is thus sub judice.

At its meeting held on 18th September, 2019, on the recommendation of the Nomination and Remuneration Committee ("NRC") in this regard the Board appointed

Mr. D. K. Vasal and Mr. J. R. S. Reddy as Independent Directors and Mr Yatin Y Redkar as an Executive Director- Operations of the Company w.e.f 19th September 2019. These Directors hold officeas such till date of the ensuing Annual General

Meeting of the Company. The Board recommends their re-appointment. The requisite details regarding their reappointment are set out in the Notice for the ensuing Annual General Meeting.

At its meeting held on 18th September, 2019, on the recommendation of the Nomination and Remuneration Committee ("NRC") in this regard the Board had also appointed Mr. J. R. Samuel as an additional Non-Executive

Non Independent Director w.e.f 19th September 2019. He has ceased upon resignation w.e.f 14th August 2020. The Board places on record its deep appreciation for the valuable contribution and active participation of Mr. J R Samuel at

Board and Committee meetings during his tenure on the Board.

Pursuant to the recommendation of the Nomination and Remuneration Committee ("NRC") in this regard, the Board at its meeting held on 14th February 2020 appointed Mrs.

Kavita Upadhyay as an Independent Woman Director on the Board with immediate effect. Her appointment is required to be confirmed by the shareholders at the ensuing Annual General Meeting; details regarding the same are set out in the Notice for the ensuing Annual General Meeting.

Compliance Under the Companies Act, 2013

Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules of 2014, your Company complied with the requirements. The details of such compliances are enumerated below:

Web link to the Annual Return: The Annual Returns of the Company are available at the Companys website at

Number of meetings of the Board: The Board met on 5 occasions during the year. The details of the meetings are furnished in the Report on Corporate Governance which is attached as Annexure B to this Report.

Directors Responsibility Statement: Pursuant to Sections 134(3)(c) and134(5) of the Companies Act, 2013, (the "Act"), the Directors, to the best of their knowledge and belief and according to the information and explanations provided to them, confirm that:

- in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same - 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 at the end of the financial year and of the profit and loss of the Company for that period - the Directors sufficient have taken proper and care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities - the Directors have prepared the annual accounts on a going concern basis; - 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

- 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.

Remuneration and Nomination Policy: The Board of Directors has framed the policy which lays down a framework in relation to Appointment and

Remuneration of Directors, Key Managerial Personnel and Senior Executives of the Company including the criteria for determining qualifications, selection and appointment. Further details are provided in the Corporate Governance Report which is attached as

Annexure B to this Report.

Board Evaluation: Due to COVID 19 pandemic the

Independent Director meeting, though scheduled for

30th March 2020, could not be held within the financial year 2019-20. Pursuant to general circular no 11/2020 dated 24th March 2020 issued by Ministry of Corporate

Affairs the holding of such meeting for financial year 2019-20 is exempted due to the unprecedented situation created by the Covid-19 Pandemic. However, the independent directors at their meeting dated 27th June

2020, without the participation of the non-independent directors and Management, considered and evaluated the performance of the Board, performance of the Chairman and other non-independent directors. The evaluation was performed taking into consideration the various aspects of the Boards functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Board of Directors expressed its satisfaction with the evaluation process.

Particulars of loans, guarantees or investments under section 186 of The Companies Act, 2013: During the year, an equity investment of Rs. 43.4 Crores was made in the Companys JV - M/s Finolex J-Power Systems

Private Limited.

Contracts or arrangements with related parties: All transactions entered into by the Company with related parties were in the ordinary course of business and on an arms length basis. Each of these transactions was reviewed by the Audit Committee prior to being entered into and where necessary, was approved by the Board of Directors and the Members. In respect of transactions of a repetitive nature, an omnibus approval was obtained from the Audit Committee and Members where necessary. At every quarterly meeting, the Audit Committee reviews the transactions that were entered into during the immediately preceding period. Details of related party transactions have been disclosed under

Note 35 to the financial statements. Details of the same are also reproduced in Form AOC 2 which is attached as Annexure H to this Report. The Companys Policy on transactions with related parties as approved by the Board is also available on the website of the Company at

Material changes and commitments affecting financial position of the Company which have occurred between 31st March, 2020 and 14th August, 2020: There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (31st March, 2020) and date of this Report (14th August, 2020)

THE SIGNIFICANT REGULATORS OR COURT OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE Company: There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company or the Companys operations in the future.

Adequacy of Internal Financial Controls with reference to the Financial Statements: Having regard to Rule

8 (5) (viii) of the Companies (Accounts) Rules, 2014, the details in respect of adequacy of internal financial controls with reference to the financial statements of the Company are as follows:

Your Company maintains appropriate systems of internal control including monitoring procedures. These internal control systems ensure reliable and accurate financial reporting, safeguarding of assets, keeping constant check on cost structure and adhering to management policies. The internal controls are commensurate with the size, scale and complexity of the Companys operations and facilitate timely detection of any irregularities and early remedial steps against factors such as loss from unauthorized use and disposition. Company policies, guidelines and procedures provide for adequate checks and balances which are meant to ensure that all transactions are authorized, recorded and reported correctly. The internal controls are continuously assessed and improved / modified to meet changes in business conditions, statutory and accounting requirements

Constant monitoring of the effectiveness of controls is ensured by periodical audits performed by an in-house internal audit team as well as assignments entrusted to M/S Ernst & Young. Both these teams in their respective assignments, test and review controls, challenge business processes for their robustness and benchmark practices in line with industry norms.

The Audit Committee regularly meets and reviews the results of the various internal control audits both with the Auditors as well as with the respective Auditees.

The Audit Committee is apprised of the findings as well as the corrective actions that are taken. Periodical meetings between the Audit Committee and the Company Management also ensure the necessary checks and balances that may need to be built into the control system.

Risk Management Policy: Your Company has set up a Risk Management Committee of the Board of Directors which comprises Mr. Shishir Lall, Mr. D. K. Chhabria, Mr. Mahesh Viswanathan and Mr. J. R. S. Reddy. More details of the risks faced by the Company are available in the Management Discussion and Analysis (MDA), attached as Annexure ‘A to this Report.

Vigil Mechanism / Whistle Blower Policy: As required under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Boards and its Powers) 2014 and Regulation 22 of the SEBI LODR Regulations, the Company has adopted a policy on vigil mechanism / whistle blower. The policy provides direct access to the Chairman of the Audit Committee in case any employee should choose to report or bring up a complaint. Your Company affirms that no one has been denied access to the Chairman of the Audit Committee and also that no complaints were received during the year. Brief details about the policy are provided in the Corporate Governance Report which is attached as

Annexure B to this Report. Also, the policy is available at the Companys website at

Prevention of Sexual Harassment Policy: The Company has in place a policy on prevention of sexual harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, no complaints were received.


M/s Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No.117366W / W100018), Auditors of the

Company, hold office until conclusion of the Fifty-Fourth

Annual General Meeting of the Company to be held in the financial year 2022-23, provided that they continue to remain eligible to continue as Auditors of the Company. As required under the provisions of Section 139 and Section 141 of the Companies Act, 2013 read with the Companies (Accounts)

Rules 2014, the said Auditors have confirmed their eligibility to continue to act as Auditor of the Company.

The Audit Committee and the Board of Directors have noted the aforesaid.

Cost Audit

As per the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) rules of 2014 as amended from time to time, your Company has been carrying out an audit of cost records every year. At the previous Annual General Meeting, the members had approved the appointment of M/S Joshi Apte & Associates as Cost Auditors, for the financial year 2019-20, at a remuneration of Rs. 5.5 lacs plus GST, as applicable, and reimbursement of out of pocket expenses. Their work will commence shortly and their report would be filed with MCA on or before the due date.

The Cost Audit Report for the financial year 2018-19 was filed within the permissible time for the same.

Secretarial Audit

In accordance with the provisions of Section 204 of the Companies Act, 2013, and the Rules made thereunder,

M/s Jog Limaye & Associates, a firm of Company Secretaries in practice, was appointed by the Board to conduct the Secretarial Audit of the Company.

Their Report dated 14th August, 2020 is attached as Annexure

D to this report.

The Secretarial Auditors in their report have made three obervations which emanate as a result of the situation as clarified under Item no. 2.1 of the report on Corporate Governance

(Annexure B) to this report. Following are the observations in brief and the Companys reply for each of them.

Obervations 1 and 3: Non Compliance of Sec 149 of the Companies Act, 2013 regarding Appointment of Woman Director and Non-Compliance of Regulation 17 of SEBI (LODR), 2015 regarding appointment of Woman Director.

Companys Response: "During the year under review Companyhascompliedwithregulation17ofSEBI(LODR),2015, However, position of Mrs. Shruti Udeshi as an Independent

Women Director became sub judice only because two major corporate shareholders holding in aggregate 45.2% of the Paid up Share Capital of the Company voted against the resolution which was proposed in Annual General Meeting held on 18th September 2019. Both of the aforesaid major corporate shareholders are under the management control of one of the promoters of the Company who is currently in dispute with the person who is in management control of the Company which explains the reason for such negative votes being cast by them. A contention has been raised that these votes were cast contrary to the mandate under their constitutional documents/ contractual commitments and these are the subject matter of challenge before the Court(s)/

NCLT and thus, after 18th September 2019 her position as an

Independent Women Director is sub judice. In view of the sub judice position continuing due to Orders from the respective authorities/courts/legal forums not being received quickly the Company immediately, as an abundant precaution has appointed Mr. Kavita Upadhyay, as an Independent Women Director on its Board with effect from the meeting of the

Board held on 14th February 2020."

Observation 2: Non-filing of certain forms with ROC, Pune.

Companys Response: The forms left to be filed were related to the following sub-judice matter which has been included as a note under the Directors section of this report.

"Mr. P G Pawar, Independent Director, Mr. Mahesh

Viswanathan, Deputy Managing Director, Mr. M.L Jain, Non- Executive Director and Mrs. Shruti Udeshi, Independent Director had offered themselves for reappointment at the last AGM held on 18th September 2019. However, two major corporate shareholders holding in aggregate 45.2% of the paid up share capital of the Company voted against each of the resolutions for their respective re-appointments. A contention has been raised that these votes were cast contrary to the mandate under their constitutional documents/ contractual commitments, and these are the subject matter of challenge before the Court(s)/ NCLT and the matter is thus sub judice."

Secretarial Standards

The Institute of Company Secretaries of India had revised the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings

(SS-2) with effect from 1st October, 2017. Your Company is in compliance with the said secretarial standards.

Listing of Securities

Your Companys equity shares are listed on the two premier stock exchanges of the country namely BSE Limited and NSE of India Limited. Your Company had issued Global Depository

Receipts which are listed on the Luxembourg Stock Exchange. Your Company has not issued any Non-Convertible Debentures ("NCDs") in financial year 2019-20 and no NCDs were outstanding as on 31st March 2020.

Energy, Technology and Foreign Exchange

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,

2014 is attached to this Report as Annexure E.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after the completion of seven years. Further, according to the

IEPF Rules, the shares on which dividend which are not subject to any legal requirements has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

During the year, the Company has transferred 3,07,205 shares on which dividends were unclaimed for seven consecutive years as per the requirements of the IEPF Rules. The members who have a claim on above dividends and shares may claim the same from IEPF Authority by submitting an online application in web Form No. IEPF-5 available on the website and sending a physical copy of the same, duly signed to the Company, along with requisite documents enumerated in the Form No. IEPF-5. No claims shall lie against the Company in respect of the dividend / shares so transferred.

Cautionary Statement

Statements in this Boards Report and Annexures may contain forward looking statements within the meaning of applicable

Securities laws and regulations. Actual results could differ materially from those expressed or implied. Various factors including commodity prices, cyclical demand, changes in Government regulations, tax laws, general economic development could all have a bearing on the Companys operations and would impact eventual results.


Your Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial institutions for their continued support and cooperation. Your Directors warmly acknowledge the trust and confidence reposed in your Company by its channel partners, dealers, customers and construction organizations in supporting its business activities and growth. Your Directors express their gratitude to the other business associates for their unstinting support. Your Directors value the commitment and contribution of the employees towards the Company. Last but not the least, your Directors are thankful to the Members for extending their constant trust and for the confidence shown in the Company.

For and on behalf of the Board of Directors
Place: Pune d. K. Chhabria
Date: August 14, 2020 Executive Chairman