INTRODUCTION

PLUMBING INDUSTRY

The plumbing sector is a growing one. According to the Global Construction 2020 Report

prepared by Global Construction Perspectives & Oxford Economics and sponsored by

PWC, US $ 97.7 trillion would be spent on construction globally in the next ten years. The

report further says that current spending of $ 7.2 trillion per year would grow by 67% to 12

trillion per year by 2020, with half the amount being spent by three countries China, India

& USA.

Real estate is one of the fastest growing sectors of the Indian economy and contributes about

5 per cent to India's gross domestic product (GDP). Foreign direct investment (FDI) up to

100 per cent is allowed with government permission for developing townships and

settlements and in the hotel and tourism sector through the automatic route. The Government

of India (GOI) has raised the housing loan limit to US$ 52,080 for priority sector lending and

US$ 833 million has been allocated for rural housing fund (RHF) in FY13 budget. The real

estate sector is playing a significant role in the rising demand for plumbing products.

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Plumbing industry of India

DEMAND DRIVERS IN INDIA

Indias GDP will have multiplied five times by 2030.

By 2030, 590 million people will live in cities in India, nearly twice the population of

US, today.

Net increase in working-age population by 2030 will be of 270 million people.

Indian cities will generate 70 percent new employment.

From 22 million households in 2010, there will be 91 million urban households in

2030.

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 From 42 cities today (Europe has 35!) India will have 68 cities with a population of one

million plus.

India will need capital investment approx. $ 1.2 trillion to meet projected demand in

Indian cities.

Anything between 700 and 900 million sq m of commercial and residential space (This

figure is almost equivalent to entire Chicago!) will be required to be built, every year.

India will need to pave roads approx. 2.5 billion sq m by 2030, 20 times higher than

that added in past decade.

7400 km of metros and sub-ways will be required, 20 times the capacity added in the

past decade

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Finolex Industries Limited is Indias leading manufacturer of PVC-U Pipes and Fittings and

the second largest manufacturer of PVC Resin. The Company operates through polyvinyl

chloride (PVC), Pipes & fittings and Power segments. The Company offers its products in

categories, including Agricultural Pipes and Fittings, and Plumbing and Sanitation Pipes and

Fittings. Its products include Underground Sewerage Pipes, Female Threaded Adaptor,

Service Saddle, Fabricated Repair Coupler and Screen Pipes with Ribs. It offers chlorinated

polyvinyl chloride (CPVC) pipes and fittings, such as CPVC Pipes, Compact Ball Valve,

Coupler, Cross Tee, Transition Bush, Reducing Elbow, Tank Nipple, Step Over Bend, Male

Threaded Adaptor and others. Its PVC pipes and fittings are available in various sizes,

pressure classes and diameters, and are used in agriculture, housing, telecommunications,

construction and industries. The Companyhas state-of-the-art manufacturing plants in Pune

that serves as company headquarter,Ratnagiri in Maharashtra and Masar in Gujarat. The

Company also carries out distribution from warehouses in Chinchwad, Cuttack, Delhi, and

Indore.

FIL is the first Indian PVC-U Pipes manufacturer to get the coveted IS/ISO 9001:2008

certification. The Company is continuously increasing their product offering and production

capacity that will enable them to achieve their goal of becoming a 1 Billion USD company in

the near future.

PVC-U Pipes Division:

Our manufacturing plants in Pune, Ratnagiri, and Masar house all the modern day equipment

that help us to churn out an impressive 250,000 m.t.p.a.

Finolex PVC Pipes and Fittings are available in numerous sizes, pressure classes and

diameters making them fit for diversified applications in both agricultural as well as non-

agricultural sectors including housing, industrial and construction.

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We have been providing superior quality PVC-U and CPVC Pipes and Fittings all across the

country through our 15,000 direct and indirect retail outlets.

PVC Resin Division:

PVC is the main ingredient for pipes. We have set up a resin manufacturing plant in Ratnagiri

spreading across an area of over 650 acres. The plant has been set in technical collaboration

with Uhde GmbH, Germany with Hoechst technology. This plant manufactures both

suspension and emulsion PVC and has an annual output of 272,000 m.t.p.a.

PVC finds applications in various areas, such as manufacturing of pipes, insulation of cables,

window profiles, flooring, blister packaging, etc. Being versatile in nature, PVC continuously

finds newer applications each day.

As a part of its PVC Complex, FIL has also set up an open sea cryogenic jetty, the first of its

kind in the Indian private sector.

HISTORY OF THE COMPANY

1981- The company was incorporated on 28th March, in Maharashtra as a private limited company

and was converted into a public limited company

On 1st December, 1988. It manufactures PVC Pipes and fittings. It was promoted by P.P. Chhabria

and his associates. The company acquired a manufacturing plant at MIDC Chinchwad, Pune and

started commercial production of PVC pipes in May 1981.

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1983- 3,67,650 shares issued without payment in cash to members of FinolexPlastics Pvt. Ltd. on its

merger.

1987- Letter of Intent was obtained for the manufacture of 1,00,000tonnes per annum of PVC resin.

- The Company entered into a technical collaboration agreement with Uhde GmbH, West Germany

for licensing and technical know-how of Hoechst AGs process for manufacture of PVC resins and for

provision of basic engineering.

- 8,42,919 Rights shares issued at par in prop. 1.5:1.

1989- With the public issue of equity shares in May, the Company offered 3,50,000-14% secured

redeemable partly convertible debentures of Rs 300 each of which 17,500 debentures were offered on

preferential basis to employees (including Indian working directors)/workers on an Equitable basis

(only 3,070 debentures taken up). 3,32,500 debentures together with the unsubscribed 14,430

debentures of the employees' quota were offered and allotted to the Indian Public. Additional 52,500

debentures were allotted to retain oversubscription.

- Conversion of debentures was to take place at two stages viz., (a)Aportion of Rs 50 of the face

value of each debenture into 5 No. of equity shares at par (Part `A') at the end of 6 months from the

date of allotment of the debentures and (b) a portion of Rs 100 of the face value of each debenture

into 10 No. of equity shares of Rs 10 each at par at the end of the second year from the date of

allotment of the debentures. The non-convertible part of Rs 150 of each debenture would be

redeemed at par on the expiry of 9th year from the date of allotment of debentures.

- 17,50,000 shares issued at par out of which 87,500 shares reserved for preferential allotment to

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employees, etc. but only 37,600 sharestaken up. The balance 16,62,500 shares, along with 49,900

shares not taken up by employees, were offered to the public in May 1990. Additional 2,62,500

shares allotted to public to retain oversubscription. 55,11,093 bonus shares allotted in prop. 3.907:1

to shareholders prior to the public issue.

- Company has effected an arrangement with LIC of India under group gratuity-cum-life assurance

scheme so as to cover future payment of gratuity to retiring employees.

1990- During September-October, the Company offered 27,36,667-14% secured redeemable

convertible debentures of Rs 150 each of which the following debentures were reserved for allotment

on a preferential basis: (i) 10,73,333 debentures to holders of 14% debentures issued in 1989; (ii)

10,40,000 debentures to shareholders of Finolex Cables, Ltd.; (iii) 6,66,667 debentures to NRIs on

repatriation basis; (iv) 6,50,000 debentures to Financial Institutions/Mutual Funds and (v) 5,33,333

debentures to employees of the Company.

- The unsubscribed portion of 10,35,799 debentures of the preferential quota was offered along with

the public issue of 39,66,667 debentures. Additional 11,89,500 debentures were offered to retain over

subscription. These debentures were allotted as follows: 90,68,934on 30.11.90, 46,600 on 11.1.1991

and 3,966 on 23.2.1991.

- Rs 60 of the face value of each debenture was compulsorily and automatically converted into 4

Equity shares of Rs 10 each at a premium of Rs 5 per share at the end of 18 months from the date of

allotment of debentures.

- The remaining Rs 90 of the face value of each debenture was to be redeemed at par on the expiry of

9 years from the date of allotment of debentures.

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- Simultaneous to the rights issue in September, the Company offered 82,00,000-14% secured

redeemable non-convertible debentures of Rs 100 each on rights basis to the existing equity

shareholders in the ratio of 75 non-convertible debentures for every 100 shares held. Only 46,661

debentures were taken up. Out of the balance 81,53,339debentures, 78,39,095 debentures devolved

on the underwriters. Allotment of 3,14,244 non-convertible debentures were kept in abeyance

pursuant to Court orders.

- As per the terms of issue, each debenture of Rs 100 will be redeemed in three equal instalments at a

premium of 5% at the end of 6th, 7thand 8th year from the date of allotment.

1991- 40,25,000 shares allotted at par on 2nd conversion of 14% convertible debentures.

- To part finance its PVC Resin Project (the project). The company had made , during the year under

review, right issue and public issue of 14% Secured Redeemable Convertible Debentures of Rs. 150/-

eachand14% Secured Redeemable Non-convertible Debenture of Rs.100/- eachvideLetter of Offer

dated 8th September, 1990 and Prospectus dated 10thAugust, 1990.

- The public and rights issues of Convertible Debentures were over-subscribed and the Company

retained over-subscription to the extent of 15% of the issue size as permitted by the Controller of

Capital Issues (CCI). The allotment of 1,21,61,917 Convertible Debentures was finalised in

consultation with Pune Stock Exchange Limited.

- The Company allotted 78,85,756 Non-Convertible Debentures.

- The Company signed during the year under review loan agreements with the Industrial Credit &

Investment Corporation of Inida Limited being Lead Financial Institution for DM 29.553 million and

for Rs 859 lakh (equivalent to DM 9.990) for the Project.

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- The Company has signed Bridge Loan Agreement with industrial Development Bank of India for

Rs 475 lakh which is due for repayment shortly.

- Rs. 100/- of the face value of the each of 14% Secured Redeemable Convertible Debentures (1989

series) have been converted into 10 Equity Share of Rs. 10/- each at par on 10th July.

- The non-convertible part of Rs. 150/- each of the aforesaid Debenture (1989 series) will be

redeemed in full at par on the expiry of nine years (i.e. 10th July 1998) from the date of allotment of

the Debentures.

- Each of 14% Secured fully Convertible Debenture of Rs. 100/- each shall be converted into such

number of Equity Share of Rs. 10/- each, credited as fully paid-up, as decided by the Controller of

Capital Issue between 2nd and 4th years from the date of allotment of the said Debenture namely

30th January 1990.

- Rs. 60/- out of the face value of Rs. 150/- each of 14% Secured Redeemable Convertible Debenture

(1990 series) will be converted into four Equity Share of Rs. 10/- each at a premium of Rs. 5/- per

share on 30th May, 1992.

- The non-convertible part of Rs. 90/- each of the afore said Debenture (1990 series) will be

redeemed in full at par on the expiry of nine years from the date of allotment of the Debenture (i.e.

on 30th November, 1999).

- 14% Secured Redeemable Convertible Debenture (1989 series ) and 14% Fully Convertible

Debenture will be further secured by creating additional security as and by way of second and

subservient mortgage and charge on the immovable and movable properties of the company and also

such other properties which the company may acquire infuture in favour of the Trustees in such a

manner and to such an extent as the Board of Director and the Trustees may agree upon.

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- 14% Secured Redeemable Convertible Debenture (1990 series) will be further secured by creating

additional security as and by way of second and subservient mortgage and charge on the immovable

and movable properties of the companies relating to its project for the manufacture of 1,00,000 tpa of

Poly Vinyl Chloride (PVC) Resin and also on such other properties of the project which the company

may acquire in future, in favour of the Trustees, in such a form and to such an extent as the Board of

Directors and the Trustees may agree upon.

- 14% Secured Redeemable Non-Convertible Debenture will be furthersecured by creating additional

security by way of such a mortgageandcharge on the immovable and movable properties of the

companies relating to its project for the manufacture of 1,00,000 tpa of poly vinyl chloride (PVC)

Resin and also on such other properties of the project which the company may acquire in future , in

favour of the Trustee in such a form and to such an extent as the Board of Directors and the Trustees

may agree upon.

1992- The Ethylene di-chloride (EDC) and ethylene unloading arms of the open sea cryopgenic jetty

with unloading of three chemical tankers carrying EDC and ethylene were commissioned.

- During September/October, the Company offered 428,59,570 Rights equity shares of Rs 10 each for

cash at a premium of Rs 30 per share in proportion 1:2. Additional 1,74,701 shares allotted to retain

oversubscription.

- Another 21,46,612 No. of equity shares issued to employees (only 49,400 shares taken up).

Unsubscribed portion of 20,97,212 shares allotted to UTI (10,00,000 shares) and ICICI (10,97,212

shares).

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- Also 5,72,670 shares issued to ICICI, IDBI and IFCI. Of these 1,90,000 shares each were taken up

by ICICI and IFCI.

- 109,46,662 Equity Shares of Rs. 10/- each existing at the beginning of the year, and pro-rata on

40,25,000 No. of Equity Shares of Rs. 10/- each allotted pursuant to the second compulsory

conversion, which took place on 10th July, 1991, of 14% Secured Redeemable Convertible

Debentures issued by the Company to public in May 1989.

- Non-Convertible Debentures (1990 Issue) for making the respective Debentures fully paid-up.

Secured Fully Convertible Debentures (1989 Issue) and Secured Redeemable Convertible

Debentures (1990 series) have been converted into Equity Shares of the Company on 1st April, 1992

and 30th May, 1992 respectively in terms of the concerned consent orders received from the

Controller of Capital Issues (CCI).

- The Company signed during the year under review an agreement with the Industrial Credit and

Investment Corporation of India Limited and Industrial Finance Corporation of India for term loan of

Rs. 500 lakh for the Project.

- The Company proposes to issue 450,78,852 No. of Equity Shares of Rs. 10 each at a premium of

Rs. 30 per Equity Share to its shareholders on rights basis, to its employees and to financial

institutions

- The Company has received technical know-how from the collaborators namely UHDE GmbH,

Germany for the manfacture of PVC resin which project is under implementation.

1993- Sales of pipes and fittings were affected due to prolonged transporter's strike in two

consecutive months during the first half of the year and lower utilisations of production capacity.

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- The Company has successfully commissioned the ethylene di-chloride (EDC) and ethylene

unloading arms of the open sea cryogenic jetty with unloading of three chemical tankers carrying

EDC and ethylene.

- During the year under review, the Company made an issue of equity shares in terms of the letter of

offer dated 25th August, 1992. The issue of equity shares received an overwhelming response from

the members of the Company and was oversubscribed. The allotment of equity shares was made on

1st December, 1992.

- The Company has signed during the year under review a foreign currency loan agreement with The

Industrial Credit and Investment Corporation of India Limited for term loan of Rs. 75 million under

IBRD Pollution Control Project Line already sanctioned for the PVC resin project.

- During the current year, a loan agreement has been also signed with Bank of Baroda, for a rupee

term loan of Rs. 142.3 million for the PVC resin project in accordance with the means of finance

approved by The Industrial Credit and Investment Corporation of India Limited.

- The Company set up during the current year its own R&T centre at its registered office at Pune.

- The Company has received technical know-how from the collaborators namely UHDE GmbH,

Germany for the manufacture of PVC resin.

1994- The entire PVC plant was commissioned. The Company undertook debottlenecking and

balancing equipment programme to enhance the existing production capacity.

- During September, the Company issued 40,000,000 warrants to the promoter group on preferential

basis. The warrants were to be converted into equal number of shares of Rs 10 each at a premium of

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Rs34.44 per share. Accordingly 178,07,850 warrants were converted into equity shares.

- Finolex Polymers Ltd. is a subsidiary of the company.

- The sales of pipes and fittings were affected principally due to prolonged transporters' strike in two

consecutive months during first half of the year under review and lower utilisation of productive

capacity as compared to the previous year.

- The company has successfully launched its PVC resin on all India basis and the product has been

well accepted by the market.

- The company will be introducing the emulsion/paste grade PVC into the market.

- The company will be launching during the year its new productdevelopedinhouse, namely SWR

pipes and fittings.

- The company has been granted the highest category credit rating, namely P1+ credit rating, by

CRISIL for issue of commercial paper.Therating of P1 indicates that the degree of safety regarding

timely payment on the instrument is very strong. + (plus) sign for rating reflects a comparatively

higher standing within the category.

- The company has tied up with banks for working capital requirements of PVC resin division.

1995- The entire PVC plant has got commissioned during the year under review.

- The Company has undertaken debottlenecking and balancing equipmentprogramme to enhance the

existing production capacity.

- The Company signed loan agreement with The Industrial Credit and Investment Corporation of

India Limited to meet a part of the cost of constructing additional storage facility for feed stock on

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site, forming part of the expenditure to be incurred on debottlenecking and balancing equipment

programme.

- The Company signed an amicable agreement with the workers' union on 6th October, 1994 which is

valid for a period of three and half years ending 31st March, 1998.

- The non-convertible part of Rs. 150/- each of 14% Secured Redeemable Convertible Debentures

(1989 Series) will be redeemed in full at par on the expiry of nine years from the date of allotment of

the Debentures i.e. on 10th July, 1998.

- The non-convertible part of Rs. 90/- each of 12,161,917-14% Secured Redeemable Convertible

Debentures (1990 Series) will be redeemed in full at par on the expiry of nine years from the date of

allotment of the Debentures i.e. on 30th November, 1999.

- The non-convertible part of Rs. 90/- each of 95,757-14% Secured Redeemable Convertible

Debentures (1990 Series) will be redeemed in full at par at the expiry of nine years from the date of

allotment of the Debentures i.e. on 3rd September, 2001.

- 14% Secured Redeemable Non-Convertible Debentures of Rs. 100/- each will be redeemed together

with a redemption premium of Rs. 5/- per Debenture in three equal instalments at the expiry of 6th,

7th and 8thyear from the date of allotment i.e., 30th November, 1996, 30thNovember, 1997 and 30th

November, 1998 respectively.

1996- The Company has introduced in the market five grades of suspension PVC and four grades of

emulsion/paste PVC.

- The Pipes Division of the Company has been granted Quality Systems Certification Licence as per

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IS/ISO 9002 by Bureau of Indian Standards, accredited by RaadVoor de Certificates, Netherlands.

- R.D. Aga, Director of the Company then, passed away on 16th February.

- In June, the Company allotted 1,145,340 equity shares to financial institutions, namely The

Industrial Credit and Investment Corporation of India Limited, Industrial Development Bank of India

and Industrial Finance Corporation of India Limited at a premium of Rs.5 per share, pursuant to the

Conversion option exercised by them in respect of their rupee term loan.

- In November, the Company redeemed (with proportionate premium) 1/3rdof the aggregate face

value of 7,885,756 Non-Convertible Debentures of Rs. 100 each In accordance with the terms of

their issue and allotment.

1997- The Company has installed jumbo bags unloading and raw material transportation system.

- In April, the Company signed loan agreement with Kredietbank N.V. for foreign currency loan of

USD 9.6 million, with Ministry of Finance's approval under the External Commercial Borrowings

(ECB) guidelines.

- The ECB facility has been set up in co-operation between IndusindBank Limited and Kuedietbank

N.V., Brussels - Belgium.

- The Company has given donations, bought benches and done electrification of classrooms and

flooring for schools in Ranpar and Ratnagiri. The Company has also given donation to the remand

home and to Aawishkar, the spastic institution in Ratnagiri attending to children.

- 367,650 No. of Equity Shares have been allotted for consideration other than in cash to the

shareholders of the erstwhile FinolexPlastics Pvt. Ltd. pursuant to the scheme of amalgamation.

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- 5,511,093 Equity Shares have been issued as fully paid up Bonus Shares by capitalisation of

General Reserve.

- 2,012,500 No. of Equity Shares have been issued at par on 1stconversion of 14% Secured

Redeemable Convertible Debentures (1989 Series) on 10th January, 1990.

1998- LPG import and storage facilities set up by the Company have been successfully

commissioned.

- The Company has developed specialty fittings for large diameter pipes with elastomeric sealing

ring joints.

- During the period under review, the Company redeemed 1989 SeriesDebentures fully and paid the

second instalment of NonconvertibleDebentures.

- On 13th February, the Company signed the Agreement with National Securities Depository Limited

dematerialising its equity shares for the benefit of its members.

- During the period under review, Mr. M.P. Modi was nominated as a Director on the Board of

Directors of the Company by Life Insurance Corporation of India.

- The Company has planted more than 30,000 trees near PVC plant to maintain ecological balance.

These trees are being grown on water treated in the effluent treatment plant of the Company.

1999- The Company was honoured with the Mahratta Chamber of Commerce, Industries and

Agriculture's prestigious Dr. R.J.Rathi 'Environmental Pollution Control' award for outstanding

efforts in controlling pollution and protecting the environment at the plant.

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- The Company is setting up a PVC pipes plant of about 10,000 metric tons per annum capacity

adjacent to its PVC plant.

- The Company signed during the year under review Tripartite Agreement with Central Depository

Services (India) Limited and MCS Limited for dematerialisation of equity shares.

2000- Crisil has assigned an `AA-' rating to the proposed Rs 50-crore NCD issue and `P1+' rating to

the Rs 60 crore commercial paper programme of the company.

- The Company's PVC plant at Ratnagiri has received a `Safety Award' from the National Safety

Council, Maharashtra Chapter, for achieving the lowest accident frequency rate under the Chemicals

and Fertilizers Industry Group, during 1999.

- The Board of the company proposed to buyback 10 per cent of its shares at a price not exceeding Rs

40 per share.

2001- The Company is introducing a stock option scheme for its employees.

2002-Finolex Industries has acquired 13.39% of the company's paid up capital from the open market

under the buyback scheme.

-Finolex Industries has witnessed 56.69% increase in the net profitatRs.59crs as against Rs.37crs.

-Mr.K.N.Atmaramani has been co-opted as the Additional Director of the company.

-The Board of Finolex Industries have approved for the expansion of installedcapacityoc company's

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PVC plant at Ratnagiri by additional 130,000MT per annum.

2003-Finolex Industries Ltd have informed BSE that the company is buying backits ordinary shares

of Rs.10 each.

-Finolex Industries is increasing its capacity to produce Polyvinyl Chloride Pipes (PVC) to 52000

tonne a year during the current fiscal.

-Finolex Industries is investing Rs.500cr with a view of expanding its Ratnagiri facility.

-Finolex infused Rs 23 cr to increase output and has added a new extrusion line at its Ratnagiri

facility

2007-Finolex Industries Ltd (FIL) is close to signing a agreement with Tishman Speyer India

Ventures, a company engaged in real estate development, for the sale of its land in Chinchwad, near

Pune, which currently houses one of its PVC pipe manufacturing facility.

2008-Finolex Industries Ltd has recommended dividend @ 30%.

2009-Mr P D Karandikar has been appointed as additional director of the company.

-Finolex Industries Ltd has recommended dividend @ 10%.

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2010-Finolex Industries Ltd has recommended dividend @ 30%.

-Mr. K Cherian Varghese has been appointed as additional director of the company.

2011-Finolex Industries Ltd has recommended dividend @ 30%.

-Mr. D. N. Damania has been appointed as additional director of the company.

2012-Finolex Industries Ltd has recommended dividend @ 30%.

2013-Finolex Industries Ltd has recommended dividend @ 55% (Rs. 5.50 pershare) for the financial

year 2012-2013

2014-Finolex Industries Ltd has recommended dividend @ 70% (Rs. 7.00 per share) for the financial

year 2013-2014

2015-Finolex Industries bags 2nd prize for product presentation at the 20th IPC

-Global CSR Excellence & Leadership Awards

-Marathon for Breast Cancer Awareness Powered By Finolex Pipes

-Finolex was awarded the Best Safety Practices Award

-Revolo Launch at Finolex Industries

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MANAGEMENT OF THE ORGANISATION

Name Designation

Prakash P Chhabria Executive Chairman

Sanjay S Math Managing Director

Anil V Whabi Director - Finance

Kanaiyalal N Atmaramani Independent Director

Shrikrishna N Inamdar Independent Director

Sunil U Pathak Independent Director

Saurabh S Dhanorkar Managing Director

Ritu P Chhabria Non Exe.NonInd.Director

Sanjay K Asher Independent Director

Dara N Damania Independent Director

Prabhakar D Karandikar Independent Director

Anil V Whabi Whole Time Director - Finance

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PORTERS FIVE FORCES MODEL

Porter's Five Forces is a framework for industry analysis and business strategy development

formed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial

Organization (IO) economics to derive five forces that determine the competitive intensity

and therefore attractiveness of a market. Attractiveness in this context refers to the overall

industry profitability. An "unattractive" industry is one in which the combination of these five

forces acts to drive down overall profitability. A very unattractive industry would be one

approaching "pure competition", in which available profits for all firms are driven down to

zero.

The Five Forces are

1. The threat of the entry of new competitors.

2. The threat of substitute products or services.

3. The bargaining power of customers (buyers).

4. The bargaining power of suppliers.

5. The intensity of competitive rivalry.

For plastics producers worldwide, India represents a range of highly new opportunities for

growth. The plastics industry in India has made significant achievements ever since it made a

modest but promising beginning by commencing production of polystyrene in 1957.The

Indian plastic industry conforms to the levels of sophistication required to produce plastic and

plastic products of international quality standards.

The consumption of plastics in 1998 is estimated at 25 million tons by the year 2015. The

demand for plastics is growing approximately @ 22% annually and plastic consumption in

India is expected to increase from almost 2.5 million tons every year .

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During the marketing research undertaken in Ajay pipes, New delhi, the information

collected regarding its competitors, products and the suppliers and the intensity of

competitive rivalry has been analyzed using Porters five forces model and is as follows:

1. The Threat of the Entry of New Competitors

Profitable markets that yield high returns will attract new firms. This results in many new

entrants, which eventually will decrease profitability for all firms in the industry. Unless the

entry of new firms can be blocked by incumbents, the abnormal profit rate will tend towards

zero (perfect competition). Finolex Industries Ltd is the largest manufacturer of rigid poly

vinyl chloride (PVC) pipes and fittings in India having a market share of nearly 10 per cent.

The company's manufacturing capacity of 36,000 tons for PVC pipes and fittings is likely to

be increased to 50,000 tons by the end of next year. Recently, FIL commissioned an ultra-

modern PVC pipes plant at Ratnagiri in Maharashtra. The company also has a plant in Pune.

The main competitors for Finolex pipes in the market now are:

ASTRAL

Astral was set up in 1996 as a private limited company by Mr. Sandeep Engineer as Astral

Poly Technik Private Limited. The name of the company was subsequently changed to Astral

Poly Technik Limited in 2006. It manufactures and trades in CPVC and lead-free poly vinyl

chloride (PVC) plumbing systems for residential, commercial and industrial applications.

Astral entered into a licensing agreement with Lubrizol Corporation (USA) and a techno-

financial joint venture with Specialty Process LLC, USA to manufacture products under the

flow guard brand and for obtaining necessary technical expertise for manufacturing CPVC

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 pipes and fittings. The company started its CPVC production in 1999 and subsequently

entered into lead-free PVC pipe manufacturing in 2004. The company operates two plants,

one in Gujarat and the other in Himachal Pradesh to manufacture plumbing systems from 1/2'

to 8' diameter. As on March 31, 2010, Astral has total manufacturing capacity of 30,867

tonnes of pipes and fittings per annum (TPA). The company has a variety of product portfolio

of higher and lower range of pipes and fittings suitable for value as well as premium markets.

SUPREME INDUSTRIES LIMITED

The Supreme Industries Ltd is Indias leading plastic products manufacturer. The company

operates in the injection moulding and extrusion segments. Supreme has the largest capacity

in India, with 22 manufacturing facilities and a pan-India distribution network.

Details of business segments

Segment Products

Plastic pipingUPVC pipes, plastic fittings, HDPE pipes,

system CPVC pipes system,

PPRC pipes system, LLDPE pipes

Packaging Specialty, protective packaging and cross

products laminated films

Industrial Industrial components for auto and consumer

products durables, material

handling products

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 Consumer

products Furniture

Ajay industrial corporation limited

In 1961 AICL started its operation in the Flagship area of Plumbing pipes, in new delhi and

afterwards, AICL became an important PVC pipes and fittings manufacturer of India and it

has also received various Prestigious awards , including one of the best ISI mark for quality.

Afterwards more organizations came into the plastic (PVC) manufacturing industry and so

that the competition also becomes huge.

Ashirwad

Ashirwad is the licensee of Lubrizol, USA to manufacture and market FLOWGUARD CPVC

(Chlorinated Polyvinyl Chloride) plumbing systems in India. Ashirvad uses N.S.F listed

compound ( Temprite 88628 Tan 309 and Tan 311) from Lubrizol to manufacture a world

class CPVC piping system.

Ashirvad Flowguard is a potable water distribution system made of chlorinated polyvinyl

chloride (CPVC) for use in single and multi family homes, apartments, high-rises,

hotels/motels and commercial installations. It has a history of superior performance and

competitive prices compared to metal and other alternative piping systems.

In a sentence Ashirvad Flowguard is the highest quality and best-valued hot and cold potable

water piping system available. Ashirvad has a Design registered for alignment on the plastic

fittings.

24
Some major Players going to Launch:

TATA PIPES

RELIANCE PIPES

2. The Threat of Substitute Products or Service

The threat of substitute is high when the price of that substitute product falls or it is

easy for consumers to switch from one substitute product to another or when buyers

are willing to substitute. The development of PVC pipes and all type of Plastic fittings

and equipments over the world is by using the organochlorine called Poly Vinyl

Chloride (PVC). Finolex is also developing all type of pipe products (rigid pipes,

flexible hoses etc.) using the same organochlorine PVC. The competitors are also

using the same technology. So there is no substitute products made from other

organochlorine, the plastic products are all made from the same organochlorine PVC,

But quality of moulding machines and processing technology that are used by this

company is very fine , which outcomes in certifications awarded to this company by

various trusted agencies.

3. The Bargaining Power of Customers (Buyers)

Buyers or customers can exert influence and control over an industry in certain

circumstances. This happens when:

There is little differentiation over the product and substitutes can be found easily.

Customers are sensitive to price.

25
 Switching to another product is not costly.

Nowadays customers have the buying power and they have the choice in the market to

choose the product what they want.

4. The Bargaining Power of Suppliers

Suppliers are also essential for the success of an organization. Raw materials are needed to

complete the finished product of the organization. Suppliers do have power. This power

comes from:

If they are the only supplier or one of few suppliers who supply that particular raw

material.

If it costly for the organization to move from one supplier to another (known also as

switching cost

If there is no other substitute for their product.

.5. The Intensity of Competitive Rivalry

If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for

customers to move to substitute products for example from coke to water then again rivalry

will be high. Generally competitive rivalry will be high if:

There is little differentiation between the products sold between customers.

Competitors are approximately the same size of each other.

If the competitors all have similar strategies.

It is costly to leave the industry hence they fight to just stay in (exit barriers).

26
In India the PVC industry is going through high competitive rivalry. As too many

organizations are coming to PVC pipes & Fittings manufacturing industry yearly, the

competition is also becoming higher. Strategy persuaded by Finolex pipes are:

Produces good quality product.

Assigning targets to each Distributors and as such rewarding them with attractive

prizes.

To develop a sense of respect for oneself in others mind.

These all , help them to overcome the intensity of competitive rivalry in the PVC plumbing

pipes & other Manufacturing industry.

27
 Objective of the Project

To find out the potential dealers and retailers in Delhi NCR region who are giving

a market presence and can be approved by the company to expand its market.

To find out the major competition who are dealing with CPVC pipes in NCR

region and at what prices different Brands or the distributor are giving to different

medium and large outlets.

To find out the visibility of different outlets so that the branding techniques could

be identified.

To analyse the data and recommendations so that the demand for Finolex Pipes

CPVC product can be increased.

To know the number of dealers that are interested to do business with Finolex

Pipes.

Scope of the project

The questionnaire filled will help them to have the complete analysis of the

competition in the market and different types of strategy could be planned to

compete with the competition.

The dealers dealing with Finolex Pipes are asked about the distributors response

and what changes with the company that they desired.

As I covered around 250 outlets in Gurgaon region basically I analysed tat

Astral is HavingaVery big CPVC market share irrespective of flowguard and

astrals tie up has broken.

To let the people know about what Isflowguard who is lubrizol and what they

contribute to the CPVC product market.

28
 People were not even aware about the fact that astral is no longer working with

flowguard the plumber still think that its flowguard by guiding the retailers

about the flowguard they can help us letting the plumbers know.

Expected outcomes

Knowing the CPVC market of Finolex industries and other brands competing

with Finolex in CPVC market.

Identifying the price of the different Brands which will analyse the competition

mapping and help the company in this highly competitive market.

Approaching and Building retailers and distributors relationships with the

Company.

The main expectation would be to know the brands which is giving competition

in Finolex price range because the Flowguard and Finolex tie up has made the

Quality of the CPVC improvement as stated by many retailers.

Mapping competition Outlets and Area wise.

29
 Methodology Used

Research Methodology

The research used is of exploratory Type because Finolex pipes is in expansion mode They

are trying to Find out the potential Distributors in Gurgaon region .

Sources of Data

The source of Data collection is:-

Primary Data- Primary Data was collected From the market Directly by interacting with the

dealers and the retailers through the survey method Questionnaire were filled with each

retailers separately

30
 DATA ANALYSIS

PHASE 1

In phase 1 of the project we need to find the hardware shops in the regions which

were provided by the company.

After finding the shops we just need to note down the area wise address and take the

photo of the outlet

After completing the work we need to send the total outlets area wise which we have

visited in a excel report and send it to the company.

This phase continued for a week and it was very nice to explore the markets and

finding the convienient shops and categorise according to their size

31
32
PHASE 2

IN PHASE 2 WE NEED TO GO THROUGH THE ORGANISATION ACCORDING

TO THE BEAT PLAN AND INTERACT WITH THE OWNER OF THE OUTLET.

WE WERE PROVIDED WITH A KIT WHICH WE NEED TO PRESENT TO THE

SHOPKEEPER AND TELL THEM ABOUT THE BRAND ACTIVATION.

WE WERE ALSO PROVIDED WITH THE QUESTIONNAIRE WHICH WE NEED

TO GET FILLED WITH THE SHOPKEEPER AND PROVIDE THEM WITH OUR

VISTING CARDS MENTIONING OUR CODES.

33
PHASE 3

IN PHASE 3 WE HAVE TO VISIT THE MARKETS OR THE SHORTLISTED

SHOPS WITH OUR MENTOR AND CONVIENCE THEM TO PROVIDE THE

RESPONSE ON OUR ACTIVATION PROJECT.

ALSO WE NEED TO GET THE APPROPRIATE INFORMATION THAT

WHETHER THEY WOULD LIKE TO WORK WITH OUR COMPANYOR NOT.

THIS PHASE PROVIDED US WITH THE REAL THINGS AND THE

PRACTICALITY OF THE MARKET AND THE DIFFERENT TYPES OF

RESPONSES WE GATHER FROM DIFFERENT PEOPLE.

34
35
36
THIS IS THE QUESTIONNAIRE WE HAVE TO FILLED WITH THE OWNER OF THE

OUTLET BECAUSE THE INFORMATION HAS TO BE ACCURATE.

37
38
39
 Limitations/Challenges Faced

Biased response- Some retailers were unwillingly providing the information which

were giving the inadequate response from them.

Lack of proper Resources-At Some phase of the project The management of the kits

to be Given yo the retailers were not properly arranged and which engages the work.

Lengthy Questionnaire- The questionnaires given to us was bit lengthy for some

retailers at work because some were engaged in their work and gritting irritated with

the So many questions.

Time wastage- At some phase of the project We need to visit the same counter again

which could not make the proper utilisation of the time.

How Did You overcome the challenges

The guidance provided by the Team E4 which was led by Mr BhushanLavande Sir

along with PrashantMandke sir Who were always there to help Us with their time and

resources when and wherever needed.

The Finolex Sales executive Who guided me at every phase of the Project. My Sales

executive was AshishRastogi Sir Who was there for me always help me even I have

called him 5 times in an hour but he was there to guide everything properly.

There were many times I feel like that I have chosen the difficult Job but the work

which I did will surely help more than any other job because I have learned the

practicality of life With Some Best advise

40
PROFIT AND LOSSES

Mar- Mar- -
Y/e 31 Mar( In .Cr) -
2017 2016

--
Revenue 2,988 2,843
--

--
yoy growth (%) 5.08 --
--

--
Raw materials (1,995) (2,009)
--

--
As % of sales 66.80 70.70
--

--
Employee costs (105) (92)
--

--
As % of sales 3.51 3.25
--

--
Other costs (325) (337)
--

--
As % of sales 10.90 11.90
--

--
Operating profit 563 404
--

--
OPM 18.80 14.20
--

Depreciation (55) (51) --

41
 --

--
Interest expense (15) (45)
--

--
Other income 32.50 49.20
--

--
Profit before tax 525 358
--

--
Taxes (170) (125)
--

--
Tax rate (32) (35)
--

--
Minorities and other -- --
--

--
Adj. Profit 355 233
--

--
Exceptional items -- 24.50
--

--
Net profit 355 258
--

--
yoy growth (%) 37.70 --
--

--
NPM 11.90 9.07
--

42
 BALANCE SHEET

Balance Sheet of Finolex Industries ------------------- in Rs. Cr. -------------------

Mar '17 Mar '16 Mar '15 Mar '14 Mar '13

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 124.10 124.10 124.10 124.10 124.09

Equity Share Capital 124.10 124.10 124.10 124.10 124.09

Reserves 2,167.30 833.72 663.30 665.59 597.08

Networth 2,291.40 957.82 787.40 789.69 721.17

Secured Loans 94.18 111.71 565.90 636.21 690.92

Unsecured Loans 0.00 0.00 21.16 19.71 19.71

Total Debt 94.18 111.71 587.06 655.92 710.63

Total Liabilities 2,385.58 1,069.53 1,374.46 1,445.61 1,431.80

Mar '17 Mar '16 Mar '15 Mar '14 Mar '13

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 954.31 1,921.19 1,893.02 1,849.41 1,770.70

Less: Accum. Depreciation 99.18 1,071.54 1,025.26 944.20 891.17

Net Block 855.13 849.65 867.76 905.21 879.53

Capital Work in Progress 21.75 6.62 10.40 32.46 50.61

Investments 1,222.17 288.03 179.66 221.45 359.61

43
Inventories 557.40 447.22 558.65 505.95 482.78

Sundry Debtors 52.49 17.63 48.70 40.99 38.72

Cash and Bank Balance 16.34 10.41 12.30 20.92 9.05

Total Current Assets 626.23 475.26 619.65 567.86 530.55

Loans and Advances 227.26 199.93 181.67 183.99 218.23

Total CA, Loans & Advances 853.49 675.19 801.32 751.85 748.78

Current Liabilities 554.59 588.29 445.34 355.13 513.40

Provisions 12.38 161.67 39.35 110.24 93.33

Total CL & Provisions 566.97 749.96 484.69 465.37 606.73

Net Current Assets 286.52 -74.77 316.63 286.48 142.05

Total Assets 2,385.57 1,069.53 1,374.45 1,445.60 1,431.80

Contingent Liabilities 225.13 244.28 285.14 259.54 191.83

Book Value (Rs) 184.65 77.18 63.45 63.64 58.11

Source : Dion Global Solutions Limited

44
45
CASH FLOW

Mar- -
Y/e 31 Mar ( In .Cr) Mar-2017 -
2016

-
Profit before tax 525 358 --
-

-
Depreciation (55) (51) --
-

-
Tax paid (170) (125) --
-

-
Working capital 134 -- --
-

-
Other operating items -- -- --
-

-
Operating cashflow 433 -- --
-

-
Capital expenditure 59.40 -- --
-

-
Free cash flow 493 -- --
-

-
Equity raised 3,302 -- --
-

-
Investments 410 -- --
-

Debt (117) -- -- -

46
 Mar- -
Y/e 31 Mar ( In .Cr) Mar-2017 -
2016

financing/disposal -

-
Dividends paid -- -- --
-

-
Other items -- -- --
-

Net in cas

-
4,087 -- --
-

47
RESULTS

Mar-
Particulars ( Rupees In Crores.) Mar-2017 Mar-2015 Mar-2014
2016

Gross Sales 2,988 2,843 2,452 2,428

Excise Duty -- -- -- --

Net Sales 2,988 2,843 2,452 2,428

Other Operating Income -- -- 24.40 25.40

Other Income 24.30 64.10 20.20 43.70

Total Income 3,012 2,907 2,496 2,497

Total Expenditure ** 2,425 2,439 2,287 2,126

PBIDT 587 469 210 371

Interest 15.30 44.70 70.40 66.40

PBDT 572 424 139 304

Depreciation 55.10 50.60 58.70 62.30

Tax 159 103 33 59

Fringe Benefit Tax -- -- -- --

Deferred Tax 5.45 16.20 -- 12.70

Reported Profit After Tax 352 254 47.80 170

Extra-ordinary Items -- 16.70 (13) (49)

Adjusted Profit After Extra-ordinary item 352 238 60.50 219

EPS (Unit Curr.) 28.40 20.50 3.85 13.70

EPS (Adj) (Unit Curr.) 28.40 20.50 3.85 13.70

Calculated EPS (Unit Curr.) 28.40 20.50 3.85 13.70

Calculated EPS (Adj) (Unit Curr.) 28.40 20.50 3.85 13.70

48
 Mar-
Particulars ( Rupees In Crores.) Mar-2017 Mar-2015 Mar-2014
2016

Calculated EPS (Ann.) (Unit Curr.) 28.40 20.50 3.85 13.70

Calculated EPS (Adj) (Ann.) (Unit Curr.) 28.40 20.50 3.85 13.70

Book Value (Unit Curr.) -- -- -- --

Dividend (%) 115 100 20 70

Equity 124 124 124 124

Reserve & Surplus 2,167 1,446 663 666

Face Value 10 10 10 10

Public Shareholding (No Of.Shares) -- -- 58,981,68458,994,784

Public Shareholding (% in Equity) -- -- 47.50 47.50

Pledged/Encumbered - No. of Shares -- -- -- --

Pledged/Encumbered - % in Total Promoters

-- -- -- --
Holding

Pledged/Encumbered - % in Total Equity -- -- -- --

Non Encumbered - No. of Shares -- -- 65,113,69765,100,596

Non Encumbered - % in Total Promoters Holding -- -- 100 100

Non Encumbered - % in Total Equity -- -- 52.50 52.50

PBIDTM(%) 19.70 16.50 8.56 15.30

PBDTM(%) 19.10 14.90 5.69 12.50

PATM(%) 11.80 8.95 1.95 7.01

49
 Mar-
Particulars ( Rupees In Crores.) Mar-2017 Mar-2015 Mar-2014
2016

PRODUCT DESCRIPTION

THERE WERE VARIOUS PRODUCTS

WE NEED TO DEAL WITH LIKE

PLUMBING PIPES AND PLUMBING

PRODUCTS OF DIFFERENT KINDS

BUT THE MAIN PRODUCT WAS THE

CPVC PIPES IN WHICH WE HAVE TO

GIVE MORE IMPORTANCE

OTHER WERE ITEMS SUCH AS ASTM

PIPES AND FITTING AND OTHER

MATERIAL ALSO.

50
51
52
53
54
55
56
CONCLUSION

The communication Skills and the Patience level are surely improved very much

Which will Give me With Great Opportunities and better Enhance my Future.

In the Last phase in which We need to interact with the Sales executive to the

retailers In this phase we got the Practical knowledge That how to deal with different

type of retailers and what prices to be offered to different outlets according to their

Size and capacity to sell the products.

In phase 2 we were representing A big brand and letting the people know about the

new product and the flow guard so we should be justifying the Company.

THANKS for selecting me for this great opportunity.

57
Suggestions/ Recommendations

Phase1 and 2 can be done at the same point of time because just simply going

through outside of shop and taking picture rather we could talk to then and if

required fill the questionnaire.

Most of the retailers were Asking For the Price list though I told them that I

am from marketing they said that without price list this kit is of no use

because everyone was keen to know the prices of Finolex CPVC pipes

Every retailer was very happy with the Quality and The brand name that Finolex has started

Doing Marketing and working on prices.

Thankyou so much for giving me with such a great opportunity and starting my career in such

a way will boost it in a different way.

58
BIBLIOGRAPHY

BOOK REFERRED

MARKETING MANAGEMENT BY(PHILIP KOTLER)

WEBSITES VISITED

Profit.ndtv.com

Finolexwater.com

Google.com

DION GLOBAL DIGITAL LIMITED

59