AFFLUENCE

Directors Report

Your Directors have pleasure in presenting their 20th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016. 

1.   FINANCIAL HIGHLIGHTS OF THE COMPANY (Standalone)
              (Amount in INR Millions)

2. REVIEW OF OPERATIONS:

The global economy in 2015-16 faced challenges such as declining commodity prices, subdued growth and fluctuating exchanging rates. Against this backdrop and declining growth trend by emerging markets, India emerged as a contrarian in 2015-16. The GDP growth of India in 2015-16 at constant prices was estimated to be 7.6% against the 7.2% growth recorded the previous year.
The growth in gross fixed capital formation increased to 3.9% in 2015-16 at constant prices.
The company capitalized well on the economy’s growth story despite commodity prices being subdued in the year under review supported by a higher volume growth. The company achieved turnover of INR 52,178.33 Millions in 2015-16, which is 20.73% over the previous year..
During the year under review, Consumer Business segment grew by over 60% on a lower base.
Company’s EBITDA in 2015-16 was INR 4668.77 Millions against INR 4,229.71 Millions in the previous year. The EBITDA margin decreased from 9.79% in 2014-15 to 8.95% in 2015-16..The PBT increased to INR 2487.98 Millions in 2015-16, a growth of 8.45% over the figures achieved in 2014-15
In the year 2015-16, five subsidiary companies (viz., Jaisingh Wires Private Limited, Polycab Wires Industries Private Limited, Polycab Electrical Industries Private Limited and Datar Nouveau Energietechnik Limited and Polycab Electronics Private Limited) merged with Polycab Wires Private Limited, hence previous year’s figures are not comparable.





3. DIVIDEND
   An interim dividend on 14,12,05,838 Equity Shares of INR. 10/- each @ 12.5 % i.e. INR. 1.25 per share amounting to INR 17,65,07,297.50 was declared on 25th March, 2016 which was taken as final dividend for the F.Y. 2015-16.

4. CREDIT RATING
During the year under review the credit rating of the Company was AA- as per Credit Rating report issued by Fitch India Ratings.


5. DETAILS OF SUBSIDIARIES

6. FIXED DEPOSITS
The Company has not accepted any deposits from public.

7.STATUTORY AUDITORS
        M/s S R B C & CO LLP, were appointed as Statutory Auditors of your Company for a term of five consecutive years at the Annual General Meeting held on 20th September, 2014 which was ratified for a further period of one year at the last Annual General Meeting held on 5th December 2015. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors needs to be ratified by shareholders for a further period of one year i.e 1st April 2016-31st March 2017 in the ensuing Annual General Meeting.

Explanation /comments by Board on qualification ,reservation or adverse remark  or disclaimer made by the auditor:













Auditors Report on other Legal Requirements(Annexure referred to in paragraph 1 under the heading “Report on other Legal and Regulatory requirements”

(c) (ii)Auditor’s Remarks: Title deeds of freehold land amounting to INR. 29.82 Million were not in the name of the company. The company has initiated the process of transferring these properties in its name.

Director’s Comments

The company has taken necessary steps for transferring these properties in its name .

( C) (iii) Auditor’s Remarks: Title deeds of freehold land amounting to INR. 138.02 Million and of lease hold land amounting to INR 1.4 Millions were not readily available

Director’s Comments

The company has taken necessary action to trace /retrieve these Title deeds.


(c) (iv) Auditor’s Remarks: Title deeds of freehold land amounting to INR. 9.28 Million is in dispute & is pending resolution with government authority in Gujarat.

Director’s Comments

The company has initiated necessary steps/actions to resolve the title dispute with Gujarat Government Authorities.

Annexure 2 – To the Independent Auditors Report on the Standalone Financial Statements of Polycab Wires Private Limited.

Auditor’s Remarks - Disclaimer of opinion

During the year, the company implemented a new ERP system. According to the information and explanations provided to us, since the ERP system was under stabilization, the company relied on its legacy and manual controls. Since the company was not able to provide us with sufficient appropriate audit evidence on the system of internal finance control over financial reporting based on the essential components as stated in the Guidance Note on Audit of Internal Finance Controls over Financial Reporting issued by the institute of Chartered Accountants of India we are unable to express an opinion on the adequacy or operating effectiveness of Internal Financial Controls over Financial Reporting as at March, 31, 2016. 

Director’s Comments
During the year under review, the company implemented the new ERP system. The said ERP system was under stabilization. As a consequence, wherever the internal financial controls did not exists the company had to place reliance on its legacy and manual controls. Since the new ERP system is under implementation and stabilization the company has manual control in the system.







8. COST AUDITORS
M/s. N. Ritesh & Associates Mumbai, Cost Accountants were appointed for issuing Cost Audit Report and appointment of M/s. N.N.T. & Co. Mumbai, Cost Accountants, for compilation of data for such Cost Audit Report for the Financial Year 2016-17.

9.      AMALGAMATION

As per Bombay High Court order dated 26th February, 2016 and Delhi High Court order dated 18th March, 2016, subsidiary companies viz., Jaisingh Wires Private Limited, Polycab Wires Industries Private Limited, Polycab Electrical Industries Private Limited and Datar Nouveau Energietechnik Limited and Polycab Electronics Private Limited, respectively were amalgamated with Polycab Wires Private Limited.

10. EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No MGT – 9 shall form part of the Board’s report as Annexure 1

11.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A) Conservation of energy:
(i) the steps taken or impact on conservation of energy;
All plants & street lights are equipped with timer which results in 10% power saving in street lights.
Around 05 % of light motion sensor installed which results in 3% saving .
In last one year 39 % of MH (Metal Halide) lights are replaced with LED light resulting 29 % of energy saving in  plant lighting.
All VRF system are set to auto controlled air conditioning to save energy.
All motors installed in machine are operating with VFD ( Variable Frequency Drive).
Installed VFD in Air compressors to save 15 % of power in energy consumed by Air compressors.
Pumping system are in close loop with VFD and pressure transducer, resulting energy saving of 15 % in pumping.
(ii) the steps taken by the company for utilizing alternate sources of energy;
Polycab has 5 wind mills ( 3 Nos of 1.5 MW and 2 Nos of 1.8 MW),almost 33 % of total energy consumed in manufacturing unit ( Polycab- Halol) are generated by renewable sources, details for FY 15–16 are as follows.

(iii) the capital investment on energy conservation equipments;
LED Lights - INR 90.0 Lakhs
APFC Panel – INR 45 Lakhs
Hydro Pumping – INR 30 Lakhs

B) Technology absorption:
the efforts made towards technology absorption; NIL
the benefits derived like product improvement, cost reduction, product development or import substitution; NIL
in case of imported technology (imported during the last three years reckoned from the 
   beginning of the financial year) NIL

the details of technology imported; NIL
the year of import; NIL
whether the technology been fully absorbed; NIL
if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; NIL

(iv) the expenditure incurred on Research and Development. NIL

C) Foreign exchange earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.

Earning in Foreign Exchange during the year was INR 3072.47 Millions

CIF value of Imports was INR 14808.65 Millions

Expenditure in foreign currency amounted to INR 144.28 Millions

12. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated financial statements of the Company and its subsidiary companies which form part of the annual report have been prepared in accordance with section 129(3) of the Companies Act, 2013. Further, a statement containing the salient features of the financial statement of subsidiaries companies in the prescribed format AOC – 1 is annexed herewith as Annexure 2 to this report. The statement also provides the details of performance and financial position of the Subsidiary Companies.






13. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in

Annexure 3.

14. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met 6 times during the financial year ended 31st March, 2016. (in accordance with the provision of Companies Act, 2013 and rules made there under) Summary of Board meeting attended by directors are as under.

15.     DIRECTORS
During the yearunder review Mr. Martin Spicer – Nominee Director of IFC has resigned with effect from 17th February, 2016 & Mr. Rajesh Jain, DMD of the company has resigned with effect from 19th September, 2016. Mr. S.L. Bajaj has been appointed as Whole Time Director Finance with effect from 15th December, 2016..

16.     VIGIL MECHANISM AND WHISTLE BLOWER POLICY
In compliance with provisions of Section 177 of the Act, the Board of Directors of the company has adopted a Vigil Mechanism comprising of Whistle Blower Policy for Directors and Employees of the company. The said policy is available at the company’s website www.polycab.com.

17. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement, the company has in place The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made there under.


18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not given any loans, directly or indirectly or made any investment covered under section 186 of Companies Act, 2013 nor the company has given any security or guarantee.


19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During the financial year 2015-16, your company has entered into transactions with related parties as defined under section 2 (76) of the Companies Act, 2013 read with Companies (Specification of definitions details) rules, 2014, which were in the ordinary course of business and on arms length basis and in accordance with the provisions of Companies Act, 2013 and Rules made there under.



The form AOC – 2 pursuant to section 134(3)(h) of the Companies act read with rule 8(2) of the companies (Accounts) Rules, 2014 is set out as Annexure 4 to this report depicting the details of related party transaction as required under accounting standard 18 and as per section 188 of the Companies Act 2013.

20.     PARTCULARS OF EMPLOYEES RELATED DISCLOSURES
The information required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended 31st March, 2015 has been prepared as Annexure 5. However in terms of section 136 of the Act, the Annual Report is being sent to the members excluding this Annexure. The said Annexure is available for inspection by the members at the registered office of the company during business hours on working days and if any member is interested in obtaining a copy thereof such members may write to the Company secretary thereupon a copy may be sent.

21. DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that—
in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
the directors had 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 had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
the directors had prepared the annual accounts on a going concern basis; and
the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

23. ACKNOWLEDGMENTS
The Directors wish to convey their appreciation to all of the Company's employees for their enormous personal efforts as well as their collective contribution to the Company’s performance. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in its management.

For and on behalf of the Board of Directors


Inder T. Jaisinghani
CMD

Place: Delhi
Date:15TH December 2016.







Annexure 1
Annexure to Directors Report
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

III. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)














Category-wise Share Holding

Shareholding of Promoter-

Changes in Promoters’ Shareholding (please specify, if there is no change)

Shareholding Pattern of top ten Shareholders:
    (Other than Directors, Promoters and Holders of GDRs and ADRs):

Shareholding of Directors and Key Managerial Personnel:

IV) INDEBTEDNESS           (Amounting INR Millions)

V. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

For and on behalf of the Board of Directors


Sd/-

Inder T. Jaisinghani
CMD

Place: Delhi
Date: 15th December 2016






Annexure 2

Form AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

(Information in respect of each subsidiary to be presented with amounts in Rs.)

Part A Subsidiaries

For and on behalf of the Board of Directors


Sd/-

Inder T. Jaisinghani
CMD

Place: Delhi
Date: 15th December 2016











Annexure 3
Annexure to the Directors Report
Corporate Social Responsibility (CSR)

[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]



In accordance with Section 135 of the Companies Act, 2013 (the Act) read with Companies (Corporate Social Responsibility Policy) Rules, 2014 the Board of Directors has adopted Corporate Social Responsibility Policy (the CSR policy). The details of CSR policy can be viewed at www.polycab.com.

The composition of the CSR Committee of the Board is as follows:

Mr. Inder T. Jaisinghani     -      Chairman
Mr. Ramesh T. Jaisinghani   -      Member
Mr. Shyam Lal Bajaj         -      Member (with effect from 15th December, 2016).

The average Net Profit of the company for last 3 Financial Years i.e. 2012-13, 2013-14, 2014-15 was INR 1067.22 Million. Hence the stipulated 2% to be spent annually on CSR activities as prescribed under Section 135(5) of the Act amounts to INR 21.34 Million.  

The details of the spending on CSR activities during Financial Year 2015-16 are as follows:

Total amount to be spent during F.Y. 2015-16  -  INR 21.34 Million.  
Actual amount spent during F.Y. 2015-16     -  INR 17.23 Million.
Amount unspent during F.Y. 2015-16         -  INR 4.11 Million.


Details of CSR expenses incurred at Halol, Daman, HO Mumbai:

Reasons for not spending 2% of the average net Profit of the company.
The Company’s CSR initiatives usually involve Contribution to Rural Development Programmes & Promotion of Education at a small scale to learn from on-ground realities, getting feedback and thereafter putting an enhanced contribution ensuring maximum benefit to the community. For this reason, during the year, the Company’s spend on the CSR activities has been less than the limits prescribed under Companies Act, 2013. The CSR activities will be enhanced which coupled with new initiatives that may be considered in future, the Company will endeavor to spend on CSR activities in accordance with the prescribed limits


For and on behalf of the Board of Directors


Sd/-

Inder T. Jaisinghani
CMD

Place: Delhi
Date: 15th December 2016






























Annexure to Directors Report   Annexure 4
Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s length basis
NA

2. Details of contracts or arrangements or transactions at arm’s length

Note: Appropriate approvals have been taken for related party transactions.
For and on behalf of the Board of Directors



Inder T. Jaisinghani CMD

Place: Delhi
Date: 15th December 2016



























Annexure 1
Annexure to Directors Report
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

III. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)





Category-wise Share Holding

Shareholding of Promoter-

Changes in Promoters’ Shareholding (please specify, if there is no change)

Shareholding Pattern of top ten Shareholders:
    (Other than Directors, Promoters and Holders of GDRs and ADRs):

Shareholding of Directors and Key Managerial Personnel:

IV) INDEBTEDNESS           (Amounting INR Millions)

Short Term Borrowing

V. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

For and on behalf of the Board of Directors


Sd/-

Inder T. Jaisinghani
CMD



Place: Delhi
Date: 15th December 2016

Annexure to Directors Report
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

III. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)





Category-wise Share Holding

Shareholding of Promoter-