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Directors Report of Finolex Cables Ltd.

Mar 31, 2016

The Directors are pleased to present their 48th Annual Report and Audited Accounts for the year ended 31st March, 2016.

FINANCIAL RESULTS: (Rs. in million)

Standalone Standalone Consolidated

2016 2015 2016

Income 25,251.8 25,075.6 26,078.2

Profit Before Interest, Depreciation, Exceptional Items and Tax 4,025.6 3,175.1 4,164.5

Less : Interest 89.5 129.2 124.7

Less : Depreciation 572.3 639.6 613.9

Profit Before Exceptional Items and Tax 3,363.9 2,406.2 3,425.9

Exceptional Items(Loss)/Gain - 225.2 -

Profit Before Tax 3,363.9 2,631.5 3,425.9

Less : Provision for Taxation

(a) Current Tax 1,033.7 619.0 1,033.7

(b) Deferred Tax (70.6) 26.2 (70.6)

(c) MAT Credit - - -

(d) Taxes of Earlier Year (87.7) (0.3) (87.8)

Share of profit/ (loss) of Associate - - 773.9

Profit After Tax 2,488.4 1,986.6 3,324.5

BACKGROUND

In a year that has seen a moderation of global growth from 3.4% to 3.1%, India came off as one of the better performers. The IMF has repeatedly said in the recent past that India is a "bright spot" amidst a slowing global economy. That our local economy has been able to sustain a growth of 7.6% in a year that saw a very poor monsoon (rainfall deficiency of 13%) is a testimony to the Government''s and RBI''s focus on containing inflation, reigning in the CAD, managing the overall budget deficit within the promised 3.9%, of course still supported by soft commodity prices and a reasonably stable currency. While the deficiency in monsoon has impacted the growth of rural economy, and export volumes continued to decline, some green shoots have been observed and overall economic fundamentals have started to improve in recent months. In your Company''s case, volume expansion has been very visible in the second half of the year. The focus that the Government''s budget of 2016-17 provides on infrastructure spending (a planned 22.5% hike from earlier levels), as well as progress on the previously announced programmes such as the various Industrial Corridors, Railways Investments, Smart City Initiatives, Digital Connectivity and Make in India, Power generation thru non-conventional energy sources, etc., augur well for your Company''s chosen areas in the near and medium terms.

OPERATIONS

OVERALL: Growth remained flat in revenue terms for the year under review. As members are aware, your Company''s revenue is linked to commodity prices and the year continued to be "soft" as regards commodity prices. Copper prices were down by about 20% at the end of the year as compared to March 2015. Volume growth was, however, robust during the year. Volumes were higher in all product lines - as compared to the previous year, Electrical Wires grew by 12%, Flexible Wires by 20%, Power Cables by 19%, and all Communication Cables by over 35%.

In terms of outlook for the upcoming year, the recent budget announced by the Government has allocated a substantial increased outlay on infrastructure related spending. Programs such as Railway and Industrial Corridors, Smart City initiatives, Digital Connectivity via Bharat Net etc are beginning to take shape; the Government''s initiative in the Power Sector with the UDAY program is gaining acceptance; the push towards generating clean energy is starting to yield results. It is expected that some of these projects would reach the execution stage in the coming year and that would be positive to your Company''s position in product lines such as Electrical Cables for various applications, as well as Optical Fiber Cables.

Income for the year under review was higher at Rs. 25,251.8 million (previous year Rs. 25,075.6 million) representing a growth of 1% over the previous year. Your Company has recorded a Net Profit before Tax of Rs. 3,363.8 million as against Rs. 2,631.5 million in the previous year - a growth of 28%.

Highlights of the performance are discussed in detail in the Management Discussion and Analysis Report (MDAR) attached as Annexure A to this Report.

EXPORTS: Due to the depressed market situation, overseas FOB value of exports for the year was Rs. 416.5 million (Previous year''s export value of Rs. 539.5 million).

FINANCE

Your Company''s short term debt programs continue to enjoy the highest ratings from CRISIL. Since the last few years, these have been accorded the A1 rating. Your Company retained the AA /stable rating for its Rs.500 million long term non-convertible debentures program as well as on the long term loans currently outstanding.

During the 3rd quarter of the year, your Company redeemed its outstanding non-convertible debentures of Rs 500 million. Post this redemption, only a small portion of one long term loan remains outstanding.

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

FIXED DEPOSITS

Your Company has stopped accepting deposits from the year 2003 and accordingly, no fixed deposits have been accepted during the year under review.

DIVIDEND

Considering the business situation, your Directors have pleasure in recommending a dividend on equity shares of 125%. The amount thereof per equity share will be Rs 2.50. The total dividend outgo (including dividend tax) will be Rs.460.2 million. Included in the above recommendation is a special dividend of 25% (Rs 0.50 per share) as homage to late Shri. P. P. Chhabria, Founder Promoter of your Company.

Payment of Dividend is subject to the approval of the members at the ensuing Annual General Meeting.

EXPANSION & NEW PRODUCTS

As mentioned in our previous report, the switchgear facility in Roorkee has been awaiting approval from BIS prior to market release. This is now expected in the coming months and the product launch is now planned for Q2, 2016-17.

Your Company announced in Q2, 2015-16 that it was entering the Fan segment - members will be pleased to know that a completely new range of fans, specially designed for your Company, has been introduced in the market in May 2016. While the current introduction targets all price segments, it is the intention of your Company to constantly innovate and bring new and meaningful designs to the market from time to time. These new products are expected to open up a new growth area for your Company as well as take it on the path of being an Electrical Products and Solutions Company eventually.

Anticipating and catering to market demand has been a hallmark of your Company - in this connection, capacity additions were made in several product lines - LAN/Coaxial/specialty cables for security applications all currently operate at increased capacities and are poised to capture market growth in these areas.

In the pipeline for 2016-17 are new products from the Lighting/Lamp business, electrical cables for solar and automobile applications and an entirely new range of switches etc.

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 Company''s Joint Ventures / Associates (in form AOC-1) is attached to this Report as Annexure I.

Finolex J-Power Systems Private Limited

With the government''s emphasis on improving investments in the infrastructure sector beginning with Roads, Ports and Railways, followed by Energy sector, it is expected that more tenders would be floated and hence the JV expects to participate and see a favorable order book.

The year has been very positive for company in terms of market penetration, improved reach and attaining visibility by relationship building with the customer base and the same is reflected in terms of the JV''s ability to participate in company tenders. Tender participation and enquiry register has grown six fold. The challenge remains in terms of meeting pre-qualification requirements and on the export front where overseas third party certifications are mandated. Because of several representations made by the JV, it has been successful in persuading various State and Central Government utilities & Public Sector undertakings to accept credentials of the JV partners; it has been successful in participating in majority of tenders. While the level of tender participation has improved, the tender conclusion process is still very slow and the JV is awaiting the results in most tenders that it has participated in.

Thus, it is estimated that the JV will still take some time before it becomes profitable and will need financial support in the form of equity infusion until then. While the long term outlook of the JV is positive, in the short term, there is an erosion of net worth in the JV. Taking a prudent view of the same, an amount of Rs. 194.5 million has been recognized as a diminution in the value of investment. During the year, your Company injected equity of Rs. 232.8 million, taking the Company''s participation up to Rs. 982.5 million at the end of FY 2015-16.

Corning Finolex Optical Fibre Private Limited

During the year, the JV realized revenues of Rs. 1,596.6 million against Rs. 1,581.3 million in the previous year. Profitability, however, is yet to improve and the JV is currently at break-even levels. With consumer demand increasing for mobile data services and e commerce, it is hoped that the fiber penetration in India will improve. Further, Government initiatives such as Bharat Net and Digital India are expected to add buoyancy to demand. Demand for better quality and feature rich products is on the increase and the JV expects to capitalize on the same. Your Company''s participation in the JV''s equity at the end of FY 2015-16 remains at Rs 17.5 million.

EMPLOYEES

Your Company recognizes the importance of a motivated and skilled human resource. Your Company endeavors to create a challenging and favorable work environment that encourages entrepreneurial behavior, innovation and the drive towards business excellence. Several skilled based training programs were conducted during the year with the help of external consultants, especially for the staff in Sales and Marketing functions. Your Company is also in the process of revamping its hiring and appraisal processes in line with benchmarked practices in industry.

Industrial relations continued to be cordial during the year.

The Company had 1,694 permanent employees on its rolls as on 31st March, 2016 (previous year 1,531 permanent employees as on 31st March, 2015).

Particulars of employees and related disclosures:

In terms of provisions of Section 197(12) of Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure E to this Report.

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.

KEY MANAGERIAL PERSONNEL

The following persons continued as Key Managerial Personnel during the year 2015-16:

Name Title

Mr. D K Chhabria Executive Chairman

Mr. Mahesh Viswanathan Executive Director & CFO

Mr. R G D''Silva Company Secretary & President (Legal)

CORPORATE GOVERNANCE

Your Company is in full compliance with the Corporate Governance guidelines as set out in Clause 49 of the Listing Agreement and is committed to good corporate governance laying a strong emphasis on transparency, accountability and integrity. All Directors and Senior Management employees have confirmed in writing their adherence to the Company''s Code of Conduct.

A separate report on Corporate Governance (Annexure B) is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance with conditions of Corporate Governance as Annexure C, as mandated under Clause 49 of the Listing Agreement. There is no qualification, reservation or adverse remark or disclaimer made by the auditor in his report. A Certificate of the Chief Executive Officer and Chief Financial Officer of the Company in terms of Clause 49 (IX) of the Listing Agreement, 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 (''CSR'')

As in the past, your Company continues to serve the community around it. Members will recall that during the previous year, your Company had approved an expenditure of Rs. 30.0 million towards construction of an additional building in an engineering college supported by the Company. While this amount was approved in 2014-15, the actual spend was to happen in 2015-16 - we are pleased to state that this project has been successfully completed and the college now boasts of an excellent building with state of art class rooms. Keeping in mind the projected growth in student population in the college, your Company in 2015-16 sanctioned a further sum of Rs. 30.0 million from its CSR funds for the construction of an additional block - the cash flow on this project will happen in 2016-17.

The annual report on CSR activities of the Company for the year under review is set out in Annexure J forming part of this report.

DIRECTORS

Mr. P.P. Chhabria, founder promoter of your Company, breathed his last on 5th May 2016 after a brief illness. He had been the guiding factor, in the growth of your Company right from its formative years all the way through the present time. He believed that "Each morning we are born again to work hard and live another beautiful journey". His pioneering effort, dedication to promoting and marketing a quality product, ability to connect with customers and other stakeholders, encouragement that he provided to employees are qualities that have helped your Company immensely during the period of his association. His presence will be missed, but it would be endeavor of the Board to ensure that his values are continued. Your Directors wish to place on record his valuable contribution to the Company.

In accordance with the provisions of the Companies Act, 2013 and relevant Rules framed there under and the Articles of Association of the Company, Mrs. Namita Vikas Thapar [DIN: 05318899] retires by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for re-appointment. The Board recommends her re-appointment as Woman Director on the Board of Directors of the Company.

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:

1. Extract of Annual Return: An extract of the Annual Return in Form MGT9 as on March 31, 2016 is enclosed as Annexure D to this Report.

2. Number of meetings of the Board: The Board met on 4 occasions during the year. Details of the meetings are furnished in the Report on Corporate Governance which is attached as Annexure B to this Report.

3. 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:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

(b) 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;

(c) The Directors had taken proper and sufficient 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;

(d) The Directors had prepared the annual accounts on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

4. 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.

5. Board Evaluation: Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, independent directors at their meeting dated 10th February 2016, without the participation of the non-independent directors and Management, considered and evaluated the Board''s performance, performance of the Chairman and other non-independent directors. The evaluation was performed taking into consideration the various aspects of the Board''s 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.

6. Particulars Of Loans, Guarantees Or Investments Under Section 186 Of The Companies Act, 2013: During the year, an investment of Rs. 232.8 million was made in the equity of the Company''s Joint Venture - M/s Finolex J-Power Systems Pvt. Limited.

7. 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 arm''s 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 members. In respect of transactions of a repetitive nature, an omnibus approval was obtained from the Audit Committee and Members where necessary. At every 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 36 to the financial statements. Details of the same are also reproduced in Form AOC 2 which is attached as Annexure F to this Report. The Company''s Policy on transactions with related parties as approved by the Board is also available on the website of the Company at www.finolex.com.

8. Material Changes And Commitments Affecting The Financial Position Of The Company Which Have Occurred Between March 31, 2016 And May 26, 2016 (Date Of This Report):There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (March 31, 2016) and date of this Report (May 26, 2016)

9. Significant And Material Orders Passed By The Regulators Or Courts 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 and the Company''s operations in the future.

10. 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 our 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.

At the entity level, it has been decided that the Company''s internal control mechanism would follow the COSO framework. At individual business levels, the existing controls are being strengthened by the adoption of an electronic tool which will provide for review, monitoring and reporting of the various control mechanism both at a location and functional level prior to being periodically certified by its robustness by the Management.

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.

11. Risk Management Policy: Your Company has set up a Risk Management Committee of the Board of Directors which comprises Dr. H S Vachha, Mr. Sanjay Asher, Mr. D K Chhabria and Mr. Mahesh Viswanathan. More details of the risks faced by the Company are available in the Management Discussion & Analysis Report which, pursuant to Clause 49 (VIII) (D) of the Listing Agreement, is attached as Annexure A to this Report.

12. 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 Clause 49 of the Listing Agreement, 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 Company''s website.

13. Prevention Of Sexual Harassment Policy:

The Company has in place a policy on prevention of sexual harassment policy 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 by the Company relating to sexual harassment.

AUDITORS

M/S B. K. Khare & Company, Chartered Accountants (Firm Registration Number: 105102W), Auditors of your Company, hold office until conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Further as required under the provisions of Section 139 and Section 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014, M/S B. K. Khare & Company have confirmed their consent as well as eligibility to act as Auditor of the Company.

The Audit Committee and the Board of Directors have recommended the appointment of the Auditors for the financial year 2016-17. Necessary resolution is being placed before the Members for approval.

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. In respect of the financial year 2015-16, at the previous AGM, members had approved of the appointment of M/S. Joshi Apte & Associates as Cost Auditor at a remuneration of Rs. 4.5 lakhs plus service tax, 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 was filed for the financial year 2014-15 was filed prior to its due date in September 2015.

SECRETARIAL AUDIT

In accordance with the provisions of Section 204 of the Companies Act, 2013, and the rules made there under, M/S. S.V. Deulkar & Co., a firm of Company Secretaries in practice was appointed to conduct the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark or disclaimer made by them.

Their Report is attached as Annexure G to this Report.

LISTING OF SECURITIES

Your Company''s equity shares are listed on the two premier stock exchanges of the country namely Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company''s non-convertible debentures are listed on wholesale debt market segment of the National Stock Exchange of India Limited.

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 I.

PARTICULARS OF EMPLOYEES

Information as required under the provisions of the Companies Act, 2013 (the "Act") read with Rule 5 sub rules (2 and 3) of Companies (Appointment and Remuneration of Managerial Personnel) 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.

CAUTIONARY STATEMENT

Statements in this Directors'' Report and Annexure 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 Company''s operations and would impact eventual results.

ACKNOWLEDGEMENTS

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 is 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

Pune D.K. Chhabria

Dated: 26th May 2016 Executive Chairman


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty- Fourth Directors' Report of your Company along with the financial statements for the financial year ended 31st March, 2015.

1. OPERATING RESULTS

Certain key aspects of your Company's performance during the financial year ended 31st March, 2015, as compared to the previous financial year are summarised below:

(Rs. in Lacs)

Particulars Standalone

Year Ended Year Ended

31.03.2015 31.03.2014

Income for the year 20,144.23 16,665.00

Profit before Interest, Depreciation 7,799.21 9,259.72 and Tax

Finance Charges (1,635.50) (1,337.32)

Profit before Depreciation and Taxes 6,163.71 7,922.40

Depreciation & Amortisation (1,190.13) (545.48)

Provisions for Taxation/ Deferred Tax (2,110.51) (1,278.47)

Prior Period Items / Exceptional Items 326.66 114.92

Minority Interest & Profit from Associate - - Company

Net Profit for the Current Year 3,189.73 6,213.37

Earlier Years Balance Brought forward 16,140.41 11,122.01

Net Profit available for Appropriation 19,330.14 17,335.38

Appropriation:

Proposed Dividend on Equity Shares (230.66) (568.94)

Dividend Distribution Tax 0.87 (4.69)

Dividend on Equity Shares (5.49) -

Additional Depreciation (1.43) -

Transfer to General Reserves - (621.34)

Due to Merger Effect - -

Amount Transfer to Minority - -

Balance carried to Balance Sheet 19,093.43 16,140.41

(Rs. in Lacs)

Particulars Consolidated

Year Ended Year Ended

31.03.2015 31.03.2014

Income for the year 30,739.61 58,979.56

Profit before Interest, Depreciation 7,395.46 18,129.01 and Tax

Finance Charges (5,130.27) (3,342.94)

Profit before Depreciation and Taxes 2,265.19 14,786.07

Depreciation & Amortisation (3,468.80) (1,655.83)

Provisions for Taxation/ Deferred Tax (1,082.92) (5,202.08)

Prior Period Items / Exceptional Items (487.59) (1,426.27)

Minority Interest & Profit from Associate 496.97 (2,970.67) Company

Net Profit for the Current Year (2,277.14) 3,531.22

Earlier Years Balance Brought forward 17,670.05 18,197.94

Net Profit available for Appropriation 15,392.91 21,729.16

Appropriation:

Proposed Dividend on Equity Shares (230.66) (568.94)

Dividend Distribution Tax 0.87 (4.69)

Dividend on Equity Shares (5.49) -

Additional Depreciation 14.09 -

Transfer to General Reserves - (621.34)

Due to Merger Effect - (3,475.73)

Amount Transfer to Minority (741.01) 611.59

Balance carried to Balance Sheet 14,430.71 17,670.05

2. DIVIDEND:

Your Directors recommend for approval of the Members at the ensuing Annual General Meeting, a dividend of Rs. 0.10/- per Equity Share (10%) of Rs. 1/- each, for the financial year ended 31st March, 2015 (previous year Rs. 0.25/- per Equity Share of nominal value of Rs. 1/- each). The dividend will be paid in compliance with the applicable rules and regulations.

3. SHARE CAPITAL

During the year, the Company has issued and allotted 30,87,600 Equity Shares of the Company to eligible employees on exercise of options granted under Employee Stock Option Scheme. Consequently, the issued, subscribed and paid-up capital of the Company has increased from 22,75,76,504 Equity Shares of Rs. 1/- each to 23,06,64,104 Equity Shares of Rs. 1 /- each.

4. OVERVIEW OF OPERATIONS:

During the year under review, your Company recorded a total income of Rs. 30,739.61 Lacs (Consolidated) and Net Loss of Rs. 2,277.14 Lacs (Consolidated). For further information, kindly refer to Management Discussion and Analysis Report, forming a part of this Annual Report.

5. EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014, is appended as Annexure I to this Annual Report.

6. NUMBER OF MEETINGS OF THE BOARD

The Board met four times in financial year 2014-15 viz., on 28th May, 2014, 28th July, 2014, 16th October, 2014 and 26th January, 2015.

7. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors hereby confirm that:

i. In the preparation of the annual accounts for financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. 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 31st March, 2015 and of the profit of the Company for that period.

iii. The Directors have 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.

iv. The Directors have prepared the annual accounts for financial year ended 31st March, 2015 on a 'going concern' basis.

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently.

vi. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

8. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted the declaration of Independence as required under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of Companies Act, 2013, is appended as Annexure II to this Annual Report.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2014-15, your Company has entered into transactions with related parties as defined under section 2(76) of the Companies Act, 2013 read with the Companies (Specification and Definitions Details), Rules, 2014 in accordance with the provisions of the Companies Act, 2013 and Rules made thereunder and Clause 49 of the Listing Agreement. During the financial year 2014-15, transactions with related parties which qualify as material transactions under the Listing Agreement are given in Form AOC - 2 of the Companies (Accounts) Rules, 2014 in Annexure III to this Annual Report.

The details of related party transactions as required under Accounting Standard-18 are set out in notes to accounts to the Standalone Financial Statements forming part of this Annual Report.

Policy on related party transactions is available on Company's website and same may be accessed on the Company's website at the link: http://www.deltacorp.in/pdf/related-partv-transaction-policv.pdf.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report.

13. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is given in Annexure IV to this Annual Report.

14. BUSINESS RISK MANAGEMENT

Pursuant to Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee (RMC). The Committee comprises of Mr. Ashish Kapadia, Mr. Rajesh Jaggi and Dr. Vrajesh Udani. Terms of reference of Risk Management Committee are as follows:

1. To lay down a framework for identification, measurement, analysis, evaluation, prioritization, mitigation & reporting of various risks in line with the Risk Management Policy of the Company.

2. To review the strategies, policies, frameworks, models and procedures that lead to the identification, measurement, reporting and mitigation of various risks.

3. To implement risk mitigation plans in the interest of the Company

4. To help the Board define the risk appetite of the organization and to ensure that the risk is not higher than the risk appetite determined by the Board.

5. To safeguard Company's properties, interests, and interest of all stakeholders.

6. To evolve the culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects, which the business and operations of the Company are exposed to.

7. To optimize a balance between the cost of managing risk and the anticipated benefits.

8. To monitor the effectiveness of risk management functions throughout the organization. Ensure that infrastructure, resources and systems are in place for risk management and are adequate to maintain a satisfactory level of risk management discipline.

9. To create awareness among the employees to assess risks on a continuous basis and to ensure that risk awareness culture is pervasive throughout the organization.

10. To review issues raised by Internal Audit that impact the risk management framework.

11. To review and approve risk disclosure statements.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage.

The business risk framework defines the risk identification and its management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risks trend, exposure and potential impact analysis on a Company's business.

15. CORPORATE SOCIAL RESPONSIBILITY

The Board has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Companies Act, 2013. The details required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in CSR Report appended as Annexure V to this Annual Report.

16. VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy for Directors and Employees to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. The said policy is posted on the Company's website www.deltacorp.in

17. ANNUAL EVALUATION OF PEFORMANCE OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination, Remuneration and Compensation Committee has defined the evaluation criteria for the Board, its Committees and Directors.

The Board's functioning was evaluated on various aspects, including inter alia degree of fulfilment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination, Remuneration and Compensation Committee also reviewed the performance of the Board, its Committees and of the Directors.

18. SUBSIDIARY COMPANIES

The Company as on 31st March, 2015, has 12 direct subsidiaries, 8 step down subsidiaries, 1 joint venture and 1 associate company. During the year under review Delta Holdings (USA) Inc. ceased to be a subsidiary of the Company. No company has become/ceased to be a joint venture or associate during the financial year 2014-15.

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. A report on the performance and financial position of each of the subsidiaries, associate and joint venture company as per the Companies Act, 2013 is provided in the financial statement and hence not repeated here for the sake of brevity.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on Company's website www.deltacorp.in. These documents will also be available for inspection during working hours at our Registered Office of the Company.

Further, the Company has 1 material non-listed Indian subsidiary as defined under Clause 49 of the Listing Agreement, viz. an unlisted subsidiary incorporated in India, whose income or net worth (i.e. paid-up capital and free reserves) exceeds 20% of the consolidated income or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year.

The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link: http://www.deltacorp.in/pdf/policy-for-determining-material- subsidiaries.pdf.

19. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

During the year under review, the Company has not accepted any deposit from the public.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

21. INTERNAL CONTROL SYSTEM

The Company has an internal financial control system commensurate with the size and scale of its operations and the same has been operating effectively. The Internal Auditor evaluates the efficacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Company's policies, safeguarding of Company's assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Section 152(6)(e) of the Companies Act, 2013, Mr. Ashish Kapadia (DIN: 02011632), Managing Director of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Board of Directors of the Company vide circular resolution dated 10th March, 2015 have appointed Dr. Vrajesh Udani (DIN: 00021311) as an Additional Director designated as Independent Director of the Company in accordance with the provisions of Section 161 of the Companies Act, 2013 and Rules made thereunder. He holds the office as an Additional Director upto the date of the ensuing Annual General Meeting of the Company. The Company has received a notice from a member, proposing his appointment at the ensuing Annual General Meeting, as an Independent Director of the Company, in accordance with provisions of Section 149 and any other applicable provisions of the Companies Act, 2013 and the Rules made thereunder, read with Schedule IV of the Companies Act, 2013.

Mr. Ashish Kapadia, Managing Director (DIN: 02011632), and Mr. Hitesh Kanani, Company Secretary of the Company are the Key Managerial Personnel as per the provisions Section 203 of the Companies Act, 2013 and Rules made thereunder and were already in office before the commencement of the Companies Act, 2013. Further, during the year pursuant to provisions Section 203 of the Companies Act, 2013 and Rules made thereunder, Mr. Hardik Dhebar was appointed as Key Managerial Personnel of the Company, designated as Chief Financial Officer of the Company w.e.f 28th July, 2014.

Mr. Mahesh Gupta (DIN: 00046810), Mr. Rajeev Piramal (DIN: 00044983) and Mr. Prakash Chabria (DIN: 00016017) resigned as Directors of the Company w.e.f. 10th September, 2014, 26th September, 2014 and 15th December, 2014 respectively. The Board places on record its appreciation for the valuable services and guidance given by Mr. Mahesh Gupta, Mr. Rajeev Piramal and Mr. Prakash Chhabria to the Company during their tenure as Directors of the Company.

23. AUDITORS

1. Statutory Auditor

The Board of Directors recommends to re-appoint M/s. Haribhakti & Co. LLP, Chartered Accountants, and M/s. Amit Desai & Co., Chartered Accountants who were appointed as Joint Statutory Auditors of the Company at last Annual General Meeting. M/s. Haribhakti & Co. LLP, Chartered Accountants, hold office from the conclusion of 23rd Annual General Meeting till the conclusion of 28th Annual General Meeting and M/s. Amit Desai & Co; Chartered Accountants, hold office from the conclusion of 23rd Annual General Meeting till the conclusion of 26th Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting. The Board of Directors of the Company at its meeting held on 17th April, 2015 recommended to members of the Company ratification of appointment of M/s. Haribhakti & Co. LLP Chartered Accountants, and M/s. Amit Desai & Co., Chartered Accountants as the Joint Statutory Auditors of the Company for financial year 2015-2016.

Your Company has received a letter from M/s. Haribhakti & Co. LLP and M/s. Amit Desai & Co. to the effect that their re-appointment, if made, would be under the second and third proviso to Section 139 (1) of the Companies Act, 2013 and that they are not disqualified within the meaning of Section 141 of the Companies Act, 2013 read with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014.

2. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. A. K. Jain & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure VI to this Annual Report.

Information on Statutory & Secretarial Auditors Qualification and Emphasis of Matter.

Qualification

i) With regard to Statutory Auditor's qualification in respect to search and seizure, members are requested to note that the said search and seizure was carried out u/s 132 of the Income Tax Act, 1961 (the Act) by the Income Tax Authorities on 29th April 2014 on the Company and its Subsidiaries. Consequently, the Company & its Subsidiaries have disclosed a sum of Rs.1694.02 Lacs (Standalone -Rs. 351.36 Lacs) for earlier years. As such disclosed amount for earlier years does not affect the accumulated profits of the Company as on 1st April 2014, only such tax and interest of Rs. 394.29 Lacs (Standalone - Tax Rs. 117.69 Lacs and interest Rs. Nil) have been accounted for, which eventually gets adjusted towards the carry forward losses, of certain respective entities. Hence, the net payment of income tax and interest thereon after adjustment of such losses aggregates to Rs. 276.60 Lacs (Standalone - Rs. Nil). Such disclosed amount is subject to final acceptance by the tax authorities u/s 143(3)/153A of the Act. However, the Company & its Subsidiaries does not expect any further liability on this account under the Act, as well as under any other Act, if any.

ii) With regard to Statutory and Secretarial Auditor's Qualification in respect of an overseas subsidiary & its components, members of the Company are requested to note that due to the differences with its local management, the Company is unable to obtain the financial statements / relevant information of such subsidiary & its components. The Company is in the process of resolving the differences. On account of non- receipt of the financial statements / relevant information, the Company consolidated these entities based on the financial position as on 30th September, 2013. The resulting impact of this if any, is not quantifiable.

Emphasis of Matter

(i) With regard to Statutory Auditor's observation with respect to utilization of MAT Credit Entitlement, members are requested to note that based on business projections management is of the opinion that MAT credit entitlement will be absorbed.

24. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the Management Discussion & Analysis Report and Corporate Governance Report together with Certificate from Practicing Company Secretary, on compliance with the conditions of Corporate Governance as laid down, forms a part of this Annual Report.

25. AUDIT COMMITTEE OF THE COMPANY

The Company's Audit Committee comprises the following Directors:

1. Mr. Ravinder Kumar Jain (Chairman);

2. Mr. Ashish Kapadia;

3. Mr. Rajesh Jaggi;

4. Mrs. Alpana Piramal Chinai

The composition of the Audit Committee is in compliance with the requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

26. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules and 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 Annexure VII to this Annual Report.

27. EMPLOYEES STOCK OPTION SCHEME

As required in terms of the Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Clause 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and in terms of Rule 12 of Companies (Share Capital and Debentures) Rules, 2014, the disclosure relating to DELTA CORP ESOS 2009 is given in Annexure VIII to this Annual Report.

28. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation received from shareholders, bankers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.

For and on behalf of the Board of Directors

Jaydev Mody Chairman

Mumbai, 16th July, 2015

Registered Office:

10, Kumar Place, 2408, General Thimayya Road, Pune - 411 001, Maharashtra. CIN :L65493PN1990PLC058817 Email ID : secretarial@deltin.com Website : www.deltacorp.in Tel. No. : 91-22-40794700 Fax No. : 91-22-40794777




Mar 31, 2014

Dear members,

The Directors are pleased to present their 46th Annual Report and Audited Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS:

(Rs. in million)

2014 2013

Income 24,073.9 22,948.5

Profit Before Interest, Depreciation, Exceptional Items and Tax 2,954.6 2,529.1

Less : Interest 134.0 124.6

Less : Depreciation 484.3 466.3

Profit Before Exceptional Items and Tax 2,336.3 1,938.2

Less : Exceptional Items (Loss) / Gain 103.8 (230.1)

Profit Before Tax 2,440.1 1,708.1

Less : Provision for Taxation

(a) Current Tax 578.3 333.9

(b) Deferred Tax (49.5) 18.6

(c) MAT Credit (166.5) (108.1)

(d) Taxes of Earlier Year 1.0 11.0

Profit After Tax 2,076.8 1,452.7

BACKGROUND

Economic growth over the past couple of years has been muted - much will depend on the new government in terms of raising optimism with their approach to various policy issues. Growth estimates have been pruned from the earlier levels of 9% to between 5-6%. Investments which drove growth until 2008/9 have slowed down sharply. Domestic savings have declined while government deficits have ballooned. Inflation has been ruling high for well over two years now leading to a period of relatively high interest rates and its negative impact on the economy; the reigning in of the current account deficit has been one of the few positives for the year.

The depreciation in currency has resulted in an improvement in our competitiveness and should help improve exports in the coming months while at the same time compel industry to look for greater indigenization and import substitution. It is expected that inflation would moderate over the remaining part of 2014 and would pave way for some monetary easing. Recent clearance by the government of several projects that were held up for various reasons over the past couple of years also holds out hope for an improvement in business sentiments that could result in a turnaround to the investment cycles. However, there is a general expectation that the ongoing general elections will bring about a stable government and along with that there are renewed hopes of a strong and improved economic situation.

OPERATIONS

In terms of revenue, the year under review saw only a marginal growth over the previous year. Overall sales grew by 4% in value terms when compared to 2012-13. In volume terms the growth was higher. Higher volumes were achieved in Communication Cable and Copper segments as well as in the Lighting Business. Star performances came in from product offerings to the following customer sectors - agriculture in the Electrical Cables segment and Coaxial and Optic Fibre Cables in the Communication Cable segment. During the year under review both the Auto and Infrastructure (Power) sectors were under strain.

In terms of outlook for the upcoming year, sales of Optical Fiber Cables looks promising with the government firmly committed to achieving the targets set under the National Optic Fiber Network program as also the Defence Network. Similarly with the government clearing several major infrastructure projects recently, and more states opting for the Financial Restructuring Program, it is expected that the Power Sector would attract investments in cabling in the not too distant future.

Income for the year under review was higher at Rs.24,073.9 million (previous year Rs.22,948.5 million) representing a growth of 5% over the previous year. Your Company has recorded a Net Profit after Tax of Rs. 2,076.8 million as against a Net Profit of Rs.1,452.7 million in the previous year. The improved profitability comes from a better product mix, growth in sales volumes across the product lines mentioned above and tight monitoring of working capital requirement.

DIVIDEND

Considering the business situation, your Directors have pleasure in recommending a dividend on equity shares of 80%.The amount thereof per equity share will be Rs. 1.60. The total dividend outgo (including dividend tax) will be Rs.286.3 million.

EXPANSION, CONSOLIDATION & NEW PRODUCTS

Consolidation of the Pune manufacturing operations at Urse has been largely completed with only skeletal activity remaining at Pimpri. This has helped further improve the cost competitiveness in the Low Duty Electrical Cables offered by Your Company.

The planned 5MW solar power plant at Urse is now operational - the plant went live in March 2014 and the power generated will be entirely consumed within the Urse site leading to cost efficiencies.

The Roorkee facility expansion is now complete and the enhanced capacity will be available for market requirements effective 2014-15. This should greatly enhance product availability as well as ensure better reach to the markets in Northern and Eastern India.

Expansion of the Optic Fiber Cable manufacturing capacity at the Goa unit was completed during the year. An additional line is currently under commissioning at the Urse unit as well. These additions would serve the Company well in being able to meet its obligations under the NOFN order as well as any additional demand from the market.

As announced last year, your Company intends to enter the switchgear market. Product launch is expected during the 3rd quarter of 2014-15 - these products will be manufactured at the Roorkee site and equipment necessary has been ordered and is expected towards end May/early June.

Your Company launched a series of LED based lamps during the year under review. Market acceptance has been very encouraging and more varieties are being considered for a launch in the upcoming year. Together with the CFL based lamps, it is envisaged that Lighting products would bring substantial value to the Company.

JOINT VENTURES

Finolex J-Power Systems Limited, Shirval near Pune

Two major orders worth Rs 500 million were executed by the JV during the year. As members would be aware, the Power Sector in our country has been going through uncertain times as evidenced by difficulties in fuel sourcing as well as the tight financial position of most power utilities. Given this scenario, capital investment in the sector has been minimal during the year. Moreover the stringent pre- qualification conditions imposed by utilities have also been a dampening factor in order acquisition by the JV. It is estimated that the JV will become profitable only around 2016 and will need financial support in the form of equity infusion until then. While the long term outlook of the JV is positive, in the short term there is an erosion of net worth in the JV. Taking a prudent view of the same, an amount of Rs 73.7 million has been recognized as a diminution in the value of investment.

During the year, your Company injected equity of Rs. 147.0 million, taking the Company''s participation up to Rs. 627.2 million at the end of 2013-14.

Corning Finolex Optical Fibre Private Limited

Business operations which commenced during the last quarter of 2012-13, have picked up during the year under review. The JV clocked a turnover of Rs. 1,000 million during 2013-14 and is expected to do well in the coming years as well. During the year, the equity in the JV was enhanced to Rs. 35 million and your Company''s participation at the end of 2013-14 stands at Rs 17.5 million.

EXPORTS

Despite the depressed market situation overseas FOB value of exports for the year was Rs 494.4 million (Previous year''s export value of Rs. 486.9 million).

FINANCE

Your Company''s short term debt programs continue to enjoy the highest ratings from CRISIL. Since the last few years these have been accorded the A1 rating. The Company regained the AA /Stable rating for its Rs.500 million long term non convertible debentures program as well as on the long term loans currently outstanding. This upgradation by CRISIL reflects the strong financial risk management policies followed by your Company.

Despite the increase in value of operations, financial costs have been contained to the minimum required levels. The Company continues to meet all its financial commitments in a timely manner.

FIXED DEPOSITS

Your Company has stopped accepting deposits from 2003 and accordingly, no fixed deposits have been accepted during the year under review.

EMPLOYEES

Your Company recognizes the importance of a motivated and skilled human resource. Your Company endeavors to create a challenging and favorable work environment that encourages entrepreneurial behavior, innovation and the drive towards business excellence.

Industrial relations continued to be cordial during the year.

The Company had 1,546 permanent employees on its roll as on 31st March, 2014 (previous year 1,611 permanent employees as on 31st March, 2013).

CORPORATE GOVERNANCE

The statement on Corporate Governance is annexed hereto and forms a part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has and will continue to focus on education. International Institute of Information Technology or I2IT as it is known is also patronized by the Company. I2IT offers BE and post graduate MS courses with various specializations in Advanced Information Technology.

All plants are environment compliant and hold ISO14001 (Environment Management System) certification.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the Statement of Profit and Loss for the year ended 31st March, 2014;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earning and outgo required to be given pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies Rules, 1988 (Disclosure of Particulars in the Report of the Board of Directors) is annexed hereto and forms part of this Report.

PARTICULARS OF EMPLOYEES

Information as required under the provisions of Section 217(2A) of the Companies Act, 1956 (the Act) and the rules framed there under forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders, excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder desirous of obtaining a copy of the said statement may write to the Company Secretary & Vice President (Legal) at the Registered Office of the Company.

LISTING OF SECURITIES

Your Company''s equity shares are listed on the two premier stock exchanges of the country namely Bombay Stock Exchange Limited and National Stock Exchange of India Limited, amongst other stock exchanges. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company''s non-convertible debentures are listed on wholesale debt market segment of the National Stock Exchange of India Limited.

DIRECTORS

Dr. V G Pai retires by rotation at the ensuing Annual General Meeting. Your Directors record their appreciation of the valuable contribution made by Dr. V G Pai during his tenure as a Director of the Company. Mr. Adi J Engineer and Dr. H S Vachha retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment. Mr. Atul C. Choksey, Mr. S. B. (Ravi) Pandit, Mr. Pradeep R Rathi, Mr. Sanjay K. Asher and Mr. Pratap G Pawar are Directors liable to retire by rotation and are eligible for appointment as Directors. The Board of Directors proposes and recommends the appointment of Mr. Adi J Engineer, Dr. H S Vachha, Mr. Atul C. Choksey, Mr. S. B. (Ravi) Pandit, Mr. Pradeep R Rathi, Mr. Sanjay K. Asher and Mr. Pratap G Pawar as Independent Directors on the Board of Directors of the Company, under the provisions of the Companies Act 2013 and Rules framed there under as also under the provisions of revised clause 49 of the Listing Agreement with the Stock Exchanges, as proposed in the resolutions set out at Item Numbers 5 to 11 in the Notice for the ensuing Annual General Meeting of the Company.

AUDITORS

M/S B.K. Khare & Company, Chartered Accountants, Auditors of the Company, hold office until conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

ACKNOWLEDGEMENT

Your Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial Institutions for their continued cooperation and support. Your Directors warmly acknowledge the trust and confidence reposed in the 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 of the Company for their unstinting support. Your Directors value the commitment of the employees towards the Company and appreciate their valuable contributions for the progress and growth of the Company. Last but not the least your Directors are thankful to the Members for extending constant trust and for the confidence shown in the Company.

For and on behalf of the Board of Directors

D. K. Chhabria Executive Chairman

Pune, Dated : 8th May, 2014


Mar 31, 2013

To The Members

The Directors are pleased to present their 45th Annual Report and Audited Accounts for the year ended 31st March, 2013. FINANCIAL RESULTS:

(Rs. in million)

2013 2012

Income 22,948.5 20,961.5

Proft Before Interest, Depreciation, Exceptional Items and Tax 2,529.1 2,102.0

Less : Interest 124.6 251.0

Less : Depreciation 466.3 394.7

Proft Before Exceptional Items and Tax 1,938.2 1,456.3

Less : Exceptional Items 230.1 363.6

Proft Before Tax 1,708.1 1,092.7

Less : Provision for Taxation

(a) Current Tax 333.9 174.3

(b) Deferred Tax 18.6 15.7

(c) MAT Credit (108.1) (79.2)

(d) Taxes of Earlier Year 11.0 - Proft After Tax 1,452.7 981.9



BACKGROUND

Economic recovery that was expected at the beginning of the year under review has not materialized. Global economic growth was lower than in the previous year with all the stars of the past few years (China/India/Other BRIC nations) clocking very moderate growth. Most of the large economies which were affected by the crisis of 2008 were still resorting to quantitative easing in some form or the other, hoping to stimulate investment and economic activity; however clear signs of recovery are still to emerge.

On the domestic front, a few issues continue to defy solutions - infation has been ruling high for well over two years now leading to a period of relatively high interest rates and its negative impact on the economy; GDP growth of 5%,which is far lower than the 6.5% reported in the previous year and way below the 8% average that was achieved in the years leading upto 2010; the high level of government''s fscal defcit at 5.4% continues to trouble the economy; and a continuously depreciating Rupee – from a level of Rs. 50.88 in March, 2012 to the US Dollar, the Rupee in March, 2013 closed at Rs.54.285.

The Government expects the economy to pick up after faltering last year – GDP is expected to grow at around 6.5% in the coming fnancial year; fscal defcit is expected to be contained to under 5% of GDP, and infation is expected to be around 6.5%. However, this will depend on how some elements of the economy play out – such as oil and commodity prices, availability of adequate fnances and the ability of the manufacturing sector to pull itself out of the current situation.

OPERATIONS

Overall sales grew by 10% in value terms in 2012-13 when compared to the previous year. In volume terms the growth was higher at 14%. Higher volumes were achieved in both Electrical as well as Communication Cable segments. Star performances came in from product offerings to the following customer sectors – automotive, agriculture and construction in the Electrical Cables segment and Coaxial and Optic Fibre Cables in the Communication Cable segment. Towards the end of the period under review, however, it was clear that both the Auto and Infrastructure (Power) sectors were under strain. On the other hand recent developments within the Telecom sector viz. announcement of the intention by the Government to create a nationwide Optic Fibre Network to provide connectivity to village panchayats, roll out of 4G services by some Telecom service providers etc will substantially improve growth possibilities in the coming fnancial year. Outlook on orders from this segment looks promising.

Income for the year under review was higher at Rs.22,948.5 million (previous year Rs.20,961.5 million) representing a growth of 10% over the previous year. Your Company has recorded a Net Proft after Tax of Rs.1,452.7 million as against a Net Proft of Rs.981.9 million in the previous year. The improved proftability comes from a better product mix, higher capacity utilization, growth in sales volumes across the product lines mentioned above, tight monitoring of working capital requirement and improved purchasing effciencies.

DIVIDEND

Considering the business situation, your Directors have pleasure in recommending a dividend on equity shares of 60%.The amount thereof per equity share will be Rs.1.20. The total dividend outgo (including dividend tax) will be Rs.213.8 million.

EXPANSION & CONSOLIDATION

Consolidation of the Pune manufacturing operations is underway as planned. Most operations would be consolidated at the Urse site by end 2013, with limited activity remaining at Pimpri. This will help further improve the cost competitiveness in the Low Duty Electrical Cables offered by your Company.

As announced in February 2013, your Company will set up a 5MW solar power plant at its Urse site, which has ample land, a part of which will be used to set up this facility. The facility will cost approximately Rs.400 million to build and it is expected to be operational by January 2014.The power generated will be entirely consumed within the Urse site leading to cost effciencies.

The Roorkee facility expansion is also well under way. Construction of a new factory shed is almost complete and new machinery has started arriving at the site. Commissioning of equipment is expected to be complete by end 2013. The expansion is expected to be within the budget of Rs.1,000 million and will be completed within the timeframe initially set.

In view of the opportunities now visible in the Telecom sector, your Company is investing in additional cable making equipment at the Optical Fibre Cable facility at Goa. Over the next year an investment of around Rs. 500 million is envisaged.

JOINT VENTURES

Finolex J-Power Systems Private Limited, Shirval near Pune

As mentioned in the previous year''s report the JV is now fully operational and has been participating in tenders both locally as well as overseas. Your Directors are happy to report that the JV has secured its frst large order (valued at Rs. 380 million) to supply 132 Kv power cables to the Maharashtra State Electricity Transmission Co. Ltd. Thus far, the JV has supplied cables at the 66Kv and 110Kv range to its customers.

As members will be aware, in respect of the products offered by the JV, pre-qualifcation requirements are very stringent and no effort is being spared in ensuring that the JV obtains all the requisite certifcations. Members will be happy to note that the JV''s 220Kv range of power cables have already passed the Type Test requirements and that the JV has secured certifcation from the Central Power Research Institute (CPRI) – this will enable the JV to bid and compete in these range of cables as well.

Corning Finolex Optical Fibre Private Limited

Business operations commenced during the last quarter of 2012-13. As mentioned earlier, recent announcements by the government augur well for the Telecom sector and it is expected that fber sales will be robust in the current fscal. It is expected that 2013-14 will be a promising year for Optic Fibre business and the JV expects to beneft from the same.

NEW PRODUCTS

Your Company is continuously looking at developing new products to expand its portfolio as well as adapt to changing needs of the market. In the current fscal, your Company has already launched new lamp models including LED based lighting systems meant for home use, street lighting and other commercial spaces. Your Company has also plans of entering the switchgear product segment and will launch a series of products within the MCB, ELCB and MCCB range during 2013-14.

EXPORTS

Despite the depressed market situation overseas FOB value of exports for the year was Rs. 486.9 million (marginally higher than the previous year''s export value of Rs. 483.9 million).

FINANCE

Your Company''s short term debt programs continue to enjoy the highest ratings from CRISIL. Since the last few years these have been accorded the A1 rating. The Company also holds AA/Positive rating for its Rs.500 million long term non convertible debentures program as well as on the long term loans currently outstanding.

The Company follows a balanced policy to manage liquidity and borrowing. To part fnance the ongoing expansion, additional borrowings of Rs. 450 million were resorted to from banks in the year 2012-13.

Despite the increase in value of operations, fnancial costs have been contained to the minimum required levels. The Company continues to meet all its fnancial commitments in a timely manner.

FIXED DEPOSITS

Your Company has stopped accepting deposits from 2003 and accordingly, no fxed deposits have been accepted during the year under review.

EMPLOYEES

Your Company recognizes the importance of a motivated and skilled human resource. Your Company endeavors to create a challenging and favorable work environment that encourages entrepreneurial behavior, innovation and the drive towards business excellence.

Industrial relations continued to be cordial during the year.

The Company had 1,611 permanent employees on its roll as on 31st March, 2013 (previous year 1,487 permanent employees as on 31st March 2012).

CORPORATE GOVERNANCE

The statement on Corporate Governance is annexed hereto and forms a part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has and will continue to focus on education. International Institute of Information Technology or I2IT as it is known is also patronized by the Company. I2IT offers BE and post graduate MS courses with various specializations in Advanced Information Technology.

All plants are environment compliant and hold ISO14001 (Environment Management System) certifcation.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confrm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the Statement of Proft and Loss for the year ended 31st March, 2013;

iii) proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earning and outgo required to be given pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies Rules, 1988 (Disclosure of Particulars in the Report of the Board of Directors) is annexed hereto and forms part of this Report.

PARTICULARS OF EMPLOYEES

Information as required under the provisions of Section 217(2A) of the Companies Act, 1956 (the Act) and the rules framed there under forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders, excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder desirous of obtaining a copy of the said statement may write to the Company Secretary & Vice President (Legal) at the Registered Offce of the Company.

LISTING OF SECURITIES

Your Company''s equity shares are listed on the two premier stock exchanges of the country namely Bombay Stock Exchange Limited and National Stock Exchange of India Limited, amongst other stock exchanges. Your Company had issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. Your Company''s non-convertible debentures are listed on wholesale debt market segment of the National Stock Exchange of India Limited.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr.P.R.Rathi, Mr. S.K.Asher and Mr.P.G.Pawar retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment. The Board of Directors recommends their reappointment as Directors of the Company.

AUDITORS

M/S B.K. Khare & Company, Chartered Accountants, Auditors of the Company, hold offce until conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

ACKNOWLEDGEMENT

Your Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial Institutions for their cooperation and support. Your Directors warmly acknowledge the faith and confdence reposed in the 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 of the Company for their unstinting support. Your Directors value the commitment of the employees towards the Company and appreciate their valuable contributions for the progress and growth of the Company. Last but not the least your Directors are thankful to the Members for extending trust and for the confdence shown.

For and on behalf of the Board of Directors

P. P. Chhabria

Chairman

Pune,

Dated : 30th April, 2013


Mar 31, 2012

The Directors are pleased to present their 44th Annual Report and Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS:

(Rs. in million)

2012 2011

Income 21,003.5 20,618.4

Profit Before Interest, Depreciation, Exceptional Items and Tax 2,102.0 1,983.6

Less : Interest 251.0 179.6

Less : Depreciation 394.7 387.8

Profit Before Exceptional Items and Tax 1,456.3 1,416.2

Less : Exceptional Items 363.6 344.4

Profit Before Tax 1,092.7 1,071.8

Less : Provision for Taxation

(a) Current Tax and Prior year refund adjustment 174.3 212.8

(b) MAT Credit (79.2) -

(c) Deferred Tax 15.7 (8.7)

Add: Excess Provision for dividend tax written back - 0.4

Profit After Tax 981.9 868.1

GENERAL ECONOMY

The global economy saw a lower growth rate in the year under review for the calendar year 2012, global growth was estimated at below 3% compared to the 3.8% and 5.2% clocked in the years 2011 and 2010. While Europe continued to reel under debt pressure, the news from USA has also not been very positive. Most of the Middle East has been experiencing difficulties the past year, resulting in high oil prices oil prices have increased almost 15% in the January/March quarter with consequential effects on inflation. Meanwhile China has moderated its growth prospects for the upcoming years.

On the domestic front, inflation has been ruling high for well over a year now - while the core inflation seems to have cooled down in the last quarter to around 6%, for most of the year inflation averaged at almost 9%. The high interest rate situation had its negative impact on the economy, with most sectors reporting negative or at best a modest growth. Additionally the high level of government's fiscal deficit at 5.9% continues to trouble the economy. Real economic growth has fallen sharply to 6.5% from the previous year's level of 8.5%. Against this backdrop the Rupee has depreciated sharply against the US Dollar - from a level of 44.50 in April 2011 to 50.88 in March 2012 - a depreciation of 14% in one year.

In its recent budget, the government expects the economy to pick up after faltering last year - GDP is expected to grow at over 7% in the coming financial year, fiscal deficit is expected to be contained to less than 5.1% of GDP and inflation is expected to be reined in at under 6.5%. However, this will depend on how some elements of the global economy play out - such as oil and commodity prices, the debt situation in Europe as well as the political situation in the Middle East. Business confidence in the rest of Asia too seems low as China moderates its own growth projections.

OPERATIONS

During 2011-12 your Company saw a very modest growth in the top line with sales registering about 2% growth in value terms. This increase was primarily in the Electrical Cables segment. In volume terms growth was visible again only in the Electrical Cables segment with star performances from product offering to the following customer sectors - automotive, agriculture and construction. In the Communication Cables segment, however, the level of investment in capital expenditure by Telecom service providers was even lower than the previous year resulting in lower sales volumes of Communication Cables. As was indicated in the previous year, the Sheets Division was wound up in the year under review.

Competition, as in the past years, has been keen. Coupled with a year of modest growth and volatile price levels the pressure on margins was continuous. Hence adjustments to the selling prices were kept minimal and to levels that were appropriate.

Income for the year under review was marginally higher at Rs. 21,003.5 million (previous year Rs. 20,618.4 million) representing a growth of 2% over the previous year. Your Company has recorded a Net Profit after Tax of Rs. 981.9 million as against a Net Profit of Rs. 868.1 million in the previous year. Improved capacity utilization, better product mix allocation between the various manufacturing units, growth in sales volumes across the product lines mentioned above, tight monitoring of costs and working capital requirement all have contributed to the improvement in the financials for the year under review.

DIVIDEND

Considering the business situation, your Directors have pleasure in recommending a dividend on equity shares of 40%. The amount thereof per equity share will be Rs.0.80. The total dividend outgo will be Rs.142.2 million (including dividend tax Rs.19.8 million).

EXPANSION & CONSOLIDATION

Looking forward, the Pune manufacturing operations would be consolidated at the Urse site. This will help further improve the cost competitiveness in the Low Duty Electrical Cables offered by your Company. The upgradation of the High Voltage Cable plant has now been completed, resulting in enhanced capacity availability from 2012-13 - this will help in adding to the overall revenues of your Company.

The Roorkee facility will be expanded over the next 18 months at a cost of approximately Rs.1,000 million. This expenditure will double the current capacity at Roorkee and will further help improve profitability in view of the fiscal benefits that will accrue.

JOINT VENTURES

Finolex J-Power Systems Private Limited, Shirval near Pune

As at 31st March 2012, your Company's investment in the JV stands at Rs. 480.2 million. This includes an additional investment of Rs. 98 million made in January 2012 to finance the enhanced capital needs of the JV.

Your Directors are happy to report that the JV commenced its manufacturing operations towards the end of September 2011 and has since been able to supply electrical cables of the 66 KV range. The JV has been active in participating in tenders both locally and overseas with a view to secure business. As is common with products being offered by the JV, pre-qualification requirements are very stringent and no effort is being spared in ensuring that the JV obtains all the requisite certifications.

Corning Finolex Optical Fibre Private Limited

During the year under review, the marketing JV with Corning of USA was established and an investment of Rs. 0.5 million was made. The JV will market Optical Fibre to cable makers within India and it is expected that the JV will commence its operations in the upcoming fiscal.

NEW PRODUCTS

Your Company is continuously developing new products to expand its portfolio as well as adapt to changing needs of the market. For the year under review, your Company launched a new range of "Speaker Wires" in the Communication Cable segment. In the Lighting Division, the latest version of the T5 tube lights and fittings were launched by your Company.

EXPORTS

During the year under review (in November 2011), your Company was awarded the Special Trophy for large enterprise in the product group of Highest Exporter in Thrust Markets for Thrust Products for outstanding contribution to Engineering Exports in the year 2008-09.

Despite the depressed market situation overseas FOB value of exports for the year was Rs. 483.9 million (higher by 22% than the previous year's export value of Rs. 393.7 million).

FINANCE

Your Company's short term debt programs continue to enjoy the highest ratings from CRISIL. Since the last few years these have been accorded the P1 rating. The Company also holds AA/Stable rating for its Rs.500 million long term non convertible debentures program as well as on the long term loans currently outstanding.

In March 2012, the Company repaid an External Commercial Borrowing of JPY 3.5 billion which was originally drawn in 2007. The loan was repaid in full and on time out of internal accruals and without resorting to either a roll over or substitute loans.

The Company follows a balanced policy to manage liquidity and borrowing. Despite the increase in value of operations, owing to tight controls on the working capital cycles, your Company has managed to control financial expenses to the minimum required levels. The Company has been able to meet all its financial commitments in a timely manner.

SUPERBRAND STATUS

Your Company continues to hold the "Consumer Superbrand" status since many years now. The Company is the only Indian cable company to have achieved this enviable distinction.

FIXED DEPOSITS

Your Company neither invites nor accepts deposits from the public or from its members and accordingly no deposits were held by the Company as at 31st March 2012.

EMPLOYEES

Your Company recognizes the importance of a motivated and skilled human resource. Your Company endeavors to create a challenging and favorable work environment that encourages entrepreneurial behavior, innovation and the drive towards business excellence.

Industrial relations continued to be cordial during the year.

The Company had 1,487 permanent employees on its roll as on 31st March, 2012 (previous year 1,484 permanent employees as on 31st March 2011).

CORPORATE GOVERNANCE

The statement on Corporate Governance is annexed hereto and forms a part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

The focus during the year under review continues to be the field of education. International Institute of Information Technology or I2IT as it is known is also patronized by the Company. I2IT offers BE and post graduate MS courses with various specializations in Advanced Information Technology.

The Company discharges its duties as a responsible corporate citizen and accords importance to legal compliances. It also handsomely contributes to the exchequer.

All plants are environment compliant and hold ISO14001 (Environment Management System) certification.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the Statement of Profit and Loss for the year ended 31st March, 2012;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earning and outgo required to be given pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies Rules, 1988 (Disclosure of Particulars in the Report of the Board of Directors) is annexed hereto and forms part of this Report.

PARTICULARS OF EMPLOYEES

Information as required under the provisions of Section 217(2A) of the Companies Act, 1956 (the Act) and the rules framed there under forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders, excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder desirous of obtaining a copy of the said statement may write to the Company Secretary & Vice President (Legal) at the Registered Office of the Company.

LISTING OF SECURITIES

The Company's equity shares are listed on the two premier stock exchanges of the country namely Bombay Stock Exchange Limited and National Stock Exchange of India Limited, amongst other stock exchanges. The Company has issued Global Depository Receipts which are listed on the Luxembourg Stock Exchange. The Company's non-convertible debentures are listed on wholesale debt market segment of the National Stock Exchange of India Limited.

DIRECTORS

Mr. B. G. Deshmukh, a long time Director on your Company's Board, expired on 7th August 2011 after period of illness. Your Directors wish to place on record his valuable contribution to the growth of the Company over his tenure of Directorship.

At its meeting held on 8th November 2011, the Board appointed Dr. Vikas G. Pai as an Additional Director on the Board. He holds office of Additional Director till conclusion of the ensuing Annual General Meeting of the Company. Further at its meeting held on 3rd May 2012, the Board has recommended his reappointment to the shareholders as a Director of the Company which is reflected in the Notice for the said meeting.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Dr. H. S. Vachha, Mr. Atul C. Choksey and Mr. S B (Ravi) Pandit retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment. The Board of Directors recommends their reappointment as Directors of the Company.

AUDITORS

M/s B.K. Khare & Company, Chartered Accountants, Auditors of the Company, hold office until conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

COST AUDITOR

The Board of Directors at its meeting held on 8th February 2011 has appointed M/s. Joshi Apte & Associates, Cost Accountants for carrying out audit of the relevant cost accounting records maintained by the Company. The Central Government has approved the appointment of the said Cost Auditors for conducting cost audit for the financial year 2011-12.

ACKNOWLEDGEMENT

Your Directors are grateful to the Central and State Governments, Statutory Authorities, Local Bodies, Banks and Financial Institutions for their cooperation and support. Your Directors warmly acknowledge the faith and confidence reposed in the 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 of the Company for their unstinting support. Your Directors value the commitment of the employees towards the Company and appreciate their valuable contributions for the progress and growth of the Company. Last but not the least your Directors are thankful to the Members for extending trust and for the confidence shown.

For and on behalf of the Board of Directors

P. P. Chhabria

Chairman

Pune,

Dated : 3rd May, 2012

 
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