No material adjustments are deemed necessary for the quarter and nine months ended December 31, 2023, in this regard, company says
India's largest wire and cable maker announced its quarterly results yesterday, in which it reported double-digit growth in revenue and profit. The analysts and stakeholders were looking forward to the earnings call today, seeking answers on the tax evasion concerns that put Polycab India’s shares under pressure.
Inder Jaisinghani, chairman and managing director of Polycab, addressed the issue in his opening remarks saying, “Last month, the Income Tax Department conducted searches at our plants and offices. We have fully cooperated in their investigation. To date, the company has not received any written communication from the income-tax department regarding the outcome of the search. And our operations are running smoothly.â€
The management, based on available records, believes there is no material adverse impact on the company's financial position. No material adjustments are deemed necessary for the quarter and nine months ended December 31, 2023, in this regard, the company said.
Some analysts raised questions about its corporate governance practices, to which the company responded saying they’ve been quite vigilant about them for many years.
Referring to the allegations made by the IT department against the company around sub-contracting expenses, purchases and transport expenses, and some authorised distributors of the group covered in the search, an analyst asked that Polycab’s internal processes keep these things under check, especially pointing towards distributors and channel financing.
“We are the pioneers as far as channel financing is concerned. We do almost 50 to 80 percent of our business through dealers and distributors, and out of that, more than 90 percent of the business is done through channel financing. We are continuing with the same on ethics and governance. We have been extremely cautious and fully compliant,†Gandharv Tongia, executive director and CFO, Polycab India, said in response.