The Board of Directors of your Company take pleasure in presenting the Eighth AnnualReport together with Balance Sheet and Statement of Profit and Loss for the financial yearended 31st March 2016.
1. Financial Results (Standalone and Consolidated)
(Rupees in Million)
|Particulars ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Revenue from Operations ||7007.44 ||6253.23 ||7213.31 ||6408.24 |
|Profit Before Depreciation and Tax ||346.59 ||341.09 ||391.77 ||348.96 |
|Less: Depreciation for the year ||14.68 ||17.02 ||16.81 ||17.89 |
|Profit Before Tax (PBT) ||331.91 ||324.07 ||374.96 ||331.07 |
|Less: Provision for Tax || || || || |
|a) Current Tax ||135.72 ||133.26 ||148.48 ||139.88 |
|b) Deferred Tax ||(18.80) ||(22.48) ||(17.27) ||(27.39) |
|Profit After Tax ||214.99 ||213.29 ||243.75 ||218.58 |
|Balance b/f from previous year ||837.31 ||679.55 ||842.60 ||679.55 |
|Adjustments to fixed assets ||0.00 ||0.62 ||0.00 ||0.62 |
|Amount available for Appropriation ||1052.30 ||892.22 ||1086.35 ||897.51 |
|Transfer to General Reserve ||25.00 ||25.00 ||25.00 ||25.00 |
|Proposed Dividend ||24.85 ||24.85 ||24.85 ||24.85 |
|Tax on Dividend ||5.06 ||5.06 ||5.06 ||5.06 |
|Balance carried forward to Balance Sheet ||997.39 ||837.31 ||1031.44 ||842.60 |
|Earnings per Share (Rs.) ||6.06 ||6.16 ||6.87 ||6.31 |
2. State of Companys Affairs
During the financial year 2015-16 your company achieved high performance both interms of turnover and profits. The standalone gross revenue increased by 12% Rs. 7007.44million as compared to Rs. 6253.23 million in the previous year. The standalone profitbefore tax stood at Rs. 331.91 million as compared to Rs. 324.07 million in the previousyear.
During the year under review the Company has undertaken the manufacturing of set-topboxes and its allied products for Indian market.
The consolidated financial statements of your Company for the financial year 2015-16are prepared in compliance with applicable provisions of the Companies Act 2013Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as prescribed by the Securities and Exchange Board of India (SEBI). Theaudited consolidated financial statement is provided in the Annual Report.
The financial statements of subsidiary TeamF1 Networks Private Limited (TeamF1) willbe made available upon request by any member of the Company interested in receiving thisinformation. The same will also be available at the Registered Office of the Company forinspection during office hours.
The Board of Directors have decided to transfer an amount of Rs. 25 million to theGeneral Reserves out of the profits made during the current financial year.
Your Directors have recommended for your consideration the payment of dividend of Re.0.70/- per share for the year ended 31st March 2016 (i.e. @ 35% on the paid-upequity capital) to be paid if approved at the Eighth Annual General Meeting.
5. Share Capital
During the year under review the total paid-up share capital of the Company stood atRs. 71009700/- consisting of 35504850 equity shares of Rs. 2/- each.
6. Extract of the Annual Return
As mandated by Section 92 of Companies Act 2013 read with the rules made thereunderthe extract of annual return for the financial year ended 31st March 2016 inForm No. MGT-9 is enclosed as Annexure - I to this report.
7. Directors and Key Managerial Personnel
a) Changes in Directors and Key Managerial Personnel (KMP)
During the year under review;
(i) Mr. A. P. Chen has ceased to be the Director and Chairman of the Company effectivefrom 7th August 2015.
(ii) Mr. Douglas Hsiao was appointed as Additional Director on the Board designated asnon-executive Chairman of the Company effective from 29th August 2015.
(iii) Mr. Vinai Kolli has ceased to be the Whole-time Director of the Company effectivefrom 6th November 2015.
(iv) Mr. Mukesh Lulla has been appointed as Additional Director on the Board effectivefrom 4th February 2016.
b) Details of Directors retiring at the ensuing Annual General Meeting (AGM)
(i) In pursuance of section 152 of the Companies Act 2013 at-least two-third of theDirectors (excluding Independent Directors) shall be subject to retirement by rotation.One-third of such Directors must retire from office at each AGM and a retiring director iseligible for re-election.
Accordingly Mr. Tushar Sighat retires by rotation and being eligible offers to bere-appointed at the ensuing AGM. The Board of Directors of your Company recommends hisre-election.
(ii) The Board of Directors upon the recommendation of the Nomination and RemunerationCommittee had appointed Mr. Douglas Hsiao as Additional Director of the Company anddesignated as Non-executive Chairman with effect from August 29 2015 pursuant to Section161(1) of the Companies Act 2013 and Articles of Association of the Company.
Mr. Hsiao will hold office up to the date of the ensuing AGM of the Company. Hisappointment requires the approval of members at the ensuing AGM.
(iii) The Board of Directors upon the recommendation of the Nomination and RemunerationCommittee had appointed Mr. Mukesh Lulla as an Additional Director of the Company witheffect from February 4 2016 pursuant to Section 161(1) of the Companies Act 2013 andArticles of Association of the Company.
Mr. Lulla will hold office up to the date of the ensuing AGM of the Company. Hisappointment requires the approval of members at the ensuing AGM.
c) Declaration by Independent Directors
Pursuant to sub-section (7) of Section 149 of the Companies Act 2013 read with therules made thereunder all the Independent Directors of the Company have given thedeclaration that they meet the criteria of independence as laid down in sub-section (6) ofsection 149 of the Act and the Board at its meeting held on 30th May 2016 hasduly taken note of the same.
8. Number of meetings of Board of Directors
During the year under review five meetings of the Board of Directors were held. Thedetails of the meetings of the Board are furnished in the Corporate Governance Reportwhich is attached to this Report.
Also pursuant to provisions of part VII of the Schedule IV of the Companies Act 2013and regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a Separate Meeting of Independent Directors was held on 19th March2016 for transacting the business enumerated under the said provisions.
9. Annual Evaluation of Board
In pursuance of section 134 (3) (p) of the Companies Act 2013 read with rules madethereunder the Board of Directors carried out the performance evaluation of the Board asa whole and of its Committees and individual directors based on questionnaire andfeedback received from all the Directors on the Board. Directors who were designatedheld separate discussions with each of the Directors of the Company and obtained theirfeedback on overall Board effectiveness as well as performance of each of the otherDirectors.
In pursuance of Section 177 of the Companies Act 2013 read with the rules madethereunder and regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has duly constituted the Audit Committee consisting of 4Non-Executive Directors with majority being Independent Directors including the Chairmanof the Committee. The terms of reference of Audit Committee are as mentioned in Section177 of the Companies Act 2013 and part C of Schedule II of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The detailed terms of referenceconstitution and other relevant details of Audit Committee have been given in CorporateGovernance Report forming part of this Annual Report.
Further in terms of section 177 (8) of the Act it is stated that there were no suchinstances where the Board of Directors have not accepted the recommendations of the AuditCommittee during the year 2015-16.
11.Nomination and Remuneration Committee Policy and Disclosures on ManagerialRemuneration
In accordance with Section 178 and all other applicable provisions if any of theCompanies Act 2013 read with the rules issued thereunder and regulation 19 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors have duly constituted Nomination and Remuneration Committee.
Further the Board of Directors on the recommendations of the Nomination andRemuneration Committee have put in place a Nomination and Remuneration Policy of theCompany.
The Companys remuneration policy is driven by the success and performance of theindividual employees senior management executive directors of the Company and otherrelevant factors including the following criteria;
a) The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company;
b) Relationship of remuneration to performance is clear and meets appropriateperformance industry benchmarks; and
c) Remuneration to Directors Key Managerial Personnel and Senior Management involves abalance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the Company and its goals.
It is affirmed that the remuneration paid to Directors Key Managerial Personnel andall other employees is as per the Remuneration Policy of the Company.
The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors/ employees of your Company is set out in "Annexure - II" to thisReport.
12.Stakeholders Relationship Committee
Pursuant to Section 178 (5) of the Companies Act 2013 and regulation 20 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has dulyconstituted "Stakeholders Relationship Committee". The detailed terms ofreference constitution and other relevant details of Stakeholders Relationship Committeehas been given in Corporate Governance Report forming part of this Annual Report.
13.Vigil Mechanism/Whistle Blower Policy
Pursuant to the provisions of Section 177 of the Companies Act 2013 read with therules made thereunder the Company has formulated and implemented Vigil Mechanism/ WhistleBlower Policy for disclosing of any unethical behavior actual or suspected fraud orviolation of companys code of conduct and other improper practices or wrongfulconduct by employees or directors of the Company. The salient features of the policy havebeen detailed in the Corporate Governance Report forming part of this Annual Report. TheVigil Mechanism/ Whistle Blower Policy has been posted and is available on the website ofthe Company at http://www.dlink.co.in/pdf/Whistle%20Blower%20Policy.pdf.
During the year under review the Company through Audit Committee has not received anycomplaints relating to unethical behavior actual or suspected fraud or violation ofcompanys code of conduct from any employee or directors.
14.Risk Management Policy
Pursuant to Section 134 (3) (n) of the Companies Act 2013 the Company has formulatedand implemented the Risk Management Policy. The Audit Committee shall review and monitorthe Risk Management Policy from time to time. The objective of the Risk Management Policyis to identify the risks impacting the business and formulate strategies / policies aimedat risk mitigation as part of risk management.
15.Details of Subsidiary Company
TeamF1 is subsidiary of the Company engaged in the business of embedded softwareengineering and has R&D capabilities with expertise in Networking and Security and isexpected to bring in positive value to D-Link in terms of enhancing its technological aswell as its research and development capabilities with access to in house customizationand development of new localized products.
TeamF1s financial statements show positive signs of growth in terms of itsrevenues. It registered gross revenue of Rs. 205.87 million as compared to Rs. 173.01million in the previous fiscal year thereby resulting in an increase of 19%. The profitbefore tax stood at Rs. 43.06 million as compared to Rs. 4.54 million in the previousfiscal year.
The Company does not have any material unlisted Indian subsidiary. The Company hasformulated a Policy on Material Subsidiary as required under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and the policy is posted on the website of theCompany under the web link http://www.dlink.co.in/pdf/Material%20Subsidiary%20Policy.pdf.
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 financialstatements of the Companys Subsidiary (in Form AOC-1) is enclosed as Annexure - IIIto this report.
The members of the Company vide passing a resolution at the Seventh Annual GeneralMeeting of the Company had ratified appointment of M/s Deloitte Haskins & Sells LLPChartered Accountants (Registration no.117366W/W-100018) as Auditors of the Company. TheBoard recommends for further ratification of appointment of M/s Deloitte Haskins &Sells LLP Chartered Accountants as the Auditors of the Company for the financial year2016-17.
During the relevant period for the purpose of Section 148 of the Companies Act 2013read with the rules made thereunder there was no manufacturing activity and hencemaintaining of the Cost Accounting records were not applicable.
18.Secretarial Audit Report
Pursuant to the provisions of section 204 of the Companies Act 2013 read with rulesmade thereunder the Board of Directors had appointed Mr. Shivaram Bhat PracticingCompany Secretary as Secretarial Auditor of the Company for the financial year 2015-16 forconducting the Secretarial Audit as required under the provisions of Companies Act 2013.
The Secretarial Audit Report given by Mr. Shivaram Bhat in Form No. MR-3 is annexed asAnnexure - IV to this report.
Your Company has not accepted any Fixed Deposits during the year under review and assuch no amount of principal or interest was outstanding as on date of Balance Sheet.
20.Particulars of loans guarantees or investments
During the year the company has not granted loans and guarantee given investmentsmade and securities provided covered under the provisions of Section 186 of the CompaniesAct 2013.
21.Particulars of contracts or arrangements with related parties
The Company is a subsidiary of D-Link Holding Mauritius Inc. and is a part of D-LinkCorporation. The Company is primarily engaged in marketing and distribution of D-Linkbranded Networking products in India and neighboring countries. The majority products areimported from D-Link Corporation and its Subsidiaries. All the transactions entered by theCompany with Related Parties were in the Ordinary Course of Business and at ArmsLength price basis. The Audit Committee and the Board of Directors reviewed thetransactions (which are repetitive in nature) and the Audit Committee granted approval forsuch transactions.
The disclosures as required under AS-18 have been made in Note 35 of the Notes to thestandalone financial statements. The particulars of contracts or arrangements entered intoby the Company with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 has been disclosed in Form No. AOC-2 which is annexed as Annexure - V.
The Policy on related party transactions as approved by the Board may be accessed onthe Companys website at the link:http://www.dlink.co.in/pdf/RELATED%20PARTY%20POLICY.pdf.
22.Details on Internal Financial Controls related to Financial Statements
Your Company has put in place adequate internal financial controls with reference tothe financial statements for the fiscal 2015-16. In the opinion of the Board the existinginternal control framework is adequate and commensurate to the size and nature of thebusiness of the Company.
23.Material Changes and Commitments if any affecting the Financial Position of theCompany
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statement relateand the date of this Report.
24.Prevention and Redressal of Sexual Harassment at Workplace
The Company has formulated and implemented a policy on prevention prohibition andredressal of sexual harassment of women at workplace in line with the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013read with the rules made thereunder. The Company has also constituted Internal Committeeas per requirements of the above Act.
During the financial year 2015-16 the committee has neither received any complaintsnor any cases were pending as at 31st March 2016.
25.Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
A) Conservation of energy
Your Company is primarily engaged in Marketing and Trading activities and has notconsumed energy of any significant level and no additional investment is required to bemade for reduction of energy consumption. However the Company will continue with itsefforts to conserve the energy.
B) Technology absorption
No comment is being made on technology absorption considering the nature of activitiesundertaken by your Company during the year under review.
C) Foreign exchange earnings and outgo
Total foreign exchange earnings and outgo is stated in Note 38 forming part of theStandalone Financial Statements.
26. Corporate Social Responsibility (CSR)
Pursuant to Section 135 of the Companies Act 2013 read with rules made thereunderyour company has constituted a Corporate Social Responsibility Committee (CSR Committee)and has also formulated CSR Policy in accordance with the Act. During the financialyearthe company is required to spend Rs.4.87 million (previous year Rs.3.20 million)towards Corporate Social Responsibility (CSR) activities.
The Company is in the process of ascertaining CSR initiatives for various programs at abase level review and then putting an enhanced sustainable model to ensure maximumbenefit to the community. For this reason during the year the amount spent by theCompany on the CSR activities is less than the prescribed amount under the Act. The CSRactivities are scalable which coupled with new initiatives that may be considered infuture to spend CSR amount in accordance with the prescribed limits.
The Company has spent Rs. 1.6 million subsequent to closing of the financial year.
The details of Corporate Social Responsibility (CSR) are set out in Annexure-VI.
The CSR Policy of the Company has been posted on the website of the Company athttp://www.dlink.co.in/pdf/CSR%20Policy.pdf.
27. Details of Significant and Material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Companys operations in future
There was no significant and material order passed by any regulator or court ortribunal impacting the going concern status of the Company and its future operations.
28. Management Discussion and Analysis Report
The Management Discussion and Analysis including the result of operations of theCompany for the year as required under Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is appended to this Annual Report.
29. Corporate Governance
As required under Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the report on Corporate Governance as well as theAuditors Certificate regarding compliance of conditions of Corporate Governanceforms a part of the Annual Report.
30. Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourDirectors confirm that:
a) in the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2016 and of the profitof the Company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
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 thecompany and that such internal financial controls are adequate and were operatingeffectively; and
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Directors wish to convey their appreciation to Business Associates BusinessDistributors/ Partners and Bankers for their support and contribution during the year. TheDirectors thank the Companys employees for their hard work and customers vendorsinvestors for their continued support.
| ||For and on behalf of the Board of Directors |
| ||Gary Yang ||Tushar Sighat |
|Mumbai Dated: 30th May 2016 ||Managing Director ||Executive Director & CEO |