D-Link India Ltd.
|BSE: 533146||Sector: Consumer|
|NSE: DLINKINDIA||ISIN Code: INE250K01012|
|BSE 15:42 | 23 Mar||85.55||
|NSE 15:40 | 23 Mar||84.20||
|Mkt Cap.(Rs cr)||304|
|Mkt Cap.(Rs cr)||303.70|
D-Link India Ltd. (DLINKINDIA) - Director Report
Company director report
The Board of Directors of your Company take pleasure in presenting the Ninth AnnualReport together with Balance Sheet and Statement of Profit and Loss for the financial yearended 31st March 2017.
1. Financial Results (Standalone and Consolidated)
(Rupees in Million)
2. State of Company's Affairs
During the financial year 2016-17 your company posted standalone gross revenue of Rs.6966.42 million as compared to Rs. 7007.44 million in the previous year. The standaloneprofit before tax stood at Rs. 242.98 million as compared to Rs. 331.91million in theprevious year.
During the year demonetization of currency has resulted in uncertainty in the industryprimarily with dealer fraternity and has impacted the revenue. The short-term impact isnegative; expect things to return to normal over the course of the fiscal year.
The consolidated financial statements of your Company for the financial year 2016-17are 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 has decided not to transfer any amount to the General Reservesout of the profits made during the current financial year.
Your Directors have recommended for your consideration the payment of dividend of Re.0.50/- per share for the year ended 31st March 2017 (i.e. @ 25% on the paid-upequity capital) to be paid if approved at the Ninth 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 2017 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) Ms. Sue F Wang has ceased to be the Director of the Company effective from 5thAugust 2016.
(ii) Ms. Madhu Gadodia was appointed as Additional Director on the Board designated asIndependent director of the Company effective from 27th August 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. Gary Yang retires by rotation and being eligible offers to bere-appointed at the ensuing AGM. The Board of Directors of your Company recommends hisre-election.
Ms. Madhu Gadodia will hold office up to the date of the ensuing AGM of the Company.Her appointment 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 12th May 2017 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 10thMarch 2017 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. Directors held separatediscussions with other Directors of the Company and obtained their feedback on overallBoard effectiveness as well as performance of each of the other Directors.
10. Audit Committee
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 2016-17.
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 Company's 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 company's code of conduct and other improper practices or wrongful conduct byemployees or directors of the Company. The salient features of the policy have beendetailed in the Corporate Governance Report forming part of this Annual Report. The VigilMechanism/ Whistle Blower Policy has been posted and is available on the website of theCompany 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 ofcompany's 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 aimed atrisk 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.
TeamF1's standalone financial statements show gross revenue of Rs. 192.94 million ascompared to Rs. 205.87 million in the previous fiscal year. The profit before tax stood atRs. 26.63 million as compared to Rs. 43.06 million in the previous fiscal 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
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 Company's Subsidiary (in Form AOC-1) is enclosed as Annexure - III tothis report.
The members of the Company vide passing a resolution at the 8th AnnualGeneral Meeting of the Company had ratified appointment of M/s Deloitte Haskins &Sells LLP Chartered Accountants (Registration no.117366W/W-100018) as Auditors of theCompany. The Board recommends for further ratification of appointment of M/s DeloitteHaskins & Sells LLP Chartered Accountants as the Auditors of the Company for thefinancial year 2017-18.
During the relevant period for the purpose of Section 148 of the Companies Act 2013read with the rules made thereunder maintaining of the Cost Accounting records were notapplicable considering the turnover of manufacturing activity.
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 2016-17 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 investments madeand securities provided covered under the provisions of Section 186 of the Companies Act2013.
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 Arm's Lengthprice basis. The Audit Committee and the Board of Directors reviewed the transactions(which are repetitive in nature) and the Audit Committee granted approval for suchtransactions.
The disclosures as required under AS-18 have been made in Note No. 35 to the standalonefinancial statements. The particulars of contracts or arrangements entered into by theCompany 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 Company's website at the link:
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 2016-17. 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 2016-17 the committee has neither received any complaintsnor were any cases pending as at 31st March 2017.
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 financial year the company was required to spend Rs. 5.83 million towardsCorporate Social Responsibility (CSR) activities for the financial year 2016-17. Howeverthe company has spent Rs. 1.6 Million during the financial year and Rs. 2 millionsubsequent to the closure of financial year. The Company is required to spend Rs.10.39million pertain to previous years.
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 current and previous years theamount spent by the Company on the CSR activities is less than the prescribed amount underthe Act. The CSR activities are scalable which coupled with new initiatives that may beconsidered in future to spend CSR amount in accordance with the prescribed limits.
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 at http://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 Company's 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 Governance forms apart 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 31stMarch 2017 the applicable accounting standards had been followed along with properexplanation relating 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 2017 and ofthe profit of 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 Company's employees for their hard work and customers vendorsinvestors for their continued support.
For and on behalf of the Board of Directors