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Dixon Technologies (India) Ltd.

BSE: 540699 Sector: Consumer
NSE: DIXON ISIN Code: INE935N01012
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VOLUME 104
52-Week high 4490.85
52-Week low 2510.00
P/E 56.69
Mkt Cap.(Rs cr) 3,234
Buy Price 2860.35
Buy Qty 4.00
Sell Price 2875.00
Sell Qty 2.00
OPEN 2904.90
CLOSE 2904.90
VOLUME 104
52-Week high 4490.85
52-Week low 2510.00
P/E 56.69
Mkt Cap.(Rs cr) 3,234
Buy Price 2860.35
Buy Qty 4.00
Sell Price 2875.00
Sell Qty 2.00

Dixon Technologies (India) Ltd. (DIXON) - Director Report

Company director report

Dear Members

Your Directors take pleasure in presenting the 24th Annual Report on thebusiness and operations of your Company along with the audited standalone financialstatements for the year ended March 31 2017. The consolidated performance of the Companyand its subsidiaries and Joint Venture has been referred to wherever required.

FINANCIAL SUMMARY /PERFORMANCE OF THE COMPANY (STANDALONE & CONSOLIDATED)

The Company's financial results are as under:

Rs. in millions

Particulars

Standalone*

Consolidated

For the financial year ended

For the financial year ended
31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16
Profit Before Interest & Depreciation & Exceptional items 835.58 414.47 905.59 596.16
Less : Financial Charges 122.35 71.88 127.65 131.07
Depreciation 99.54 64.80 106.35 84.38
Exceptional items - 11.95 - 27.87
Profit Before Tax And Provisions 613.69 265.85 671.59 352.85
Less : Taxes and Provisions
- Current tax 147.81 57.57 160.87 83.47
- Earlier Year tax 2.38 (0.37) 3.00 (0.11)
- Deferred tax (asset)s/liabilities 17.91 (0.07) 26.11 7.50
-Tax Credit Entitlement U/s 115JAA - (5.11) (2.40) (11.32)
- Tax Credit Entitlement U/s 115JAA earlier (52.32) (0.50) (52.32) (0.50)
- - - - -
Profit after tax 497.92 214.33 536.33 273.81
Balance in Profit & Loss A/c 964.62 796.98 1047.27 820.14
Surplus available for Appropriation 1462.54 1011.31 1583.60 1093.95
Appropriations:
Adjustment on account of Amalgamation 57.21 - 111.19 -
Interim dividend on Equity Shares 65.91 38.79 65.91 38.79
Dividend Tax on Interim Dividend 13.42 7.90 13.42 7.90
Balance in Profit & Loss A/c at the end of the 1325.99 964.62 1393.09 1047.27
Year

*Standalone Financials of the Company include the Financials of Dixon Appliance PrivateLimited and Dixon Bhurji Moulding Private Limited wholly owned subsidiaries of yourCompany since amalgamated with and into Your Company Dixon Technologies (India) Limitedw.e.f pursuant to the order of Hon'ble The National Company Law Tribunal (‘NCLT')Allahabad bench dated April 13 2017 approving the scheme of amalgamation.

This year has been a significant year from the growth perspective of the Company. YourCompany has been converted into a public limited company pursuant to a resolution passedby the Shareholders of the Company at the Extra Ordinary General Meeting held on April 182017 and a fresh certificate of incorporation consequent upon conversion from a privatelimited company to a public limited company was issued by the Registrar of Companies (ROC)on 2nd May 2017 in the name of "Dixon Technologies (India) Limited".

STATE OF COMPANY'S AFFAIR

With the expected positive momentum in the Indian economy Your Company is focused ongrowth and achieving profitability along with a renewed commitment to customer service.Innovations investment and positive modifications are expected in the near futureboosting your Company's revenue. Together with forward looking strategy your Company isalso focusing extensively on expanding the business and operational improvements throughvarious strategic projects for operational excellence.

The reverse logistics business has also witnessed sharp increase. Further your Companyhas also witnessed increase in the business of reverse logistics business and thereforethey are an important component of total turnover of your Company. Your Company has alsocreated several service centers for reverse logistics services catering to various clientsacross the country.

During the year Your Company has made further investment in its Joint Venture Companyi.e Padget Electronics Private Limited. Also Your Company achieved a major milestone byentering into a joint venture agreement with Aditya Infotech Limited and incorporated ajoint venture Company AIL Dixon Technologies Private Limited (ADTPL) on February 8 2017as a private limited company. The registered office of ADTPL is situated at B-14 & 15Phase-II Gautam Buddha Nagar Noida Uttar Pradesh 201305.

ADTPL is authorised to carry out the business of manufacturing and selling of securitysystems including digital video recorders CCTV cameras alarms etc. electricalappliances energy devices gadgets and components for industrial business and householdapplications.

Also your Company has received certification under ISO 14001:2015 by United Registrarof Systems for compliance with environmental management system in the manufacture andsupply of washing machines at the factory located at Plot No- C-3/1 Selaqui IndustrialArea Dehradun Uttarakhand during the year under review.

Your Company has performed well on all fronts. The Total turnover and EBIDTA of yourCompany as well as the entire group has increased.

For further details of State of Company's affair during the period under review pleaserefer to the section titled "Management Discussion and Analysis".

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Except as disclosed in the Board Report in the opinion of the Board there has been nomaterial changes and commitments affecting the financial position of Your Company whichhave occurred between the end of the financial year of Your Company to which the financialstatements relate and the date of the report.

Your Company is planning to go for the initial public offer and in this regard YourCompany has filed its Draft Red Herring Prospectus on 19th May 2017 withSecurities and Exchange Board of India the BSE Limited and National Stock Exchange ofIndia Limited.

CONSOLIDATION OF FINANCIALS

In compliance with provisions of Section 129 (3) of the Companies Act 2013 read withCompanies Accounts) Rules 2014 Your Company has prepared Consolidated FinancialStatements as per the Accounting Standards on Consolidated Financial Statements issued bythe Institute of Chartered Accountants of India. The Audited Consolidated FinancialStatements along with the Auditors' Report thereon forms part of this Annual Report.Further a statement containing salient features of the financial statements of thesubsidiary companies is disclosed separately and forms part of this Annual Report.

DIVIDEND

During the Year Interim Dividend was declared twice by the Board of Directors @ 35%and @25% respectively. The Board does not recommend any further dividend.

RESERVES

The provision of the Companies Act 2013 does not mandate any transfer of profits toGeneral Reserve. Hence Your Company has not transferred any amount to general reserve outof the profits of the year.

SCHEME OF AMALGAMATION

Pursuant to a scheme of amalgamation ("Scheme") under sections 391 to 394 andother relevant provisions of the Companies Act 1956 approved by your Board of Directorson November 25 2015 the two of wholly owned subsidiaries of the Company Dixon BhurjiMoulding Private

Limited ("DBMPL") and Dixon Appliances Private Limited ("DAPL")were proposed to be amalgamated with and into Your Company. The Scheme has becomeoperational with effect from the appointed date i.e. April 1 2016 ("AppointedDate") pursuant to approval of the Scheme by the NCLT Allahabad bench vide its orderdated April 13 2017 and registration of the same with the ROC on April 20 2017. Therationale of the Scheme was to provide for integration of capabilities streamlining ofadministration effective management system and operational flexibility as theconsolidation has resulted in consolidation of business operation of DBMPL and DAPL withthat of your Company. The entire business functions of DBMPL and DAPL including all theirproperties assets rights title interests liabilities obligations licenseslitigations and employees stand transferred to and vested in your Company as on theAppointed Date and DBMPL and DAPL stand dissolved without the process of winding up. SinceDBMPL and DAPL were the wholly owned subsidiaries of your Company no consideration hasbeen paid and the equity shares of DBMPL and DAPL held by Your Company stand cancelled.Further the authorised share capital of DBMPL and DAPL stand transferred to your Companyupon the Scheme becoming effective and with effect from the Appointed Date.

BOARD OF DIRECTORS ITS COMMITTEES AND MEETINGS THEREOF

Your Company has a professional Board with right mix of knowledge skills and expertisewith an optimum combination of executive non-executive and Independent Directorsincluding one woman Director. The Board provides strategic guidance and direction to YourCompany in achieving its business objectives and protecting the interest of thestakeholders. Your Board is also supported by Six Committees viz. Audit CommitteeNomination & Remuneration Committee CSR Committee Stakeholders' RelationshipCommittee Executive Committee and I.P.O Committee of Board of Directors.

One meeting of the Board of Directors is held in each quarter. Additional meetings ofthe Board/ Committees are convened as may be necessary for proper management of thebusiness operations of Your Company.

The agenda and Notice for the Meetings is prepared and circulated in advance to theDirectors. The Board of Directors of Your Company met Sixteen (16) times during theFinancial Year 2016-17 i.e. April 22 2016 June 07 2016 June 07 2016 July 15 2016August 04 2016 August 27 2016 September 07 2016 September 17 2016 September 192016 September 20 2016 September 21 2016 November 14 2016 December 14 2016January 09 2017 February 23 2017 and March 06 2017.

Details of attendance of Directors at Board Meetings of Your Company held during theyear under review are as follows:

Name of the Director Category Nos. of meetings attended
Mr. Sunil Vachani Executive Chairman 16
Mr. Atul B. Lall Managing Director 16
Mr. R. K Dhawan Director 0*
Dr. R. C Chopra Independent Director 7
Mr. Vishal Gupta Director 4
Dr. Manuji Zarabi Independent Director 1
Ms. Poornima Shenoy Independent Director 1

*Mr. RK Dhawan resigned from the Directorship effective 10th April 2016.

The necessary quorum was present in all the meetings. The intervening gap between anytwo meetings was not more than one hundred and twenty days as prescribed by the CompaniesAct 2013.

A detailed update on the Board & its Committees composition thereof number ofmeetings held during Financial Year 2016-17 and attendance of the Directors at suchmeeting is provided in the Report on Corporate Governance.

COMMITTEES OF THE BOARD

Audit Committee

Your Company has a duly constituted Audit Committee in line with the provisions of theCompanies Act 2013. As on 31st March 2017 the Committee comprised of 1 (One)executive Director viz. Mr. Atul B Lall and 3 (Three) non-executive Directors viz. Dr.R.C. Chopra Mr. Vishal Gupta & Mr. Manuji Zarabi.

Mr. Vishal Gupta resigned from the Directorship and consequentially as a member ofAudit Committee effective 3rd May 2017. Further Mr. Manoj Maheshwari has beenappointed as Independent Director on 3rd May 2017. The Board has re-constituted the AuditCommittee on 3rd May 2017 in accordance with the requirement of Companies Act2013 and other applicable provisions with Mr. Manoj Maheshwari as its Chairperson. TheCommittee comprises of the following three Directors as on the date of this report:

Name of Director Position in the Committee Designation
Mr. Manoj Maheshwari Chairperson Independent Director
Dr. R C Chopra Member Independent Director
Dr. Manuji Zarabi Member Independent Director

All members of Audit Committee are financially literate and 2 Directors out of 3members have financial management expertise. The Audit Committee met Two (2) times duringthe financial year 2016-17 on June 7 2016 and September 20 2016.

The terms of reference of Audit Committee is enumerated under the "CorporateGovernance Report" annexed hereto.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been constituted by the Board at itsMeeting held on 20th September 2016. As on 31st March 2017 theCommittee comprised of (One) executive Director viz. Mr. Sunil Vachani and 3 (Three)non-executive Directors viz. Dr. R.C. Chopra Mr. Vishal Gupta and Dr. Manuji Zarabi.

Mr. Vishal Gupta resigned from the Directorship and consequentially as a member ofNomination and Remuneration Committee effective 3rd May 2017. The Board hasre-constituted the Nomination and Remuneration Committee on 3rd May 2017 inaccordance with the requirement of Companies Act 2013 and other applicable provisions.

As on date of this report this Committee comprises of the following Directors:

Name of Director Position in the Committee Designation
Ms. Poornima Shenoy Chairperson Independent Director
Dr. Manuji Zarabi Member Independent Director
Mr. Sunil Vachani Member Executive Chairman
Mr. Manoj Maheshwari Member Independent Director

During the period under review no meeting of the Nomination and Remuneration Committeewas held.

The terms of reference of Nomination and Remuneration Committee is enumerated under the"Corporate Governance Report" annexed hereto.

Corporate Social Responsibility Committee

Your Company has constituted the Corporate Social Responsibility ("CSR")Committee as per provisions u/s 135 of the Companies Act 2013. This Committee looks afterthe functions as enumerated u/s 135 of the Companies Act 2013.

As on 31st March 2017 the Committee comprised of the following Directors:

S.No. Name of the Director Category
1. Mr. Sunil Vachani Chairperson
2. Mr. Atul B Lall Member
3. Dr. R.C. Chopra Member
4. Mr. Vishal Gupta Member

Mr. Vishal Gupta resigned from the Directorship and consequentially as a member of CSRCommittee effective 3rd May 2017.

As on date of this report this Committee comprises of the following Directors:

Name of Director Position in the Committee Designation
Mr. Sunil Vachani Chairperson Executive Chairman
Mr. Atul B. Lall Member Managing Director
Dr. R.C. Chopra Member Independent Director

The Corporate Social Responsibility (CSR) Committee met Three (3) times during thefinancial year 2016-17 on June 7 2016 September 20 2016 and March 06 2017.

Stakeholder Relationship Committee

The Stakeholders Relationship Committee has been constituted by the Board at itsMeeting held on 6th March 2017. As on 31st March 2017 theCommittee comprised of 2 (Two) executive Directors viz. Mr. Sunil Vachani and Mr. Atul BLall and 2 (Two) non-executive Directors viz. Dr. Manuji Zarabi and Mr. Vishal Gupta.

Mr. Vishal Gupta resigned from the Directorship and consequentially as a member ofStakeholders Relationship Committee effective 3rd May 2017.

As on date of this report this Committee comprises of the following Directors:

Name of Director Position in the Committee Designation
Dr. Manuji Zarabi Chairperson Independent Director
Mr. Sunil Vachani Member Executive Chairman
Mr. Atul B. Lall Member Managing Director

The Stakeholder Relationship Committee looks into the redressal of the shareholderscomplaints in respect of any matter including transfer of shares non -receipt of annualreport non -receipt of declared dividend etc.

During the period under review no meeting of the Stake holder's relationship committeewas held.

Executive Committee

Your board has constituted the Executive Committee which undertakes matter related today to day affair of Your Company. The composition of the Executive Committee is asfollow:

Name of Director Position in the Committee Designation
Mr. Sunil Vachani Member Executive Chairman
Mr. Atul B. Lall Member Managing Director

IPO Committee

Your board has constituted the IPO (Initial Public Offer) Committee which undertakesmatter related to Initial Public Offer of Your Company. The composition of the IPOCommittee is as follows:

Name of Director Position in the Committee Designation
Mr. Sunil Vachani Member Executive Chairman
Mr. Atul B Lall Member Managing Director
Mr. Manuji Zarabi Member Independent Director
Mr. Manoj Maheshwari Member Independent Director

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)- APPOINTMENT AND RESIGNATION

BOARD OF DIRECTORS

Mr. R. K Dhawan has resigned from the post of directorship of Your Company w.e.f. April10 2016.

Dr. Manuji Zarabi and Ms. Poornima Shenoy have been appointed as Additional Director ofthe Company w.e.f. February 23 2017 and they have been regularised as IndependentDirectors of the Company at the Extra-ordinary General Meeting held on April 01 2017.

Also pursuant to the provisions of the Companies Act approval of shareholders hasbeen obtained at the at the Extra-ordinary General Meeting held on April 01 2017 tore-appoint Dr. R.C Chopra as an Independent Director of Your Company.

Mr. Manoj Maheshwari has been appointed as Additional Director of Your Company w.e.f.May 03 2017 and he has been regularised as Independent Director of Your Company at theExtra-ordinary General Meeting held on May 05 2017.

Also Mr. Vishal Gupta has resigned from the Directorship of the Company vide hisletter dated 17th April 2017 and the same was effected from 3rdMay 2017. The Board places on record appreciation for valuable guidance received from Mr.Vishal Gupta during his tenure as a director of the Company.

Mr. Sunil Vachani Executive Chairman of the Company has been appointed as Whole TimeDirector of the Company at the Extra Ordinary General Meeting held on May 05 2017.

Mr. Atul B. Lall has been re-appointed as Managing Director of the Company at the ExtraOrdinary General Meeting held on May 05 2017.

In accordance with Section 152 of the Companies Act 2013 and Articles of Associationof the Company Mr. Sunil Vachani Executive Chairman of the Company (DIN-00025431) shallretire by rotation as Director at the ensuing annual general meeting and being eligibleoffers himself for reappointment. A brief profile of Mr. Vachani has been provided in theReport on Corporate Governance.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. SunilVachani Executive Chairman Mr. Atul B Lall Managing Director Mr. Gopal Jagwan ChiefFinancial Officer and Mr. Ashish Kumar Group Company Secretary are the KMPs of YourCompany.

The Board of Directors of Your Company at their meeting held on March 06 2017 hasappointed Mr. Ashish Kumar (Membership No.: FCS 8355) as Group Company Secretary w.e.f.March 06 2017.

Mr. Sunil Vachani Executive Chairman (DIN: 00025431) of the Company has been appointedas Whole Time Director of Your Company at the Extra Ordinary General Meeting held on May05 2017.

Mr. Atul B. Lall (DIN:00781436) has been re-appointed as Managing Director of YourCompany at the Extra Ordinary General Meeting held on May 05 2017.

APPOINTMENT AND DECLARATION OF INDEPENDENT DIRECTOR OF THE COMPANY

The Board of Your Company as on 31st March 2017 comprises of SixDirectors out of which four Directors are non-executive directors and three out of fournon-executive directors are Independent Directors. All the Independent Directors areappointed on the Board of Your Company in compliance with the applicable provisions of theCompanies Act 2013. Your Company has received declarations from all the IndependentDirectors of Your Company confirming that they meet the criteria of Independence undersub-section (6) of section 149 of the Act and Regulation 16(b) of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.

During the Financial Year under review two Independent Directors viz. Ms. PoornimaShenoy and Dr. Manuji Zarabi have been appointed.

Further as on date of this report the Board of Your Company comprises of SixDirectors out of which four Directors are non-executive directors and all fournon-executive directors are Independent Directors.

After close of the financial year under review Mr. Manoj Maheshwari was appointed asIndependent Director on 03rd May 2017

DIRECTOR'S APPOINTMENT AND REMUNERATION POLICY

Your Company's policy on directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under sub section (3) of Section 178 of the Companies Act 2013 as isadopted by the Board.

Your Company has adopted a comprehensive policy on Nomination and Remuneration ofDirectors on the Board. As per such policy candidates proposed to be appointed asDirectors on the Board shall be first reviewed by the Nomination and RemunerationCommittee in its duly convened Meeting. The policy can be accessed at the following Link:http://www.dixoninfo.com/nomination-and-remuneration-policy/ .

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to conduct its business in a socially responsible ethicaland environmental friendly manner and to continuously work towards improving quality oflife of the communities in its operational areas.

Your Company has a duly constituted CSR Committee which is responsible for fulfillingthe CSR objectives of Your Company. The composition of CSR committee is as statedelsewhere in this report.

CSR POLICY

The Board of Directors has adopted a CSR policy in line with the provisions of theCompanies Act 2013. The CSR Policy of Your Company lays down the philosophy and approachof Your Company towards its CSR commitment. The CSR policy inter-alia deals with theobjectives of the Company's CSR initiatives its guiding principles thrust areasresponsibilities of the CSR Committee implementation plan and reporting framework. Thethrust areas of the Company's CSR activities and some of the key initiatives during theyear under review are as under:

a. eradicating hunger poverty and malnutrition promoting health care includingpreventive health care and sanitation and making available safe drinking water includingcontribution to the Swach Bharat Kosh;

b. promoting education including special education and employment enhancing vocationskills especially among children women elderly and the differently able and livelihoodenhancement projects;

c. promoting gender equality empowering women setting up homes and hostels for womenand orphans; setting up old age homes day care centres and such other facilities forsenior citizens and measures for reducing inequalities faced by socially and economicallybackward groups.

Annual Report on Corporate Social Responsibility Activities of the Company is enclosedas ANNEXURE -I and forms a part of this report.

CAPITAL STRUCTURE

a. Authorised Capital

The Company at Extra-Ordinary General Meeting dated September 09th 2016increased the Authorised Capital of the Company from Rs. 50050000/- (Rupees Five Croresand Fifty thousand only) divided into 5000000 (Fifty Lacs) equity shares of Rs. 10/-(Rupees Ten only) each and 5000/- (five thousand) Preference Shares of Rs. 10/- (RupeesTen only) each to Rs.200000000/-(Rupees Twenty Crores only) divided into 19995000(One Crores Ninety nine Lacs ninety five thousand only) equity shares of Rs. 10/- (RupeesTen only) each and 5000/- (five thousand) Preference Shares of Rs. 10/- (Rupees Ten only)each

Further after the close of financial year at the adjourned Extra Ordinary GeneralMeeting held on 18th April 2017 the authorized share capital of the Companywas reclassified/ consolidated from Rs. 200000000/-(Rupees Twenty Crores only) dividedinto 19995000 (One Crore Ninety Nine Lacs Ninety Five Thousand Only) equity shares ofRs. 10/- (Rupees Ten only) each and 5000/- (Five Thousand) Preference Shares of Rs. 10/-(Rupees Ten only) each to Rs. 200000000/-(Rupees Twenty Crores only) divided into20000000 (Two Crores only) equity shares of Rs. 10/- (Rupees Ten only) each.

Further pursuant to the amalgamation of DBMPL and DAPL Wholly owned subsidiaries withand into the Company vide order of the National Company Law Tribunal dated April 13th2017 the Authorised Capital of both the subsidiaries amounting to Rs. 40000000 and Rs.20000000 respectively were merged into the Authorised Capital of the Company.

After the above mentioned modifications the Authorised Capital of the Company is Rs.260000000 divided into 26000000 Equity Shares of Rs. 10/- each.

b. Employee Stock Option Plan

Your Company instituted the ‘2010 Dixon Employees Stock Option Plan' ("ESOPPlan") pursuant to a Board resolution dated September 9 2010 and Shareholders'resolution dated September 28

2010. Pursuant to a resolution passed at the EGM held on June 3 2008 shareholders ofthe Company had authorised issue of a maximum of such number of Equity Shares notexceeding 15% of the paid-up capital of Your Company post issue and allotment of suchequity shares and compulsorily convertible debentures to India Business Excellence Fund Iand Vistra ITCL (India) Limited (Formerly known as IL&FS Trust Company Limited) underone or more employee stock option schemes.

Pursuant to the ESOP Plan Your Company has allotted 314806 Equity Shares to theeligible employees in Fiscal 2017. The following table sets forth the particulars of theoptions granted vested and exercised under the ESOP Plan as on the date of this Report:

Particulars Details
Options granted Date of grant No. of options granted
November 2 2010 255880
July 1 2015 137426
TOTAL 393306

 

Pricing formula Date of grant No. of options granted Exercise price (in Rs.)

 

Particulars Details
November 2 2010 255880 119.00
July 1 2015 137426 290.00
Options vested 379596
Options exercised 314806
Total number of Equity 314806
Shares arising as a result of
exercise of options
Options 78500
forfeited/lapsed/cancelled
Variation of terms of options The exercise period for the options granted on November 2 2010 was extended by one year pursuant to approval of the Board through a circular resolution dated October 14 2015.
Money realized by exercise of options Rs. 60.96 Million
Total number of options in force NIL
Employee wise details of options granted to:

 

Directors Key Managerial Personnel Name of Director/KMP No. of Options granted
Atul B. Lall 200000
Gopal Jagwan 15000
Total 215000

 

Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during that year Name of employees No. of Options granted % of Options granted (>5%)
Fiscal 2011
Atul B. Lall 100000 39.08
Vineet Kumar Mishra 13540 5.29
Kamal Krishan Raina 13345 5.22
Kailash Chander Sharma 13345 5.22
Fiscal 2016
Atul B. Lall 100000 72.77
Rajeev Lonial 10000 7.28
Gopal Jagwan 8983 6.54

 

Identified employees who are granted options during any one year equal to or exceeding 1% of the issued Equity Shares (excluding outstanding warrants and conversions) of our Name of employees Date of grant No. of options granted % of Options granted >1% of the Equity shares capital
Atul B. Lall November 2 2010 100000 3.22
Particulars Details
Company at the time of grant Atul B. Lall July 1 2015 100000 3.22

c. Conversion of Compulsorily Convertible Debentures

During the year under review Your Company has converted 243729 compulsorilyconvertible debentures (CCD) of Rs. 1000/- each held by India Business Excellence Fund Iinto 838528 Equity Shares of Rs. 10 each at a premium of Rs. 280.66 each aggregating toRs. 290.66/- per share and 131238 CCD of Rs. 1000/- each held by Vistra ITCL (India)Limited (Formerly known as IL&FS Trust Company Limited) into 451513 Equity Shares ofRs. 10/- each at a premium of Rs. 280.66/- each aggregating to Rs. 290.66 per share.

d. Bonus Share Issue

During the year under review Your Company has allotted 6277337 fully paid up sharesof face value of Rs. 10 each in September 2016 to the shareholders of Your Company inproportion of 4:3.

Hence as on 31st March 2017 total paid up Share Capital of Your Companywas Rs. 109853410/- divided into 10985341 numbers of Equity Shares of Rs. 10/- each ofYour Company.

Also during the period under review Your Company has not bought back any of itssecurities / has not issued any sweat equity shares / has not Issued any Bonus sharesexcept as stated above/ has not provided any Stock Option Scheme to its employees exceptas provided elsewhere in this report / has not issued any equity shares with differentialrights during the year under review.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE U/S 186

Particulars of loans guarantees given and investments made during the year inaccordance with Section 186 of the Companies Act 2013 is annexed to this report as ANNEXURE-II.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The management discussion and analysis report on the operations of the Company has beengiven separately and forms part of this report.

RISK MANAGEMENT

While the business risk associated with operating environment ownership structureManagement System & Policy the financial risk lies in Asset Quality LiquidityProfitability and Capital Adequacy. Your company recognizes these risks and makes besteffort to mitigate them in time and ensure that the Company accepts risks based on therisk appetite of the organisation. Risk Management is also an integral part of YourCompany's business strategy.

Business Risk Evaluation and Management is an ongoing process within the Organization.Your Company has a risk management framework to identify monitor and minimize risk asalso identify business opportunities.

Your Company has a well-defined Risk Management Policy. The Policy has been developedafter taking cognizance of the relevant statutory guidelines. The Policy inter aliaprovides for the following:

1. Risk Management framework;

2. Identifying and assessing risks associated with various business decisions beforethey materialize. Take informed decisions at all levels of the organization in line withthe Company's risk appetite;

3. Ensuring protection of shareholder's stake by establishing an integrated RiskManagement Framework for identifying assessing mitigating monitoring evaluating andreporting all risks;

4. Strengthening Risk Management through constant learning and improvement;

5. Adoption and implementation of risk mitigation measures at every level in order toachieve long-term goals effectively and sustainably;

6. Ensuring sustainable business growth with stability.

In the opinion of the Board there are no risks that may threaten the existence of YourCompany.

WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy which provides a vigil mechanism for dealingwith instances of fraud and mismanagement. The Whistle Blower Policy has also beenuploaded on the website of the Company at www.dixoninfo.com.

SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES

In order to realign the group structure and consolidate multi layered structure interms of scheme of amalgamation ("Scheme") under sections 391 to 394 and otherrelevant provisions of the Companies Act 1956 approved by your Board on November 252015 the two of Wholly owned Subsidiaries of the Company DBMPL and DAPL were proposed tobe amalgamated with and into Your Company. The Scheme has become operational with effectfrom the appointed date pursuant to approval of the Scheme by the NCLT Allahabad vide itsorder dated April 13 2017 and registration of the same with the RoC on April 20 2017.

Also the Company has entered into a joint venture agreement with Aditya InfotechLimited and incorporated a joint venture Company AIL Dixon Technologies Private Limited(ADTPL) on February 8 2017 as a private limited company.

The Company now has One Subsidiary and Two Joint Venture Companies and same areincorporated in India. The Subsidiary is 100% beneficially owned by Dixon Technologies(India) Limited. The Company regularly monitors the performance of its Subsidiaries andJoint Ventures.

Report on Performance and financial position of each of the subsidiaries associatesand joint venture companies included in the consolidated financial statement in Form AOC 1forms part of the Financial Statements of the Company.

CORPORATE GOVERNANCE REPORT

Your Company strives to ensure that best corporate governance practices are identifiedadopted and consistently followed. Your Company believes that good governance is the basisfor sustainable growth of the business and for enhancement of stakeholder value. Adetailed report on corporate governance forms an integral part of Annual Report and is setout as separate section therein.

RELATED PARTY TRANSACTION

There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large.

The details of the related party transactions as required under Section 13(3)(h) readwith Rule 8 of the Companies (Accounts) Rules 2014 is attached in Form AOC 2 attachedas ANNEXURE-III.

AUDITORS & AUDITORS' REPORT

Statutory Auditors

M/s Singhi & Co. Chartered Accountants (FRN No- 302049E) were appointed asStatutory Auditors of Your Company to hold office from the conclusion of 21stAnnual General Meeting until the conclusion of the 25th Annual General Meetingwhich was subject to the ratification at every Annual General Meeting.

As per the provisions of Section 139 of the Companies Act 2013 the appointment ofStatutory Auditors is required to be ratified by members at every Annual General Meeting.Accordingly the appointment of M/s. Singhi & Co. Chartered Accountants as StatutoryAuditor of Your Company is recommended by your Board for ratification by the shareholders.

Statutory Auditors' Report

Auditors' observations are self-explanatory which do not call for any furtherclarifications. There has been no qualification reservation or adverse remarks made bythe Auditor in their report for the financial year ended 31st March 2017. The Auditor'sReport is unmodified i.e. it does not contain any qualification.

Internal Auditors

Pursuant to the provision of Section 138 of the Companies Act 2013 has mandated theappointment of Internal Auditor in the Company. Accordingly M/s S S Kothari Mehta &Co Chartered Accountants were appointed as Internal Auditors of the Company for thefinancial year 2016-17.

Cost Audit & Cost Auditors

In terms of the Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014 Your Company is required to maintain cost accountingrecords and get them audited every year.

The Board of Directors appointed M/s A.N. Satija & Co. Cost Accountants Delhi(Regn. No. 100267) as Cost Auditors to audit the cost accounts of Your Company for theFinancial Year 2017-18. In terms of the provisions of Section 148 of the Companies Act2013. As per the requirements of the said section remuneration payable to the CostAuditors is required to be ratified by the shareholders at the General Meeting.Accordingly resolution ratifying the remuneration payable to A.N. Satija & Co. CostAccountants forms a part of the Notice convening the 24th Annual GeneralMeeting.

DEPOSITS

During the year under review Your Company has not accepted any deposits from thepublic under Section 73 of the Companies Act 2013 and rules made thereunder. There is nounclaimed or unpaid deposit lying with Your Company.

HUMAN RESOURCES

People remain the most valuable asset of your Company. Your Company follows a policy ofbuilding strong teams of talented professionals. Your Company continues to build on itscapabilities in getting the right talent to support different products and geographies andis taking effective steps to retain the talent. It has built an open transparent andmeritocratic culture to nurture this asset. Your Company recognizes people as its mostvaluable asset and Your Company has kept a sharp focus on Employee Engagement. YourCompany's Human Resources is commensurate with the size nature and operations of YourCompany. As on March 31 2017 Your Company has 629 permanent employees and 4030 contractlabour.

Company's Industrial Relations continued to be harmonious during the period underreview.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 197 of the Companies Act 2013 and Rule5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thenames and other particulars of employees forms part of this report. Details of employee asrequired pursuant to Rule 5(2) & (3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are as annexed as ANNEXURE-IV. SIGNIFICANT ANDMATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There has been no significant and material order passed by any regulator courts ortribunals impacting the going concern status and operations of Your Company in future.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy technology absorption and foreign exchangeearnings and outgo as per Section 134(3)(m) is given in ANNEXURE-V to this report.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES

Your Company has always believed in providing a safe and harassment free workplace forevery women employee working with Your Company. Your Company always endeavours to createand provide an environment that is free from discrimination and harassment includingsexual harassment.

Your Company has in place a policy on prevention of sexual harassment at workplace. Thepolicy aims at prevention of harassment of women employees as well as contractors and laysdown the guidelines for identification reporting and prevention of sexual harassment.There is an Internal Complaints Committee (ICC) which is responsible for redressal ofcomplaints related to sexual harassment and follows the guidelines provided in the policy.

The Company has not received any complaint of sexual harassment during the year underreview.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in Form MGT 9 is annexed herewith as ANNEXURE-VI.

REPORTING OF FRAUD

There have been no instances of fraud reported by the Statutory Auditors or InternalAuditor under Section 143(12) of the Act and Rules framed thereunder either to the AuditCommittee the Board of Directors or to the Central Government.

CHANGES IN MEMORANDUM OF ASSOCIATION

Following key changes have been made in the Memorandum and Articles of Association ofYour Company as on the date of writing this report:

Date of Shareholders' resolution unless otherwise specified Nature of Amendment
September 9 2016 Amendment to Clause V of the Memorandum of Association to reflect the increase in the authorised share capital of our Company from Rs. 50.05 million divided into 5000000 Equity Shares and 5000 Preference Shares to Rs. 200.00 million divided into 19995000 Equity Shares and 5000 Preference Shares
September 9 2016 Adoption of a restated Memorandum of Association in accordance with Companies Act 2013
April 18 2017 Amendment to Clause I of the Memorandum of Association for deletion of the word "Private" and the consequent change in the name of Your Company to Dixon Technologies (India) Limited
Deletion of Clause III(A)(3) of the Memorandum of Association which read as follows:
"To buy sell deal in shares and securities foreign exchange gold silver cotton jute hessian oil oils-seeds and hold them as permitted under the law from time to time in force."
Amendment to Clause V of the Memorandum of Association to reflect the re-classification of the authorised share capital of our Company from Rs. 200.00 million divided into 19995000 Equity Shares and 5000 Preference Shares to Rs. 200.00 million divided into 20000000 Equity Shares
April 20 2017 Amendment to Clause V of the Memorandum of Association to reflect the increase in the authorised share capital of Your Company from Rs. 200.00 million divided into 20000000 Equity Shares to Rs. 260.00 million divided into 26000000 Equity Shares due to the transfer and addition of the authorised share capital of DAPL and DBMPL to the authorised share capital of Your Company pursuant to the Scheme

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act 2013 your directors hereby confirmthat:

(a) in the preparation of the annual accounts for the financial year ended March 312017 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

(b) the directors have 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 at the end of the financial year and ofthe profit and loss of the Company for that period;

(c) the directors have 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 preventing and detecting fraud and otherirregularities;

(d) the directors have prepared the annual accounts for the financial year ended March31 2017 on a going concern basis;

(e) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGMENT

Your Directors wish to express their sincere appreciation for the support andcooperation which the Company continues to receive from its clients Banks GovernmentAuthorities Financial Institutions and associates and are grateful to the shareholdersfor their continued support to the Company. Your Directors place on record theirappreciation for the contributions made and the efforts put in by the management team andemployees of the Company at all levels.

By the order of the Board
For Dixon Technologies (India) Limited
Place: NOIDA Sunil Vachani Atul B Lall
Date: 13TH July 2017 (Executive Chairman) (Managing Director)
DIN:00025431 DIN: 00781436