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Redington India Ltd.

BSE: 532805 Sector: Others
NSE: REDINGTON ISIN Code: INE891D01026
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OPEN 142.30
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VOLUME 101334
52-Week high 179.00
52-Week low 53.55
P/E 34.08
Mkt Cap.(Rs cr) 11,317
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 142.30
CLOSE 142.45
VOLUME 101334
52-Week high 179.00
52-Week low 53.55
P/E 34.08
Mkt Cap.(Rs cr) 11,317
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Redington India Ltd. (REDINGTON) - Director Report

Company director report

To the Members

Your Directors are pleased to present their Twenty Eighth Annual Report together withthe Audited Financial Statements of your Company ("the Company" or"Redington") for the financial year ended on March 31 2021.

The Directors feel that it is appropriate to present the consolidated financialperformance of the Company in the manner set out below:

Rs. in Crores

2020-21 2019-20
Particulars India Consolidated Overseas Consolidated Total Consolidated India Consolidated Overseas Consolidated Total Consolidated
Revenue from operations 22827.4 34118.5 56945.9 18789.7 32675.5 51465.2
Other Income 55.7 40.0 95.7 29.8 18.8 48.6
Total Revenue 22883.1 34158.5 57041.6 18819.5 32694.3 51513.8
Total Expenses:
a) Cost of goods sold 21581.7 32219.3 53801.0 17608.0 31040.3 48648.3
b) Employee Benefits 199.8 632.2 832.0 209.0 574.8 783.8
c) Other Expenses 542.0 427.5 969.5 584.0 426.3 1010.3
Profit before Interest Depreciation and Tax 559.6 879.5 1439.1 418.5 652.9 1071.4
a) Interest Expenses 54.8 101.7 156.5 122.0 97.0 219.0
b) Depreciation & Amortization Expenses 54.8 93.4 148.2 72.9 82.5 155.4
Profit before Tax and exceptional item 450.0 684.4 1134.4 223.6 473.4 697.0
Exceptional item
Exceptional item - Impairment of goodwill and other intangibles - 6.3 6.3 3.6 1.1 4.7
Profit before tax 450.0 678.1 1128.1 220.0 472.3 692.3
Tax Expense 204.3 137.2 341.5 82.2 76.2 158.4
Share of loss of associate - - - - - -
Minority Interest - 30.2 30.2 (1.5) 20.2 18.7
Profit after Tax 245.7 510.7 756.4 139.3 375.9 515.2

Your Directors have made the following appropriations out of the standalone profits ofthe Company:

Rs. in Crores

Surplus in the Standalone Statement of Profit and Loss
Balance as per the last Balance Sheet as on March 1391.27
312020
Add: Profit for the financial year 2020-21 263.33
Balance at the end of the year as on March 31 2021 1654.60

FINANCIAL PERFORMANCE

The Standalone and Consolidated Financial Statements of the Company for the financialyear 2020-21 have been prepared in accordance with the Indian Accounting Standards (IndAS) as required under the Companies Act 2013.

The consolidated revenue of the Company for the financial year was Rs. 57041.6 croresas against Rs. 51513.8 crores in the previous financial year registering a growth of10.7% while the consolidated net profit for the year grew by 46.8% to Rs. 756.4 crores asagainst Rs. 515.2 crores in the previous financial year.

The Basic Earnings per Share (EPS) on a consolidated basis increased to Rs. 19.44 forthe financial year under review as compared to Rs. 13.24 for the previous financial year.

The Statement containing the salient features of the Financial Statements ofSubsidiaries and Associate Companies in the prescribed Form AOC 1 is appended as part ofthis report.

A detailed analysis on the financial performance of the Company is given as part of theManagement Discussion and Analysis report which forms part of this report.

Subsidiaries

As on March 31 2021 the Company has one direct and two step-down subsidiaries inIndia while in overseas it has two direct and fifty three step-down subsidiaries.

During the year under review the Company sold its entire shareholding in M/s. EnsureSupport Services (India) Limited ("Ensure") a wholly owned subsidiary of theCompany to M/s. Accel Limited. Ensure was in the business of providing after salessupport services including warranty and out-of-warranty services independently and onbehalf of Original Equipment Manufacturers (OEM) and other allied services. Since thisbusiness vertical was not strategic to the Company the entire shareholding in Ensure wasdivested on July 31 2020.

The details of the subsidiaries incorporated/acquired and ceased to be subsidiariesduring the financial year under review as applicable are given as part of notes to theconsolidated financial statements.

Dividend

On account of exemplary financial and business performance during the financial year2020-21 the Board had recommended a final dividend of Rs. 11.60 per equity share (i.e.580% of the Face Value) including one-time special dividend of Rs. 4 per equity share forthe approval of the shareholders. The Company had declared two interim dividends totalingRs. 4.30 per equity share (i.e. 215% of the Face Value) during the financial year 2019-20.

The dividend pay-out to the shareholders for the financial year under review subjectto approval by the shareholders is expected to be around Rs. 451.6 crores as compared toRs. 167.3 crores for the previous financial year.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended from time to time the Board has approved andadopted a Dividend Distribution Policy detailing the parameters to be considered by theBoard for recommendation or declaration of dividend. The Dividend Distribution Policy ofthe Company is available on the Company’s website and also enclosed as Annexure J tothis report.

BUSINESS PERFORMANCE

India business (Standalone)

Discussion on the Company’s Standalone business performance in India forms part ofthe Management Discussion and Analysis Report which is annexed to this Annual Report.

Indian Subsidiary - Proconnect Supply Chain Solutions Limited

ProConnect Supply Chain Solutions Limited (ProConnect) is the wholly owned Indiansubsidiary of Redington (India) Limited. ProConnect is a leading 3PL player providingcustomized tech-based supply chain solution to its clients. Today ProConnect hasestablished itself in the Indian integrated supply chain market with a robust distributionnetwork and reputed client base.

ProConnect has been on a consolidation mode to bring all its businesses under OneProConnect. In this direction Auroma Logistics Private Limited (erstwhile subsidiary) wasmerged with ProConnect under the Scheme of Amalgamation vide Order of Regulator datedJanuary 20 2021. This Order was effective from April 1 2020. The Board of Directors ofProConnect have considered and approved the proposal for merger of Rajprotim

Supply Chain Solutions Limited with ProConnect and the merger is currently underprocess.

During FY 2020-21 ProConnect also undertook the integration of its frontend andbackend operations by use of technology. It has been streamlining its focus into six keyverticals – IT and Telecom E-Commerce Healthcare and Pharma FMCG FMCD andValue-Added Services.

ProConnect foresees huge potential in the organized supply chain solutions market inIndia led by digitalization and government initiatives such as Atma Nirbhar BharatAbhiyaan and Make in India.

ProConnect aims to be a technology driven company and is geared up to become a premiumvertical specialist offering value added supply chain solutions.

Indian Associate

Redington (India) Investments Limited (RIIL) an associate company of Redington wasoperating Apple retail stores in South India through its wholly owned subsidiary CurrentsTechnology Retail (India) Limited (Currents). Since Currents was making continuous lossit has completely exited its business. Accordingly restructuring options includingproposal for winding up of RIIL and Currents is underway.

Overseas Operations

Redington’s overseas operations are carried out through its two wholly-ownedsubsidiaries Redington International Mauritius Limited Mauritius (RIML) and RedingtonDistribution Pte Limited Singapore (RDPL). The business performance of the two entitiesis covered in the Management Discussion and Analysis.

RIML address the Middle East Turkey Africa (META) region which contributes to 55.4%of the consolidated revenue of Redington. RIML continues to remain agile readjusting itsstrategy to meet the uncertainties and fast-changing market dynamics in the region. TheCOVID-19 pandemic has thrown open challenges as well as opportunities for the Company andthe business is realigning itself to remain relevant and focused. Some of the key trendsthat have emerged over the last year include strong push towards Cloud Enterpriseservices and Mobility.

RDPL addresses the South Asian region comprising of Sri Lanka Bangladesh Nepal andMaldives markets. With the changing business dynamics of its major customers RDPL hasbeen re-strategizing its market focus. There has been a shift in the business fromhardware to software subscription and services in the region. Moreover the change in thetaxation structure in India has led to OEMs/vendors changing their billing model fromdollars to Indian Rupees. This has impacted the business opportunities for RDPL that canbe done out of Singapore. However this has created new opportunities for our Indiadistribution business. Bangladesh and Sri Lanka are seen as the future growth markets forRDPL.

Overall the Enterprise business alongside demand for Cloud and Mobility services ledthe growth of Redington’s overseas business. Some of the key product segments thatsaw significant demand pull include network infrastructure Cloud Cyber securitysoftware and licensing. This demand was led by significant IT infrastructure and softwareupgrade spending by companies to fast track digital transformation in the wake of theCOVID-19 pandemic that disrupted supply chain and businesses across the region we operatein.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Upon the recommendations of Nomination and Remuneration Committee at the meeting heldon June 11 2020 the Board had approved the change in the role and responsibility of Mr.Ramesh Natarajan from "Joint Chief Operating Officer" to "Chief ExecutiveOfficer – India Distribution Business" with immediate effect.

The Board of Directors taking cognizance of recommendation of Nomination andRemuneration Committee about succession planning took the following decisions:

A. Mr. Raj Shankar (DIN: 00238790) Managing Director was elevated asVice-Chairman and Managing Director of the Company with effect from April 1 2021.

B. Mr. Rajiv Srivastava (DIN: 03568897) was appointed as Additional Director andJoint Managing Director for a period of five years with effect from April 2 2021subject to the approval of shareholders.

Based on the terms of appointment Mr. Tu Shu-Chyuan (DIN: 02336015) Non-ExecutiveDirector of the Company is liable to retire by rotation and being eligible has offeredhimself for re-appointment.

The resolutions for above appointment / reappointment are included in the Noticecalling for the Annual General Meeting. A Brief profile of the Directors recommended forappointment or reappointment are furnished as Annexure to the Notice.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Directors of the Companyafter due enquiry confirm that:

a) In the preparation of the annual accounts for the year ended March 31 2021the applicable accounting standards read with the requirements set out under ScheduleIII to the Act have been followed and there are no material departures from thesame;

b) The Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as atMarch 31 2021 and of the profit of the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities;

d) The Annual Accounts have been prepared on a ‘going concern’ basis;

e) The Directors have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and areoperating effectively; and

f) The Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

AUDITORS Statutory Auditors

At the 24th Annual General Meeting of the Company held on July 29 2017 the members ofthe Company had approved the appointment of M/s BSR & Co. LLP (BSR) CharteredAccountants (Firm Registration No. 101248W/W–100022) as Statutory Auditors of theCompany until 29th Annual General Meeting of the Company.

The Statutory Auditors have issued their reports on the Standalone and ConsolidatedFinancial Statements of the Company and these are appended here to this report. TheStatutory Auditors’ Reports on the Standalone and Consolidated Financial Statementsdo not contain any qualifications reservations or adverse remarks.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act 2013 read with relevantrules made thereunder the Company had appointed M/s. R Bhuvana & AssociatesPractising Company Secretary to conduct secretarial audit of the Company. The secretarialaudit report in Form MR-3 is enclosed as Annexure G to this report. There are noqualifications reservations or adverse remarks made by the Secretarial Auditor in herreport.

During the year under review neither the Statutory Auditors nor the SecretarialAuditor have reported any instances of fraud committed against the Company to theBoard/Audit Committee under Section 143(12) of the Companies Act 2013.

Cost records and Cost Audit

Maintenance of Cost Records and requirement of Cost Audit as prescribed under Section148(1) of the Companies Act 2013 are not applicable for the business activities carriedout by the Company.

OTHER REPORTS

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015reports on the Corporate Governance Business Responsibility and Management Discussion andAnalysis are attached to this Annual Report

DISCLOSURES

Board and its committees

The details of the composition of the Board and its committees and various meetingsheld during the financial year are given in the Report on Corporate Governance that formspart of this Annual Report.

Independent Director Declaration

All the Independent Directors of the Company have given declaration that they fulfil"independence" criteria stipulated in the Companies Act 2013 and Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.

Internal Financial Controls

The Company has prepared a comprehensive document on Internal Financial Controls (IFC)in line with the requirements under the Companies Act 2013 which included Entity LevelControls (ELC) Efficiency Controls Risk Controls Fraud Preventative ControlsInformation Technology General Controls (ITGC) and Internal Controls on FinancialReporting (ICFR). A brief note on IFC including ICFR is enclosed to this Report asAnnexure A.

The Company has adopted policies and procedures for ensuring orderly and efficientconduct of its business including safeguarding of its assets prevention and detection offraud error reporting mechanism and ensuring accuracy and completeness of financialstatements. Based on the results of assessments carried out by Management no reportablematerial weaknesses or significant deficiencies in the design or operation of internalfinancial controls were observed. The Board opines that the internal controls adopted andimplemented by the Company for preparation of financial statements are adequate andsufficient.

Risk Management

The Risk Management Committee monitors the Risk management practices of the Company.The Committee meets periodically and reviews the potential risks associated with theCompany’s business and discusses steps taken by the management to mitigate the same.

The Board of Directors reviewed the risk assessment and procedures adopted by theCompany for risk control and management and is of the opinion that there are no riskswhich may threaten the existence of the Company.

Details of Employee Benefit Scheme

During the year 131522 equity shares of Rs. 2/- each were allotted to employeesincluding employees of Subsidiary Companies under Redington Stock Appreciation RightScheme 2017.

The disclosure as required under Regulation 14 of SEBI (Share Based Employee benefits)Regulations 2014 is enclosed to this Report as Annexure B. A Certificate from theStatutory Auditors of the Company will be made available during the Annual General Meetingstating that Redington Stock Appreciation Right Scheme 2017 have been implemented inaccordance with SEBI (Share Based Employee benefits) Regulations 2014 and as per theresolutions passed by the shareholders.

Information on Conservation of Energy and Technology Absorption

A. Conservation of Energy:

The operations of your Company involve low energy consumption. Adequate measureshave however been taken to conserve energy by way of optimizing usage of powerand virtualization of Data Centre.

B. Technology Absorption:

Effort made towards technology absorption:

Your Company continues to use the latest technologies for improving the qualityof services it offers. Digitalization and adoption of cloud technologyvirtualization and mobility resulted in better operational efficiencies andTurnaround Time (TAT). Business Intelligence (BI) and Analytics facilitate keydecisions and improves process efficiency. During the Pandemic your company hasseamlessly and securely able to shift to Work from Home model and have beenable to provide all Employees with relevant technology tools and connectivity tocarry out the work without any interruption.

Import of Technology:

The Company has not imported any technology during the year.

C. Expenditure on Research and Development:

Since your Company is involved in the Wholesale Distribution of TechnologyProducts there is no expenditure incurred on research and development.

Foreign Exchange earnings and outgo

The details of Foreign Exchange earnings and expenditure during the year aregiven below:

Earnings in Foreign Currency:

Particulars Rs. in Crores
Rebates & discount 101.6
FOB value of exports 0.3
Others 0.4
Total 102.3

Expenditure in foreign currency:

Particulars Rs. in Crores
CIF value of imports 3016.7
Royalty (cost of software included under purchase) 12.7
Director's sitting fee 0.1
Director's commission 0.6
Others 3.2
Total 3033.3

Policy on Appointment and Remuneration of Directors The Board on therecommendation of the Nomination and Remuneration Committee has laid down a policy onappointment of Directors and remuneration for the Directors Key Managerial Personnel andOther Employees. The current policy is to have an appropriate mix of executivenon-executive and independent directors to maintain independence of the Board and separateits functions of governance and management. The same is enclosed to this report asAnnexure C.

Performance evaluation of the Board and Committees

The evaluation of all the Directors Committees and the Board as a whole was conductedbased on the criteria and framework approved by Nomination and Remuneration Committee. Thedetails of annual evaluation made by the Board of its own performance and that of itscommittees and individual Directors and performance criteria for Independent Directorslaid down by Nomination and Remuneration Committee are enclosed to this report as AnnexureD.

Particulars of Employees

The Particulars of employees required under Section 197 (12) of the Companies Act 2013and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given in Annexure E appended hereto and forms part of this report.

Particulars of Loans given Investments made Guarantees given and Securitiesprovided

Particulars of loans given and investments made are given under Notes 17 and 8respectively to the Standalone Financial Statements. The Company has neither givenguarantees nor provided security under Section 186 of the Companies Act 2013.

Corporate Social Responsibility

Redington primarily carries out Corporate Social Responsibility (CSR) activitiesthrough its trust Foundation for CSR @ Redington by supporting its projects in the areasof education employability skills training for the underprivileged and specially abledhealthcare and environmental sustainability. The Corporate Social Responsibility

Committee has formulated and recommended to the Board a policy on CSR indicating theactivities to be undertaken by the Company. The Report on CSR is enclosed as Annexure F tothis report.

Vigil Mechanism

The Company believes in the conduct of affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behavior. The Company has implemented a vigil mechanism/ whistle blowerpolicy to provide a framework for the Company’s employees and Directors to promoteresponsible and secure whistle blowing in the organization across levels. It also providesprotection to whistle blowers who raise concerns on serious irregularities within theCompany. The details of establishment of vigil mechanism are made available in the websiteof the Company. A brief summary of the vigil mechanism implemented by the Company isenclosed to this report as Annexure H.

Extract of Annual Return

Annual Return of the Company is available in our website under Shareholders’information.

Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of the Companies Act 2013 read with Investor Education andProtection Fund [IEPF] Authority (Accounting Audit Transfer and Refund) Rules 2016 theCompany is required to transfer the unpaid or unclaimed dividend and shares in respect ofwhich dividend entitlements are remaining unpaid or unclaimed for a period of sevenconsecutive years or more by any shareholder to IEPF. Accordingly the Company hastransferred the unclaimed dividend of Rs. 32029 to the IEPF and 519 shares to the demataccount of the IEPF authority. The details of the shares due to be transferred to IEPFduring the financial year 2021-22 is available in our website under Shareholders’information.

Others

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations infuture.

The Company has not received any deposits as defined under the Companies Act 2013during the financial year under review.

The Board decided not to transfer any profit to general reserve.

None of the transactions with related parties falls under the scope of section 188(1)of the Act. Information on transactions with related parties pursuant to section134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules2014 are given in Annexure I in Form AOC-2.

There are no material changes and commitments affecting the financial position of theCompany which have occurred between March 31 2021 and the date of thisreport.

The Company has complied with applicable secretarial standards.

Web links

Particulars Web link
Policy on Related Party Transaction https://redingtongroup.com/wp-content/uploads/2018/12/Policy-on-dealing-with-Related- Party-Transactions.pdf
Policy for determining Material Subsidiaries https://redingtongroup.com/wp-content/uploads/2019/04/Policy-on-dealing-with-Material- subsidiaries-final.pdf
Details of Familiarization Programmes https://redingtongroup.com/wp-content/uploads/2018/12/Familiarisation-programme.pdf
Criteria of Making payment to Non- Executive Directors https://redingtongroup.com/india/wp-
content/uploads/sites/4/2018/05/PolicyonpaymenttoDirectors.pdf
Policy on appointment of Directors and remuneration for the Directors Key Managerial Personnel and Other Employees https://redingtongroup.com/wp-content/uploads/2018/12/NOMINATION-AND-
REMUNERATION-POLICY.pdf
Details of establishment of Vigil mechanism https://redingtongroup.com/india/wp-
content/uploads/sites/4/2018/05/DetailsofVigilMechanismestablishedbytheCompany.pdf
Dividend Distribution Policy https://redingtongroup.com/india/wp-
content/uploads/sites/4/2018/05/DividendDistributionPolicy.pdf
Annual Return for FY 2020-21 https://redingtongroup.com/wp-content/uploads/2021/07/Annual-Return.pdf

COMPLIANCE WITH OTHER REGULATIONS

Downstream Investment

With regard to the downstream investments in Indian Subsidiaries the Company is incompliance with applicable Rules and Regulations of Foreign Exchange Management.

Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013

Your Company has constituted Internal Complaints Committees as required under SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 toconsider and resolve all sexual harassment complaints. Your Company has framed a policy onSexual Harassment of Women to ensure a free and fair enquiry process on complaintsreceived from the women employee about Sexual Harassment also ensuring complete anonymityand confidentiality of information. Adequate workshops are conducted and awareness on thepolicy is also created by sending group mailers to the employees. No complaint wasreported by any employee pertaining to Sexual Harassment during the year under review.

ACKNOWLEDGMENT

Your Directors take this opportunity to gratefully acknowledge the co-operation andsupport received from the shareholders including the principal shareholders suppliersvendors customers bankers business partners / associates channel partners bankersfinancial institutions Regulatory / Government authorities to the Company. The Directorsrecord their appreciation for the contributions made by employees of the Company itssubsidiaries and associates for their hard work and commitment towards the success ofthe Company. Their dedication and competence has ensured that the Company continues to bea significant and leading player in the industry.

On behalf of the Board of Directors
J. Ramachandran
Place: Bengaluru Chairman
Date: May 27 2021 DIN: 00004593

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