This year we undertook a major restructuring exercise of the company keeping in viewour vision and strategic priorities for ensuring focused growth in all our core businessesand tapping opportunities for each of these businesses.
The year under review has been a most significant one as we undertook a majorrestructuring exercise of the company. This was done keeping in view our vision andstrategic priorities for ensuring focused growth in all our core businesses and tappingopportunities for each of these businesses. This has therefore been a milestone year foryour company.
The restructuring exercise has been discussed in detail in the Management Discussions& Analysis section of the annual report but I would like to share with you therationale that led us to this decision.
As you are aware Smartlink Network Systems Ltd. operated as an integrated ITnetworking products company engaged in the marketing of Digisol' brand productssourced from OEM suppliers worldwide as well as manufactured in-house in its ownstate-of-the-art facilities at Goa.
Over the years the business of networking products has become fiercely competitivewith a large number of players in the different segments of business. It becomesincreasingly difficult and unwieldy for one company to handle both manufacturing as wellas marketing of the active range as well as the passive range of products and deliver ahigh level of innovation quality and service to the consumer. The breadth of technologyhas also become huge and in every product category technology changes at a rapid pace.Further the designing and manufacturing of products call for different skill sets thanthose required for marketing sales and service of products.
Brand building requires a sharp focus as well as deep understanding of consumerbehavioural patterns.
We realized that it would be virtually impossible to deliver a full range of solutionsthat customers need at the pace that the market requires unless we have strong focus ineach segment. It was therefore important to have distinct identities in marketing andsales for branded products and in our manufacturing activity of active as well as passiverange of products.
Many opportunities lie before us and it was important that we made the right move toenable us to focus better on delivering the products and solutions that our customerswant. Hence we have restructured our operations as below:
1. We have incorporated three wholly owned subsidiary companies viz. Digisol SystemsLtd. (DIGISOL) Synegra EMS Ltd. (SYNEGRA) and Telesmart SCS Ltd.
Digisol Systems Ltd. will carry on the business of marketing and sales of variousNetworking and Information Technology - Active and Passive products under the brandDIGISOL which is a well established brand today with its own R&D and testing Lab.
Synegra EMS Ltd. will carry on the business of Electronic Manufacturing Services (EMS)of various categories of Active Networking and Information Technology products. It will bea general purpose manufacturing company and act as OEM supplier to brand companiesincluding Digisol.
Telesmart SCS Ltd. will carry on the business of passive range of products in copperand fiber used in cabling systems often referred to as structured cabling products.
2. The second step involved the slump sale of Smartlink's existing businesses to thewholly owned subsidiaries on a slump sale basis as a going concern. As a result theDigisol business of brand building marketing and sales of active networking products hasbeen transferred to Digisol Systems Ltd. and the EMS business has been transferred toSynegra EMS Ltd.
3. The final step of this restructuring involved making an application to Reserve Bankof India by Smartlink for registration of the Company as a Non Banking Financial Company(NBFC) (Non-Deposit taking) as Smartlink is left with only financial assets and the incomeit would generate from its investments.
To summarise Smartlink Network Systems Ltd. is a holding Company with three whollyowned subsidiaries - DIGISOL SYNEGRA and TELESMART each of them specializing in theirown businesses.
This restructuring will enable each of the subsidiaries to focus on their respectivebusiness and drive our future growth. We have seen that when companies focus intensely ina well defined core business area they become very successful and deliver greater valueto their customers. As a result of this strategy each of the subsidiaries will be wellplaced to deliver a family of products that best empower their customers.
Over the years we have delivered many great products and have had much success in themarketplace. In many ways we have redefined the Indian networking space and pioneered thebuilding of an indigenous brand in a marketplace which valued only MNC brands.
Going forward each subsidiary will have its own strategy which will mean betterexecution from product conceptualization and innovation right through manufacturingmarketing and sales. Each subsidiary will remain disciplined and focused on continuing todrive operational efficiencies and productivity to achieve profitable growth.
The new structure will improve our competitive position increase efficiency andenhance our ability to bring innovation and affordable solutions to our customers. Thesubsidiaries will accomplish all this while maintaining their unwavering commitment to ourcore values and high ethical standards. And we will continue our long standing commitmentto be a responsible employer and a good corporate citizen fostering diversity andproviding a safe workplace implementing sustainability initiatives and supportingeducational environmental and other initiatives.
We believe we have an opportunity to chart a new course for our shareholders. We aretransforming our business model and evolving our organization and our culture so that wecan move quickly and the subsidiaries can focus on their strategic priorities. We areexcited to build on the momentum of the past and the promise of the future.
I would conclude by extending my sincere gratitude to my colleagues on the Board fortheir continued guidance all the employees of Smartlink and its three subsidiaries fortheir unstinted dedication and commitment and stakeholders associates customers andfriends for their whole hearted support in all our endeavours.
I must express my special thanks to our investors and shareholders who have alwaysreposed their confidence in us. I would like to assure every one of them that their faithin us will continue to be rewarded in the years ahead.
|K. R. Naik |
|Executive Chairman |
|DIN: 00002013 |