The Board of Directors of your Company take pleasure in presenting the Eleventh AnnualReport together with the Balance Sheet and Statement of Profit and Loss for the financialyear ended 31st March 2019.
1. Financial Results (Standalone and Consolidated):
(Rupees in Lakhs)
|Particulars || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations ||69963.39 ||62622.74 ||71570.16 ||64368.66 |
|Profit Before Depreciation and Tax ||4365.43 ||1681.84 ||4790.53 ||2033.22 |
|Less: Depreciation for the year ||99.46 ||106.43 ||126.57 ||142.39 |
|Profit Before Tax (PBT) ||4265.97 ||1575.41 ||4663.96 ||1890.83 |
|Less: Exceptional item ||529.03 ||- ||529.03 ||- |
|Less: Tax Expense ||1381.76 ||533.43 ||1490.36 ||621.60 |
|Add: Comprehensive income ||(0.07) ||77.23 ||4.87 ||94.95 |
|Profit After Tax ||2354.48 ||1119.21 ||2649.44 ||1364.18 |
|Earnings per Share (?) ||6.63 ||2.93 ||7.45 ||3.57 |
The financial statements for the year ended on 31st March 2019 have beenprepared in accordance with the Indian Accounting Standards (IND AS) notified underSection 133 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014. Theestimates and judgements relating to the Financial Statements are made on a prudent basisso as to reflect in a true and fair manner the form and substance of transactions andreasonably present the Company's state of affairs profits and cash flows for the yearended 31st March 2019.
2. State of Company's Affairs:
During the financial year 2018-19 your Company posted standalone gross revenue of Rs69963.39 lakhs as compared to Rs 62622.74 Lakhs in the previous year. The standaloneprofit before depreciation and tax stood at Rs 4365.43 lakhs as compared to Rs 1681.84Lakhs in the previous year.
During the year under review the Company has earned higher profit before tax comparedto the previous year due to various cost reduction and efficiency improvement measurestaken during the year.
During the year under review there is no change in nature of business.
The consolidated financial statements of your Company for the financial year 2018-19are prepared in compliance with applicable provisions of the Companies Act 2013 Ind ASAccounting Standards and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The audited consolidated financial statement is provided in the AnnualReport.
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.
3. Dividend and Reserves:
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 Rs1/- per share for the year ended 31st March 2019 (i.e. @50% on the paid-upequity capital) to be paid if approved at the Eleventh Annual General Meeting.
4. Share Capital:
During the year under review the total paid-up share capital of the Company stood at'71009700/- consisting of 35504850 equity shares of Rs 2/- each.
5. 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 2019 inForm MGT-9 is enclosed as Annexure I to this report. The copy of the annual returnis available on the website of the company under the weblinkhttp://www.dlink.co.in/corporate/investor/
6. Directors and Key Managerial Personnel:
a) Changes in Directors and Key Managerial Personnel (KMP)
During the year under review;
(i) Ms. Anny Wei [DIN 08044045]- Non-Executive Chairman of the Company retired at theprevious Annual General Meeting held on 3rd August 2018.
(ii) Mr. Rajaram M. Ajgaonkar [DIN 00605034] was re-appointed as Independent Directorwith effect from 1st April 2019 for a second term of 5 consecutive yearssubject to passing special a resolution by the members of the Company.
(iii) Mr. Satish V Godbole [DIN No. 02596364] was re-appointed as Independent Directorwith effect from 1st April 2019 for a second term of 5 Consecutive yearssubject to passing a special resolution by the members of the Company.
b) Details of Directors retiring at the ensuing Annual General Meeting (AGM)
(i) Mr. Hung-Yi Kao (Howard Kao) (DIN:08190631) was appointed as additional directoron the board designated as Non-Executive Chairman of the Company effective August 4 2018.Mr. Kao holds office upto the date of ensuing Annual General Meeting. His appointment asthe Director of the Company liable to retire by rotation requires approval of themembers.
(ii) In pursuance of section 152 of the Companies Act 2013 at-least two-thirds of theDirectors (excluding Independent Directors) shall be subject to retirement by rotation.One-third of such Directors must retire from office at each AGM and a retiring director iseligible for re-election.
Accordingly Mr. Tushar Sighat [DIN 06984518] retires by rotation and being eligibleoffers himself to be re-appointed at the ensuing AGM. The Board of Directors of yourCompany recommends his re-election.
c) Key Managerial Personnel
The following are the Key Managerial Personnel of the Company:
1. Mr. Tushar Sighat - Managing Director & CEO
2. Mr. C. M. Gaonkar - Chief Financial Officer
3. Mr. Shrinivas Adikesar - Company Secretary
d) 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 Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
7. 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. The Company has complied with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India.
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 16thMarch 2019 for transacting the business enumerated under said provisions.
8. Annual Evaluation of Board:
In pursuance of section 134 (3) (p) of the Companies Act 2013 read with rules madethereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board of Directors carried out the performance evaluation of the Board as awhole and of its Committees and individual directors. A structured questionnaire wasprepared after taking into consideration the various aspects of the Board's functioningcomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance etc.
The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors and Non-Executive Directors. Directors heldseparate discussions with other Directors of the Company and obtained their feedback onoverall Board effectiveness as well as performance of each of the other Directors. TheBoard of Directors took note of the observations on board evaluation carried out duringthe year and regarded as no action is required to be taken.
9. 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 the majority being Independent Directors including theChairman of the Committee. The terms of reference of Audit Committee are as mentioned inSection 177 of the Companies Act 2013 and part C of Schedule II ofthe SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The detailed terms ofreference constitution and other relevant details of Audit Committee have been given inthe Corporate Governance 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 2018-19.
10. 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 the 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 and executive directors of the Company as well asother relevant 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" tothis Report.
11.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 the Stakeholders Relationship Committee. The detailed terms of referenceconstitution and other relevant details of the Stakeholders Relationship Committee hasbeen given in the Corporate Governance Report forming part of this Annual Report.
12.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 Vigil Mechanism/ Whistle Blower Policy has beenposted and is available on the website of the Company athttp://www.dlink.co.in/pdf/Whistle%20Blower%20Policy.pdf
During the year under review the Company through the Audit Committee has not receivedany complaints relating to unethical behavior actual or suspected fraud or violation ofcompany's code of conduct from any employee or directors.
13. 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 monitor aRisk Management Policy from time to time. The objective of the Risk Management Policy isto identify the risks impacting the business and to formulate strategies / policies aimedat risk mitigation as part of risk management.
14. Details of Subsidiary Company:
TeamFI Networks Private Limited (TeamFI) is a provider of networking and securitysoftware for embedded devices with immense experience. TeamFI provides network securityWiFi management CPE turn-key and component software using platform TFOS. TeamFINetworks specializes in developing high-performance networking and security softwareproducts which help in future-proofing the digital network connectivity and securityroadmap for embedded devices.
TeamFI network security solutions empower wired and wireless devices world-wide forsmall and medium businesses and residential networks. This includes applications rangingfrom business security gateways UTM firewalls and network storage devices to homegateways and service provider routers. The completely customized solutions of TeamFINetworks encompass the breadth of requirements for securely connecting devices: fromhigh-performance routing stacks hardware-accelerated security protocols to intuitivedevice management bridging the gap between demand and supply in the network securityspace.
TeamFI's standalone financial statements show gross revenue of Rs 1639.77 lakhsas compared to Rs 1749.42 lakhs in the previous fiscal year. The profit before taxstood at Rs 294.96 lakhs as compared to Rs 244.97 lakhs in the previousfiscal year.
The Company does not have any material unlisted Indian subsidiary. The Company hasformulated a Policy on Material Subsidiary as required under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and the policy is posted on the website of theCompany under the web link athttp://www.dlink.co.in/pdf/Material%20Subsidiary%20Policy.pdf
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 the statement containing salient features of the financialstatements of the Company's Subsidiary (in Form AOC-1) is enclosed as Annexure - III tothis report.
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 the Company had appointed M/s B S R & Co. LLP CharteredAccountants (ICAI firm registration no. 101248W/W-100022) (BSR') as the StatutoryAuditors of the Company for a period of 5 years commencing from the conclusion of 10thAGM till the conclusion of 15th AGM.
However in accordance with the amendment to the provisions of Section 139 of CompaniesAct 2013 the ratification of the appointment of Statutory Auditors at every AnnualGeneral Meeting has been omitted and therefore the ratification of appointment ofStatutory Auditors is not being sought.
16. Cost Audit:
During the relevant period for the purpose of Section 148 of Companies Act 2013 readwith the rules made thereunder maintaining of the Cost Accounting records were notapplicable considering the turnover of manufacturing activity.
17. 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 2018-19 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. There is no qualification reservation or adverseremark in secretarial audit report made during the financial year.
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.
19. Particulars of Loans Guarantees or Investments:
During the year the company has not granted loans and given guarantees madeinvestments or provided securities that are covered under the provisions of Section 186 ofthe Companies Act 2013.
20. 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 of theproducts are imported from D-Link Corporation and its Subsidiaries. All the transactionsentered by the Company with Related Parties were in the Ordinary Course of Business and atArm's Length price basis. The Audit Committee and the Board of Directors reviewed thetransactions (which are repetitive in nature) and the Audit Committee granted approval forsuch transactions.
The disclosures as required under IND-AS have been made in Note 38 to the standalonefinancial statements. The particulars of contracts or arrangements entered by the Companywith related parties referred to in sub-section (1) of section 188 of the Companies Act2013 have 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:
21. 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 2018-19. In the opinion of the Board the existinginternal control framework is adequate and commensurate to the size and nature of thebusiness of the Company.
22. 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.
23. 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 an InternalCommittee as per the requirements of the above Act.
During the financial year 2018-19 the committee has neither received any complaintsnor were any cases pending as at 31st March 2019.
24. 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 31 forming part of theStandalone Financial Statements.
25. 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 a CSR Policy in accordance with the Act.
The Company was required to spend Rs 53.36 lakhs for the Financial Year 2018-19 towardsCorporate Social Responsibility (CSR) activities.However the Company has spent Rs 45.00lakhs during the financial year ended March 2019.
During the year under review the amount spent by the Company on the CSR activities isless than the prescribed amount under the Companies Act 2013. The Company's CSRinitiatives usually involve study of various projects at a small scale to learn fromon-ground realities getting feedback from community and then putting an enhancedsustainable model to ensure maximum benefit to the community. For this reason during theyear the Company's spend on the CSR activities has been less than the limits prescribedunder Companies Act 2013. The CSR activities are scalable which coupled with newinitiatives that may be considered in the future will ensure that the Company spendsa CSRamount in accordance with the prescribed limits.
The details relating to Corporate Social Responsibility (CSR) are set out in Annexure-VI.
The CSR Policy of the Company has been posted on the website of the Company athttp://www.dlink.co.in/pdf/CSR%20Policy.pdf
26. Details of Significant and Material Orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in the 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.
27. 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 the Annual Report.
28. Corporate Governance:
As required under Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the report on Corporate Governance as well as theAuditorsRs Certificate regarding compliance of conditions of Corporate Governance forms apart of the Annual Report.
29. DirectorsRs 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 2019 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 2019 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 its customers vendors andinvestors for their continued support.
| ||For and on behalf of the Board of Directors || |
| ||Tushar Sighat ||Satish Godbole |
| ||Managing Director & CEO ||Director |
|Mumbai Dated: 25th May 2019 ||DIN 06984518 ||DIN 02596364 |