MIRA
INFORM REPORT
|
Report Date : |
23.01.2007 |
IDENTIFICATION
DETAILS
|
Name : |
D-LINK
INDIA LIMITED |
|
|
|
|
Registered Office : |
L-5, Verna
Electronic City, Verna Plateau, Goa - 403 722 |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2006 |
|
|
|
|
Date of Incorporation : |
13.03.1993 |
|
|
|
|
Com. Reg. No.: |
1341 |
|
|
|
|
CIN No.: [Company Identification No.] |
L30007GA1993PLC001341 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
BLRD03177G |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACD5159L |
|
|
|
|
Legal Form : |
Public limited liability company. The company's shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturers
and Marketers of Networking Products and Modems |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD
7000000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well-established company having satisfactory track. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
|
Registered Office : |
L-5, Verna Electronic
City, Verna Plateau, Goa - 403 722, India |
|
Tel. No.: |
91-832-2783393/94/2783396/2783411 |
|
Mobile No.: |
91-832-2783395 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate
Office : |
D- Link House, Plot No. 5, Bandra Kurla Complex Road, Off. CST Road, Santacruz (East), Mumbai - 400 098, Maharashtra |
|
Tel.
No.: |
91-22-2656 6696 / 6578 / 6623 |
|
Fax
No.: |
91-22-2652 8914 / 8476 |
|
E-Mail
: |
|
|
|
|
|
Factory
1 : |
L-5, Verna Electronic City, Verna Plateau, Goa - 403 722, India |
|
Tel.
No.: |
91-834-2783394 / 2783411 |
|
Fax
No.: |
91-834-2783395 |
|
E-Mail
: |
|
|
|
|
|
Software
and R&D Centre : |
# 65,
35th Main, 100 ft. Ring Road, 2nd Stage, BTM Layout,
Bangalore-560076, Karnataka, India |
|
|
|
|
Branches
: |
Located at:- Ø Ahmedabad, Gujarat Ø Kolkata, West Bengal Ø Goa Ø Lucknow, Uttar Pradesh Ø New Delhi Ø Secunderabad, Andhra Pradesh Ø Bangalore, Karnataka Ø Chennai, Tamilnadu Ø Indore, Madhya Pradesh Ø Mumbai, Maharashtra Ø
Pune, Maharashtra |
|
|
|
|
Overseas
Offices : |
D-Link Australia D-Link Australia Pty. Limited Fax: 61-2-8899-1868 Web/E-mail: http://www.dlink.com.au D-Link Benelux D-Link (Netherlands) B.V., Weena 290,
3012NJ Rotterdam, Netherlands Fax:
31(0)10 282 1331 Web/E-mail: http://www.dlink-benelux.com D-Link Brasil Av das Nações Unidas, 11857, cj 132 -
Brooklin Novo, São Paulo - SP – Brazil- 04578-000 Telephone: 55-11- 550 39320 Fax : 55-11- 550 39321 Web/E-mail: http://www.dlink.com.br D-Link Canada D-Link Canada Inc. Fax: 1-905-829-5095 Web/E-mail: http://www.dlink.ca D-Link China Fax: 86-10-8518-2250 Web/E-mail: http://www.dlink.com.cn D-Link Denmark Fax : 45
43 42 43 47 Web/E-mail: http://www.dlink.dk D-Link Finland Fax: 358 9 2707 5081 Web/E-mail: http://www.dlink-fi.com D-Link France Fax: 33-1-30238689 Web/E-mail:http://www.dlink.fr D-Link Germany D-Link Central Europe / (Deutschland) GmbH
Schwalbacher StraBe 74 Fax:49-6196-7799-300 Web/E-mail: http://www.dlink.de D-Link Iberia (Spain and Portugal) C/Sabino De Arana, 56 Bajos 08028
Barcelona Spain Fax: 34 93 491 0795 Web/E-mail: http://www.dlink.es / info@dlink.es D-Link India D-Link India Limited Telephone:91- 022 - 2652 6696 / 56902210 Fax:91- 022 - 2652 8914 / 8476 Web/E-mail:http://www.dlink.co.in D-Link Israel Fax:972-9-9715601 Web/E-mail:http://www.dlink.co.il D-Link Italy D-Link Mediterraneo Srl Via Nino Bonnet,
6/B 20154 Milano VAT. 3157900153 Fax:39-2-2900-1723 Web/E-mail:http://www.dlink.it / sales@dlink.it D-Link Japan Fax:81-3-5434-9868 Web/E-mail:http://www.d-link.co.jp D-Link Middle East (Egypt) Fax:202-415-6704 Web/E-mail:http://www.dlink-me.com D-Link Norway Fax: 47 22 30 90 85 Web/E-mail: http://www.dlink.no D-Link Russia Fax:7-095-744-00-99#350 Web/E-mail:http://www.dlink.ru / support@dlink.ru D-Link Singapore D-Link International Pte. Limited Fax: 65-6774-6322 Web/E-mail:http://www.dlink-intl.com D-LINK South Africa Fax: 27(0)1266-52186 Web/E-mail: http://www.d-link.co.za D-Link Latin America Fax: 56-2-232-0923 Web/E-mail:http://www.dlink.cl D-Link Middle East (Dubai) D-Link Middle East Telephone:971-4-3916480 Fax:971-4-3908881 Web/E-mail:http://www.dlink-me.com D-Link Sweden Fax:46-(0)8564-61901 Web/E-mail: http://www.dlink.se D-Link Taiwan Fax:886-2-2910-1515 Web/E-mail:http://www.dlink.com.tw D-Link Turkey Fax:90 212 2897606 Web/E-mail:http://www.dlink.com.tr D-Link United Kingdom (Europe) D-Link (Europe, U.K.) Limited Fax:44-020-8731-5511 Web/E-mail:http://www.dlink.co.uk D-Link United States of America D-Link Systems, Inc. Fax:1-866-743-4905 Web/E-mail:http://www.dlink.com D-Link Headquarters D-Link Corporation Telephone:886-2-2916-1600 Fax:886-2-2914-6299 Web/E-mail:http://www.dlink.com.tw |
DIRECTORS
|
Name : |
Mr. Kamalaksha Rama Naik |
|
Designation : |
Chairman & Managing Director |
|
Date of Birth/Age : |
56 Years |
|
Qualification : |
D. M. E., P. G. Diploma in Industrial Engineering, Diploma in Business Management |
|
Experience : |
28 Years |
|
Date of Appointment : |
31.03.1993 |
|
Other Directorships : |
Virtual Computers Private Limited – Director (8 Years) |
|
|
|
|
Name : |
Mr. A. P. Chen |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Tony An-Pang Tsao |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. K. M. Gaonkar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Dattaraj Salgaocar |
|
Designation : |
Additional
Director |
|
|
|
|
Name : |
Mr.
Chandrasekhar Kopparapu |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr.
Pankaj Baliga |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. R.
T. Krishnan |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name
: |
Mr. K. Guruprasad Prabhu |
|
Designation
: |
Company Secretary |
|
|
|
|
Name : |
Mr.
Dharmendra Kumar |
|
Designation : |
Director
– Enterprise Sales |
|
|
|
|
Name : |
Mr.
Bhushan Prabhu |
|
Designation : |
Director
- Finance |
|
|
|
|
Name : |
Mr.
Shayam Anaokar |
|
Designation : |
Director
- HR |
|
|
|
|
Name
: |
Mr. Prabodh Vyas |
|
Designation
: |
Director (Sales) |
|
|
|
|
Name : |
Mr. J. V. Avadhanulu |
|
Designation : |
Director (R&D) |
|
|
|
|
Name : |
Mr. C. M. Gaonkar |
|
Designation : |
Director – Corporate Affairs |
|
|
|
|
Name : |
Mr. K. V. S. S. S. Gunneswara Rao |
|
Designation : |
Director (ISP and Telecom) |
|
|
|
|
Name : |
Mr. Nitin Kunkolienker |
|
Designation : |
Vice President – Commercial and Administration |
|
|
|
|
Name : |
Mr. Vinay Rane |
|
Designation : |
General Manager – Production |
|
|
|
|
Name : |
Mr. Milind Tamhane |
|
Designation : |
Vice President - Manufacturing |
|
|
|
|
Name : |
Mr. Deepak Chodanker |
|
Designation : |
Vice President – R&D |
|
|
|
|
Name : |
Mr. Shridhar Kadam |
|
Designation : |
Vice President – Product Engineering |
|
|
|
|
Name : |
Mr. Rajaram Jadhav |
|
Designation : |
General Managaer – Pre Sales/Tech Support |
|
|
|
|
Name : |
Mr. Tushar Sighat |
|
Designation : |
Vice President – Channel Business |
|
|
|
|
Name : |
Mr. Shekhar Kulkarni |
|
Designation : |
General Manager – Sales (Central Areas) |
|
|
|
|
Name : |
Mr. Yogesh Sharma |
|
Designation : |
General Manager – Sales (North) |
|
|
|
|
Name : |
Mr. Venkatesh Kamath |
|
Designation : |
General Manager – Sales (South) |
|
|
|
|
Name : |
Mr. Vikas Pinjarkar |
|
Designation : |
General Manager – SCS |
|
|
|
|
Name : |
Mr. Aravindan S. |
|
Designation : |
Vice President – R&D |
|
|
|
|
Name : |
Mr. Vijay Rane |
|
Designation : |
Vice President – Manufacturing – (Active) |
MAJOR SHAREHOLDERS
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Promoters Holdings |
|
|
|
Indian
Promoters |
7815528 |
26.05 |
|
Persons
acting in concert |
11186247 |
37.28 |
|
Non Promoters Holdings |
|
|
|
Mutual
Funds |
868043 |
2.89 |
|
Banks |
153.291 |
0.51 |
|
FII’s |
2364271 |
7.88 |
|
Private
Corporate Bodies |
1859644 |
6.20 |
|
Indian
Public |
4891108 |
16.30 |
|
NRI/
OCB’s |
225106 |
0.75 |
|
D-Link
(India) Limited ESOP Trust |
546500 |
1.82 |
|
Any
Other |
95112 |
0.32 |
|
Total |
30004850 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers
and Marketers of Networking Products and Modems |
||||||||
|
|
|
||||||||
|
Products : |
Ø Networking Products Ø Internetworking Products Ø Mother boards Ø Structured Cabling Products Ø Digital Home Products Ø NIC/ Adapters Ø Hubs Ø Switches Ø Modems Ø Internet Servers Ø Print Servers Ø Broadband Ø Internet and digital peripherals Ø LCD Monitors Ø Routers and RAS Ø Security Ø Transceivers/ Convertors Ø VOIP Ø Camera Ø ISDN Ø Mainboards Ø USB Ø Wireless Ø UPS and Inverter
|
GENERAL
INFORMATION
|
Suppliers : |
Ø
Almik
Arts Ø
Astra
Metal Systems Private Limited Ø
Dotline
Graphics Ø
Herald
Publications Private Limited Ø
Karlai
Industries Ø
Modern
Plastic Industries Ø
Sharvani
Plastics Industries Ø
Shree
Ashapura Industries Ø
Vinayak
Industries |
|
|
|
|
Bankers : |
Ø HDFC Bank Ø Bank of India Ø State Bank of India Ø Global Trust Bank Ø Citi Bank |
|
|
|
|
Facilities : |
Secured Loans : Other loans and advances Dues
under hire purchase agreements – Rs.9.566 millions (Secured
by hypothecation of assets purchased under hire purchase agreements) |
|
|
|
|
Banking Relations : |
Good |
|
|
|
|
Auditors : |
Deloitte Haskins & Sells Chartered Accountants |
|
|
|
|
Associates/Subsidiaries : |
Associates D-Link Corporation, Taiwan Subsidiaries Virtual Computers Private Limited |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
35,000,000 |
Equity Shares |
Rs. 2/- each |
Rs. 70.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
30,004,850 |
Equity shares |
Rs. 2/- each |
Rs. 60.010 millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
60.010 |
60.010 |
60.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Employee stock options outstanding |
7.275 |
3.026 |
0.000 |
|
|
4] Reserves & Surplus |
1689.015 |
1526.154 |
1305.500 |
|
|
5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1756.300 |
1589.190 |
1365.500 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
9.566 |
13.189 |
12.900 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
|
|
TOTAL BORROWING |
9.566 |
13.189 |
12.900 |
|
|
DEFERRED TAX LIABILITIES |
64.306 |
57.906 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
1830.172 |
1660.285 |
1378.400 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
610.850 |
620.530 |
502.300 |
|
|
Capital work-in-progress |
38.856 |
5.258 |
4.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
514.415 |
437.670 |
390.200 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
447.599
|
305.395 |
272.100 |
|
|
Sundry Debtors |
635.936
|
689.657 |
479.800 |
|
|
Cash & Bank Balances |
27.462
|
51.764 |
28.600 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
258.523
|
202.108 |
163.400 |
|
Total Current Assets |
1369.520
|
1248.924 |
943.900 |
|
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
496.046
|
483.969 |
365.200 |
|
|
Provisions |
207.423
|
168.128 |
96.800 |
|
Total Current Liabilities |
703.469
|
652.097 |
462.000 |
|
|
Net Current Assets |
666.051
|
596.827 |
481.900 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
1830.172 |
1660.285 |
1378.400 |
|
PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other income] |
2844.154 |
2748.925 |
2572.800 |
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
283.069 |
358.673 |
362.800 |
|
Provision
for Taxation |
50.261 |
75.142 |
46.900 |
|
Profit/(Loss)
After Tax |
232.808 |
283.531 |
315.900 |
|
|
|
|
|
|
Export
Value |
114.644 |
102.789 |
NA |
|
|
|
|
|
|
Import
Value |
1409.033 |
1232.920 |
NA |
|
|
|
|
|
|
Total
Expenditure |
2561.085 |
2390.252 |
2210.000 |
QUARTERLY
/ SUMMARISED RESULTS
|
PARTICULARS |
|
30.06.2006 |
30.09.2006 |
|
Sales Turnover |
|
634.900 |
699.200 |
|
Other Income |
|
8.400 |
23.100 |
|
Total Income |
|
643.300 |
722.300 |
|
Total
Expenditure |
|
579.600 |
619.300 |
|
Operating
Profit |
|
63.700 |
103.000 |
|
Interest |
|
0.700 |
1.400 |
|
Gross Profit |
|
63.000 |
101.600 |
|
Depreciation |
|
15.800 |
24.100 |
|
Tax |
|
9.300 |
15.500 |
|
Reported PAT |
|
38.400 |
64.600 |
200606 Quarter 1
Notes
Expenditure Includes (Increase in Stock in Trade Rs (78.322)million
Consumption of Raw Materials, Components & purchase of traded goods Rs
544.184 million Staff Cost Rs 49.349 million Manufacturing and other
Expenditure Rs 64.440 million Tax Includes Provision for Current Tax Rs 8.50
million Deferred Tax Rs (0.50)million Fringe Benefit Tax Rs 0.75 million EPS is
Basic & Diluted Status of Investor Complaints for the quarter ended June
30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints
Received during the quarter 05 Complaints disposed off during the quarter 05
Complaints unresolved at the end of the quarter Nil 1. The Company operates in
only 1 segment, Viz., Networking, from the financial year ended 31.03.2006 and
hence the Segment information is not applicable. 2. The figures for the
previous period has been re-grouped and or/re-arranged wherever necessary. 3.
The above unaudited results have been approved by the Board of Directors at its
Meeting held on July 28, 2006.
200609 Quarter 2
Notes:
EPS is Basic & Diluted Status of Investor Complaints for the quarter
ended 30.09.2006 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 10 Complaints disposed off during the
quarter 10 Complaints unresolved at the end of the quarter Nil 1. Mr.
Chandrasekhar Kopparapu has resigned as Director on the Board of Directors and
the Board has approved his resignation. 2. During the quarter ended 30.09.2006
the Company has revised the useful life to Motor Vehicles to 5 years from the
existing life of 10 years. The impact due to the above change aggregates to Rs
7.60 million which has been charged to the profit and loss account during the
current quarter. 3. The figures for the previous period has been re-grouped and
or / re-arranged wherever necessary. 4. The above unaudited results have been
approved by the Board of Directors at its Meeting held on 26.10.2006.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
0.01 |
0.01 |
0.01 |
|
Long Term Debt-Equity Ratio |
0.01 |
0.01 |
0.01 |
|
Current Ratio |
1.75 |
1.86 |
2.19 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
3.83 |
4.24 |
4.30 |
|
Inventory |
8.01 |
10.21 |
9.66 |
|
Debtors |
4.55 |
5.04 |
5.09 |
|
Interest Cover Ratio |
92.26 |
116.65 |
101.78 |
|
Operating Profit Margin(%) |
11.50 |
14.11 |
16.99 |
|
Profit Before Interest And Tax Margin(%) |
9.49 |
12.27 |
15.29 |
|
Cash Profit Margin(%) |
9.74 |
11.46 |
14.88 |
|
Adjusted Net Profit Margin(%) |
7.72 |
9.62 |
13.18 |
|
Return On Capital Employed(%) |
17.49 |
24.65 |
28.91 |
|
Return On Net Worth(%) |
14.34 |
19.50 |
25.15 |
STOCK PRICES
|
Face
Value |
Rs.2.00/- |
|
High |
Rs.96.70 |
|
Low |
Rs.92.00 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was incorporated on 31.03.1993 at Verna in Goa as a private limited liability company having Company Registration Number 1341.
The company was originally incorporated under the name and style of Smart-Link Network Private Limited and was changed to the present subsequent to the financial participation from D-Link Corporation, Taiwan in 1995.
It was converted into a public limited liability company and the name was changed to thepresent with effect from 01.02.1999.
The company started its software development activity in Goa in February 2000 and is in the process of setting up centres at Bangalore and Navi Mumbai. The software engineers of the company are trained at D-Link Corporation, Taiwan in specialised software for the networking field. The company intends to penetrate the specialised software segment, a major one in the networking and communication field.
The company set up two manufacturing plants with two SMT Lines at Goa, the third line is expected to be in operation by March 2001.
The company plans to set up Fibber Optic Products manufacturing/assembly line and also to set up a new SMT line, assembly line at Goa. Apart from these two it plans to expand its software division activities. The total project cost is estimated to be Rs. 550.00 millions. To part finance the expansion plans the company came out with a public issue of total 1523740 equity shares at a price of Rs. 300/- per share in February 2001.
During the year under report (2000-01), the company concluded the scheme of amalgamation of D-Link International a wholly owned subsidiary. Further recently the board of directors has approved the amalgamation of D-Link Infotech Private Limited and Open-Link Network Private Limited subject to obtaining sanction from the shareholders. For further expansion the company has acquired 2 plots measuring 19000 sq.mtrs. adjacent to the Verna, Goa plant at a cost of Rs. 20.000 millions in April, 2003. The company entereda stratetic tie-up with Corning Inc, for steady supply of Corning OFC, including infiniCor and SMF-28 fibrers. It is planning to set up call centre to render Technical Support and service to English speaking D-Link Overseas Business unit in USA.
The company also plans to expand its software division at Bangalore to take up new project as well as develop state-of-the-art voice over internet protocol products.
Subject is a joint venture of D-Link Corporation with Indian technocrat promoters and started its operations in India in 1994 as a private limited liability company. D-Link Corporation has 51% stake in the company.
On 14.07.1994 the company set up its Goa factory. On 25.04.1998 the company launched internet products and modems and on 1st July 1998 it launched structured cabling systems.
On 07.08.1999 it set up its 2nd SMT plant at Goa.
BUSINESS
Subject is engaged in the business as manufacturers and marketers of Networking Products and Modems.
Presently the company manufactures NIC, Hubs, Switches, Modems, Internet Servers, Printer Service, etc. The plant has a capacity of manufacturing 50,000 NIC, 10,000 Hubs and 40,000 modems per month. It has offices in most of the cities in India.
The company’ sells its’ products under the brand name “D-Link”.
The company has technical and financial collaboration with D-Link Singapore Pte Limited, Singapore.
Subject is a joint venture of D-Link Corporation, Taiwan with Indian technocrat Promoters.
Subject today is the fastest growing overseas business unit of D-Link Corporation, Taiwan.
Company’s fixed assets include Leasehold premises, Buildings, Plant and Machinery, Electrical Installations, Furniture, fittings and office equipments, Air Conditioners, Motor vehicles and computers.
Performance
In the financial year 2005-06, the Company achieved a Turnover of
Rs.3014.77 million as compared to Rs.2947.20 million in the previous year. The Net
Profit of the Company stood at Rs.232.06 million as compared to Rs.286.24
million in the previous year. The Turnover grew marginally by 2.3%. The Net
Profit was lower primarily due to increase in R&D expenses on In-house
product development and increase in number of service centers (RMA) which have
been opened with a view to reach the customers more effectively and to give
better after sales services for growth of business. Though the profits were
lower during the current year, the benefits of the above investment will be
felt in the coming years. The Company has shown significant growth in its core
networking products business and also maintained its market share in Structured
Cabling Products. On account of lower revenues from our motherboards business,
the turnover registered only a marginal increase.
During the year, the Company has started construction of new R&D
Office at Bangalore which is expected to be completed in the financial year
2006-07. From the current financial year, Technical Support Center has been
used to support the local networking products business while the Software
Division has been engaged in development of software for our own use in
R&D, hence there will not be any significant revenues from these businesses
in future and they have also ceased to be separate business segments from the
year ended 31.03.2006.
Significant
Developments
The Company made some significant changes in the business organization
by splitting it into two major categories i.e., Channel Business and Enterprise
Business. The Channel Business will primarily cater to the Small Office Home
Office (SOHOVSMB market through our existing distributors present throughout
the country and in SAARC region. The Enterprise business, which is a solution
oriented business, has been separated to cater to enterprise customers by
direct approach as we are coming up with more high-end products.
During the year, the Company launched Routers and Core Switches for the
enterprise segment as well as locally developed Multi-access Routers
DRO-200i/DRO-250i and IP-PBX and IP-Phones.
The company also launched intelligent Smart Patch Panels under its
Structured Cabling products primarily designed to boost excellent cable
management coupled with robust construction.
The Company was able to make significant inroads in the enterprise
networking market through its tie-up with Foundry Networks wherein the revenues
from high-end switches grew more than 90% as compared to previous year.
The Company has created direct service locations throughout the country
which will help the company in providing better after sales service to its
customers.
Industry Structure
and Developments
The Indian economy is consistently growing at the rate of 7% to 8% and
this growth rate is expected to continue in the coming years as well. The
growth has been primarily led by industrial resurgence, pick up in investment
and increased capital spending on expansion and new capacities both in the
government and private sector. This growth in the Indian economy will lead to
increased spending on networking and hardware as enterprises both in the
corporate and government realize the benefits of integrated networking. There
is increased need for integrated networking equipment both in the Small and
Medium Business Enterprises in India and this along with the convergence of
voice, data and video services will primarily be the drivers for growth in
future.
Networking Products
The Company continued its good growth in the Networking Products
category. The revenues from networking products grew from Rs. 742.25 million in
the previous year to Rs. 903.50 million for the year ended 31 st March, 2006
registering a growth of 21.72% over the previous year. The share of revenues
from the networking products grewto 29.97% of the overall revenues as compared
to 25.19% in the previous year. The growth in networking products was primarily
led by switches which grew by more than 20% as compared to the previous year.
The tie-up with Foundry Networks, Inc., U.SA has helped the company in increasing
its share in the growing enterprise networking market. The Company bagged
significant orders from large enterprises for Foundry Switches. The Company's
growth in Wireless Segment continued and the revenues from Wireless-products
grew more than 50% as compared to the previous year.
Internetworking
Products
Revenues from internetworking products were lower as compared to the
previous year primarily due to the fact that the Broadband penetration did not
take off as expected. The revenues from Internetworking products were lower at
Rs.409.50 million for the year ended 31st March, 2006 as compared to Rs.555.12
million in the previous year. However, there was significant growth in routers,
leaseline modems and VoIP products as compared to the previous year.
Motherboards The revenues from motherboards were lower on account of lower
sales in the quarter ended March, 2006. The lower revenues were primarily due
to changes in excise duty structure on personal computers and motherboard being
one of the major components of personal computers, sales were substantially
lower in March, 2006. The revenues were down to Rs.893.20 million for the year
ended 31.03.2006 as compared to Rs. 1008.86 million in the previous year.
Further, as per the proposal approved by the shareholders at the last
annual general meeting held on 6th August, 2005, the Company has taken steps to
transfer the sales and marketing activities of motherboards to the subsidiary
company, Gigabyte Technology (India) Limited as part of its strategy to focus
on the core networking business. The company therefore, expects to have lower
revenues from motherboards in the current year.
Passive Products
Passive Products consisting of copper and fiber products continued to
maintain its impressive growth rates as in the previous years. The Structured
Cabling products recorded revenues of Rs.732.57 million for the year ended
31.03.2006 as compared to Rs.569.23 million in the previous year, registering a
growth of more than 28.70%.
The Software division and Technical Support Center which were catering
to outside customers in the earlier years have shifted their focus to inhouse
support to the core networking products business and hence there were no
revenues from Software Division during the current year.
Outlook
Broadband
The Economic Survey 2005-06 has termed broadband as the next frontier in
telecom. The Survey also said that the growth in subscriber base would need to
increase substantially to be comparable with other Asian countries. The
broadband consumer premises equipment (CPE) market is at the threshold of major
surge in India. It is expected that the Indian Broadband CPE market would touch
2 million units this year and this represents a good opportunity for the
company to increase its market share and revenues.
Router
With increasing deployment of Networking in Small and Medium Businesses
(SMB), the market demand for cost-effective, multi-function routers is
foreseen. To address this opportunity, the company has successfully developed
and introduced DRO-200 in to the market. The technology developed would be used
for positioning derivative products.
IP Telephony
Indian enterprises are experiencing changes in the field of converged
networks. Certain changes have been made in the regulatory environment to open
up the market and allow new forms of convergence, one of them being IP
Telephony. India has a lot of potential to benefit by this latest technology
and according to analysts, India is expected to show the fastest adoption of IP
applications for the next seven years with a CAGRof52.3%.
IPBX
To address the increasing need for cost-effective IP-PBX, the company
has successfully developed and introduced DVX-1000 especially tailored to the
needs of SMB. The technology developed would be used for developing derivative
products.
VoIP End Points
During the current year, the company has also successfully developed and
introduced the following products
DPH-70+E/L - Modem IP Phones
DIP-110E/L - IP Phones
DIV-140 - 4 Channel FXO VoIP Gateway
Financial Review
The Company has reported a marginal revenue growth of 2.29% at
Rs.3014.77 million for the current year vis-à-vis Rs.2,947.20 million for the
previous year. As in the previous years, with the increasing focus on in-house
software development for new products, there were no revenues from software
division for the current year as compared to Rs.37.60 million for the previous
year.
Operating Profits, i.e., Profit before Depreciation, Interest, Tax was
lower at Rs.346.89 million as compared to Rs.415.96 million in the previous
year. The operating profits were lower primarily due to the costs incurred in
the software development as our own R&D expenses, increase in manpower
costs, power and fuel costs and the increased costs for customer service due to
the opening of service centers at different locations throughout the country.
Other Income for the year was higher at Rs.58.65 million as compared to
Rs.53.09 million.
Depreciation stood at Rs.60.67 million as compared to Rs.54.23 million
during the previous year. The depreciation is higher due to the additions of
fixed assets mainly, plant and machinery as part of normal business expansion.
Cash profit was lower at Rs.343.74 million as compared to Rs.412.90
million for the previous year. Profit before Tax is lower at Rs.283.07 million
as compared to Rs.358.67 million during the previous year.
Net Profit for the current year is lower at Rs.232.06 million as
compared to Rs.286.24 million in the previous year.
The Company's Earning per Share is lower at Rs7.73 as compared to
Rs.9.54 for the previous year.
Subject, incorporated
in 1993 as Smart-Link Network Private Limited, its name was changed to the
present one subsequent to the financial participation from D-Link Corporation,
Taiwan in 1995.
The company started its software development activity in Goa in February 2000
and had set up centers at Bangalore and New Bombay. The software engineers of
the company are trained at D-Link Corporation, Taiwan in specialized software
for the Networking field. The company intends to penetrate the Specialized
Software Segment, a major one in the Networking and Communication Field. D-Link
Corporation holds a dominant position in the Broadband space globally. It s a
technology and market leader in the Broadband CPE space worldwide. It has
became the world's first company to design, develop and commercially deploy the
ADSL 2+ technology Broadband modern cum router. It also introduced the Wireless
Media player which creates a seamless connection between computers ans consumer
electronics in the year 2004-05.
CRN Survey 2004 has recognized D-link as the most Admired Networking Company
and ranked as No.1 in Low end networking Products and Structured Cabling and
No.2 in High Networking Products in the year 2004-05.
Subject has setup two manufacturing plants with two SMT Lines at Goa, the third
SMT line is expected to be in operation by Mar. 2001. Presently it manufactures
NIC, Hubs, Switches, Modems, Internet Servers, Print Servers etc. It has a
nationwide network of 17 offices, 21 territory distributors, 325+ dealers and
3600+ resellers and 4 overseas distributors in SAARC countries in the year
2004-05.
The company plans to setup Fiber Optic Products manufacturing/assembly line and
also to setup a New SMT line, Assembly line at Goa. Apart from these two it
plans to expand its software division activities. The total project cost is
estimated to be Rs 550 millions. To part finance the expansion plans the
company came out with a public issue of total 1523740 equity shares at a price
of Rs 300 per share in February 2001.
During 2000-2001, the company concluded the scheme of amalgamation of D-Link
International Limited a wholly owned subsidiary. Further recently the boards of
directors have approved the amalgamation of D-Link Infotech Private Limited and
Open-Link Network Private Limited subject to obtaining sanction from the
shareholders. For further expansion the company has acquired 2 plots measuring
19000 sq. mtrs adjacent to the Verna, Goa plant at a cost of Rs.20 million in
April, 2003. The company entered a stratetic tie-up with Corning Inc, for
steady supply of Corning OFC, including InfiniCor and SMF-28 fibers. It is
planning to set up call center to render Technical Support and service to
English speaking D-Link Overseas Business unit in USA.
As part of consolidating operations the company has amalgamated Virtual
Computers Private Limited, a 100% subsidiary of the company with itself. The
assets and the liabilities of Virtual Computers Private Limited have been taken
over by the company with effect from 01.04.2003.
Subject has incorporated a new company, Inercorrider Systems Limited, during
the year 2005, for outsourcing of software development on contract basis.
The tie-up with Foundry Networks, Inc USA has helped the company to make an
entry in the growing Enterprise Networking market which is growing at about
15-20% in the year 2004-05.
Subject has entered into an agreement with Giabyte Technology Limited, Taiwan
in the year 2004-05, to expand the scope of the operation of its Subsidiary,
Gigabyte Technology (India) Limited (Formerly Known as Digi Giga Systems
Limited).
As part of expansion programme the company have expanded infrastructural
footprint in Goa to five units add also planning to scale up Bangalore
operations and have acquired a plot in Bangalore Electronic City with plans to
build own independent facility. It also looking to setup a Software Center in
Goa in the year 2003-04. The company has acquired additional plot with building
at Verna, Goa admeasuring about 3,900 sq. mtrs in the year 2004-05.
During the year 2004-05, the company has launched several products in the
intelligent switching category, wireless LAN space, structured cabling category
and motherboard space. Firewalls based on Intel Xcale Technology, designed by
the Software Division were also launched.
Website Details :
Subject is a part of
the multinational D-Link Corporation, which has a presence in over 100
countries. D-Link India’s (Group) revenue is Rs.3420 millions (FY 2006). Its
core business is in the area of networking and communications.
Subject is present in the high end enterprise segment with a complete range of
co-branded products from Foundry Networks, Inc. of U.S.A in India and in
the PC components and PC peripherals space through a JV with Gigabyte
Technology, Taiwan. Subject’s product range enjoys substantial market share in
India and ranks among the leaders in Modems, Structured Cabling, Wireless LAN
and Switches.
Subject has a strong
infrastructural presence with ISO 9001:2000 and ISO 14001:1996 certified
state-of-the-art manufacturing plants in Goa; Software and R&D Centers in
Goa and Bangalore; and a Global Tech Support Call Centre in Mumbai. It has a
nationwide network of 17 offices, 21 territory distributors, 400+ dealers and
4000+ resellers and 4 overseas distributors in SAARC countries providing active
sales and service support.
CMT REPORT [Corruption, Money
laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.27 |
|
UK
Pound |
1 |
Rs.86.71 |
|
Euro |
1 |
Rs.57.13 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
NO |
|
TOTAL |
|
55 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit
history (10%) Market
trend (10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |
|
NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
|