%20LIMITED-67636%2010-Dec-2008_files/image002.jpg){kind=small}
MIRA
INFORM REPORT
|
Report Date : |
10.12.2008 |
IDENTIFICATION
DETAILS
|
Name : |
REDINGTON INDIA
LIMITED |
|
|
|
|
Registered
Office : |
SPL Guindy House,
95, Mount Road, Guindy, Chennai - 600032, Tamilnadu |
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|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2008 |
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|
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Date of
Incorporation : |
02.05.1961 |
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|
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Com. Reg. No.: |
18-28758 |
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CIN No.: [Company Identification No.] |
L52599TN1961PLC028758 |
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TAN No.: (Tax
Deduction & Collection Account No.) |
CHER00540B |
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|
|
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PAN No.: (Permanent
Account No.) |
AABCR0347P |
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|
|
Legal Form : |
A Public Limited Liability
Company. The Company’s Shares are Listed on the Stock Exchanges. |
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Line of
Business : |
Trading,
Importing and Distributing of Computers, Computer Peripherals, Printers,
Plotters and Spares including after sales service. |
RATING &
COMMENTS
|
MIRA’s Rating
: |
A |
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RATING
|
STATUS |
PROPOSED
CREDIT LINE |
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|||||||
|
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 |
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Maximum Credit
Limit : |
USD 28000000 |
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Status : |
Good |
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Payment
Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established and reputed company having fine track. Trade relations are fair.
Financial position is good. Payments are correct and as per commitments. The company is
doing very well. It can be regarded as a promising business partner in a
medium to long run. |
LOCATIONS
|
Registered
Office/ Corporate
Office : |
SPL Guindy House,
95 Mount Road, Guindy, Chennai - 600 032, Tamilnadu, India |
|
Tel. No.: |
91-44-22353313/14/15/16/17/18/42243281/42243499/
52243535 |
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Fax No.: |
91-44-22352790 |
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E-Mail : |
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Website : |
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|
Sales And
Service Centers: |
Located at : · Chennai · Bangalore · Hyderabad · Trivandrum ·
Coimbatore ·
Visakhapatnam · Cochin · Madurai ·
Hubli ·
Calicut · Hyderabad |
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|
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Branches : |
Located at : · New Delhi · Chandigarh · Uttar Pradesh · Punjab · Rajasthan · Uttaranchal · Kolkata · Orissa · Bihar · Guwahati · Gujarat · Karnataka · Goa · Mumbai · Pune · Gujarat · Tamilnadu |
DIRECTORS
|
Name : |
Mr. M.
Raghunandan |
|
Designation : |
Whole time Director |
|
Address : |
22, First Street, Cenoataph Road, Chennai - 600 018, Tamilnadu |
|
Date of Birth
: |
01.11.1947 |
|
Qualifications
: |
B. E. MBA |
|
Experience : |
36 years |
|
Date of
Appointment: |
01.03.1999 |
|
|
|
|
Name : |
Mr. R.
Jayachandran |
|
Designation : |
Non Executive Director |
|
Address : |
1 Belmont Road,
Singapore - 259 959 |
|
Date of Birth
: |
27.04.1944 |
|
Date of Appointment: |
15.10.1993 |
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|
|
|
Name : |
Mr. R. Srinivasan |
|
Designation : |
Managing Director |
|
Address : |
15 Ardmore Park, #05-02, Singapore – 269 852 |
|
Date of Birth
: |
28.06.1946 |
|
Date of
Appointment: |
15.10.1993 |
|
|
|
|
Name : |
Mr. R. Vijayaraghavan |
|
Designation : |
Independent Director |
|
Address: |
33 Warran Road, Mylapore, Chennai – 600 004, Tamilnadu, India. |
|
Date of Birth
: |
02.01.1950 |
|
Date of
Appointment: |
11.09.1995 |
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|
|
|
Name : |
Mr. HU Jia Lung |
|
Designation : |
Non Executive Director |
|
Address: |
19th Floor, 104 Songde Road, Sinyi District, Taipei,
Taiwan Country |
|
Date of Birth
: |
23.02.1942 |
|
Date of
Appointment: |
30.12.2004 |
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|
|
|
Name : |
Mr. Huang Chi Cheng |
|
Designation : |
Deputy Managing Director |
|
Address: |
2nd Floor, No. 9 Lane, 139 Sec 2 Bei Sin Road, Sie Tien,
Taiwan. |
|
Date of Birth
: |
26.03.1957 |
|
Date of
Appointment: |
30.12.2004 |
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|
|
|
Name : |
Mr. Raj Shankar |
|
Designation : |
Non Executive Director |
|
Address: |
65, Chulia Street, 49-04 OCBC Centre, Singapore. |
|
Date of Birth
: |
19.06.1958 |
|
Date of
Appointment: |
30.12.2004 |
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|
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|
Name : |
Mr. Steven A Pinto |
|
Designation : |
Independent Director |
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|
Name : |
Mr. J Ramachandran |
|
Designation : |
Chairman |
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|
|
|
Name : |
Mr. William Adamopoulos |
|
Designation : |
Additional Director |
KEY EXECUTIVES
|
Name : |
T. G. Janakiraman |
|
Designation : |
Company Secretary |
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|
|
|
Name : |
M. Muthukumarasamy |
|
Designation : |
Company Secretary |
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|
Name : |
Mr. S. V. Krishnan |
|
Designation : |
Secretary |
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Address: |
02 8th Streets, Flat No. C2, Ashreya Srinivas Apartments,
Nanganallur, Chennai – 600 064. |
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Date of Birth
: |
21.04.1973 |
|
Date of
Appointment: |
30.11.2002 |
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|
|
|
Name : |
Mr. P S Neogi |
|
Designation : |
President |
|
Date of Birth
: |
49 years |
|
Qualifications
: |
B. E. |
|
Experience : |
21 years |
|
Date of
Appointment: |
01.04.2000 |
|
|
|
|
Name : |
Mr. E H Kasturi Rangan |
|
Designation : |
President |
|
Date of Birth
: |
43 years |
|
Qualifications
: |
B. Sc., FCA, Graduate, CWA, CFA, BGL |
|
Experience : |
15 years |
|
Date of
Appointment: |
01.10.2002 |
|
|
|
|
Name : |
Mr. Ramesh Natarajan |
|
Designation : |
Vice President |
|
Date of Birth
: |
39 years |
|
Qualifications
: |
B. Com |
|
Experience : |
17 years |
|
Date of
Appointment: |
25.08.1997 |
|
|
|
|
Name : |
Mr. J K Senapati |
|
Designation : |
Vice President |
|
Date of Birth
: |
41 years |
|
Qualifications
: |
B.Sc., PGDM |
|
Experience : |
15 years |
|
Date of
Appointment: |
15.06.1998 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.09.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Shareholding of
Promoter and Promoter Group |
|
|
|
Bodies Corporate |
33904595 |
43.54 |
|
Public
Shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds/ UTI |
55000 |
0.07 |
|
Financial Institutions/ Banks |
1424 |
0.00 |
|
Foreign Institutional Investors |
11585440 |
14.88 |
|
Non Institutions |
|
|
|
Bodies Corporate |
1824880 |
2.34 |
|
Individuals Holding Nominal Share Capital |
|
|
|
i. upto Rs. 0.100 Million |
1611835 |
2.07 |
|
ii. In Excess of R.s 0.100 Million |
166532 |
0.21 |
|
|
|
|
|
Any Other |
|
|
|
Clearing Member |
14524 |
0.02 |
|
Directors and their relatives |
357028 |
0.46 |
|
Escrow Account |
268 |
0.00 |
|
Foreign Corporate Bodies |
27775277 |
35.67 |
|
Hindu Undivided Families |
74641 |
0.10 |
|
Non Resident Indian |
476987 |
0.61 |
|
Trust |
11815 |
0.02 |
|
Foreign Nationals |
8500 |
0.01 |
|
Total |
77865746 |
100.00 |
BUSINESS DETAILS
|
Line of
Business : |
Trading, Importing
and Distributing of Computers, Computer Peripherals, Printers, Plotters and
Spares including after sales service. |
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Products : |
·
Computer Peripherals ·
Services income
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Agencies Held: |
· IBM · Intel · Avaya · HP · Epson · Compaq · Philips · Samsung · Microsoft · APC · CA · Microsoft · Kobian · Motorala |
GENERAL
INFORMATION
|
No. of
Employees : |
350 |
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Bankers : |
· Hongkong and Shanghai Banking Corporation
Limited 30, Rajaji Salai, Chennai - 600 001, Tamilnadu · Indus Ind Bank 3 Village Road, Nungambakkam, Chennai – 600 001, Tamilnadu (Facility : Consolidating Limit Rs. 400 millions ·
Citi Bank NA 2 Club House Road, Chennai – 600002 ·
HDFC Bank Limited 751-B, Anna Salai, Mariam Center, Chennai – 600 002. ·
State Bank of India Commercial Branch, 232 NSC Bose Road, Chennai – 600 001. ·
ABN Amro
Bank N.V ·
Bank of Nova
Scotia ·
Barclays
Bank PLC ·
BNP Paribas ·
Deutsche
Bank AG ·
ICICI Bank
Limited ·
IDBI Bank
Limited ·
ING Vysya
Bank Limited ·
Kotak
Mahindra Bank Limited ·
Standard
Chartered Bank ·
Union Bank
of India ·
Yes Bank
Limited |
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Facilities: |
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Banking Relations : |
Good |
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Statutory
Auditors : |
Deloitte Haskins
and Sells Chartered
Accountants |
|
Address: |
2nd Floor,
“Temple Tower, 672, Anna Salai, Nandanam, Chennai – 600 035. |
|
Tel. No.: |
91-44-52131124-28 |
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Fax No.: |
91-44-52131129 |
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|
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Internal Auditors: |
Pricewaterhouse Coopers Chartered Accountant |
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|
Subsidiaries : |
· Redington (India) Investment Private
Limited – 50000 (100%) ·
Nook Holding Private Limited
– 50000 Shares (100%) ·
Redington Gulf FZE ·
Redington India Investment
Limited |
|
|
|
|
Holding
Company : |
· Redington (Mauritius) Limited III Floor, Les
Cascade, Edith Cavell Street, Mauritius · Redington Pte. Limited 1, Phillip Street, # 07-00, Singapore City ·
Chanrai Investment
Corporation Limited |
|
|
|
|
Associate
Companies: |
· Redington Singapore Pte Limited · Kewalram Singapore Limited |
CAPITAL STRUCTURE
Authorised Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
85000000 |
Equity Shares |
Rs. 10/- each |
Rs. 850.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
77865700 |
Equity Shares |
Rs. 10/- each |
Rs. 778.657 Millions |
|
|
|
|
|
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF
FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
778.657 |
778.657 |
630.800 |
|
2) Advance Share Capital |
0.000 |
0.000 |
0.000 |
|
3] Reserves & Surplus |
4916.895 |
4571.567 |
3045.400 |
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH |
5695.552 |
5350.224 |
3676.200 |
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
1175.810 |
1243.215 |
805.200 |
|
2] Unsecured Loans |
1346.825 |
1927.419 |
1188.200 |
|
TOTAL
BORROWING |
2522.635 |
3170.634 |
1993.400 |
|
DEFERRED TAX LIABILITIES |
2.861 |
10.622 |
0.000 |
|
|
|
|
|
TOTAL
|
8221.048 |
8531.480 |
5669.600 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
531.297 |
305.814 |
206.400 |
|
Capital work-in-progress |
0.000 |
0.000 |
5.100 |
|
|
|
|
|
|
INVESTMENTS |
3208.247 |
2380.773 |
1775.600 |
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
3018.239 |
2941.799 |
1779.500 |
|
Sundry Debtors |
4287.159 |
5288.968 |
3443.100 |
|
Cash & Bank Balances |
775.923 |
938.186 |
330.700 |
|
Other Current Assets |
0.000 |
0.000 |
0.000 |
|
Loans & Advances |
641.769 |
845.869 |
801.100 |
|
Total Current
Assets |
8723.090 |
10014.822 |
6354.400 |
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
Current Liabilities |
3872.178 |
3418.895 |
2236.500 |
Provisions
|
369.408 |
751.034 |
435.400 |
Total
Current Liabilities
|
4241.586 |
4169.929 |
2671.900 |
Net Current Assets
|
4481.504 |
5844.893 |
3682.500 |
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
TOTAL
|
8211.048 |
8531.480 |
5669.600 |
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
57710.071 |
47125.641 |
36926.600 |
|
|
Other Income |
92.670 |
45.452 |
882.600 |
|
|
Total Income |
57802.741 |
47171.093 |
37809.200 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
1035.709 |
656.293 |
453.300 |
|
|
Provision for Taxation |
364.568 |
232.111 |
161.900 |
|
|
Profit/(Loss) After Tax |
671.141 |
424.182 |
291.400 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Goods sold |
54887.002 |
45120.116 |
0.000 |
|
|
Employee Compensation Costs |
610.682 |
400.703 |
0.000 |
|
|
Trading Expenses |
211.482 |
149.380 |
0.000 |
|
|
Managerial Remuneration |
8.900 |
5.275 |
0.000 |
|
|
Auditor’s remuneration |
3.020 |
2.171 |
0.000 |
|
|
Bad Debts Written off and Provision for doubtful debts |
36.656 |
30.072 |
0.000 |
|
|
Manufacturing Expenses |
0.000 |
0.000 |
26.600 |
|
|
Administrative Expenses |
0.000 |
0.000 |
278.900 |
|
|
Raw Material Consumed |
0.000 |
0.000 |
36415.300 |
|
|
Salaries, Wages, Bonus, etc. |
0.000 |
0.000 |
299.900 |
|
|
Interest |
406.635 |
326.386 |
227.400 |
|
|
Depreciation & Amortization |
40.208 |
34.885 |
28.700 |
|
|
Other Expenditure |
562.447 |
445.812 |
79.100 |
|
Total
Expenditure |
56767.032 |
46514.800 |
37355.900 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2008 1st
Quarter |
30.09.2008 2nd
Quarter |
31.12.2008 3rd
Quarter |
|
Sales Turnover |
14908.700 |
16526.100 |
13520.600 |
|
Other Income |
10.100 |
18.600 |
25.900 |
|
Total Income |
14918.800 |
16544.700 |
13546.500 |
|
Total Expenditure |
14608.900 |
16137.800 |
13221.800 |
|
Operating Profit |
309.900 |
406.900 |
324.700 |
|
Interests |
66.000 |
121.600 |
102.200 |
|
Gross Profit |
243.900 |
285.300 |
222.500 |
|
Depreciation |
9.600 |
11.600 |
10.800 |
|
Tax |
83.600 |
100.500 |
73.700 |
|
Reported PAT |
150.700 |
175.500 |
138.000 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
PAT / Total Income |
(%) |
1.16
|
0.89 |
0.77 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
1.79
|
1.39 |
1.23 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
11.19
|
6.36 |
6.91 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.18
|
0.12 |
0.12 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.19
|
1.37 |
1.27 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.06
|
2.40 |
2.38 |
LOCAL AGENCY
FURTHER INFORMATION
History
The company was
incorporated on 2nd May, 1961 at Mumbai in Maharashtra having
Company Registration Number 11998.
The Registered Office of the company was shifted from Mumbai in
Maharashtra to Chennai in Tamilnadu with effect from 28.09.1994 and a new
Company Registration Number 28758 of Chennai ROC was obtained.
Subject is a leading provider of IT products, logistics management and
other services ranked 9th by DQ Top 20 issue of 2002. Subject serves
more than 5500 IT resellers in India covering over 220 cities.
It represents more than 15 leading global brands covering product
categories like systems, software, peripherals, components, network products,
mobile phones, etc. The company generated as sales turnover of Rs. 13500
millions ($ 285 millions) in its last financial year ended 31st
March, 2002.
Subject is a part of 140 years old $2 billion Transnational Kewalram
Chanrai Group headquartered at Singapore.
The group has a very strong business history with operations spread over
40 countries covering USA, Asia, Europe and Africa. The group’s operations are highly diversified and cover areas
like IT products and services, international trading, property development,
textiles manufacturing, etc.
The group has IT products and service business in India, USA, Singapore,
Dubai, Iran, Egypt, Saudi Arabia, Jordan and Kuwait. The IT products and services business generated revenue of $ 525
millions in the financial year 2001-02.
The company started its’ Indian operations in 1993 at Chennai with a
vision to become a leading distributor of world class IT products with a clear
emphasis on supply chain excellence and operational efficiency.
Subject started with distribution of HP peripherals and continued adding
newer products / brands to its portfolio, growing from 5 employees, 3 branches,
25 dealers and Rs. 90 millions sales in 1994 to 350 employees, 28 branches,
over 5500 dealers and Rs. 13500 millions in the year ended 31st
March, 2002.
The company has emerged as the industry's most efficient distribution
company. The company evolved its business from a small manual operation to a
very large technology driven operation, which provides "Best value for
money" to its customers.
Performance:
The consolidated revenue of the Company for the year was Rs.108840.000 Millions
as against Rs.90650.000 Millions in the previous year. The total revenue has
grown at a CAGR of 53% for the last five years. The consolidated profit after
tax for the year was Rs.1360.000 Millions as against Rs.1020.000 Millions in
the previous year, with a CAGR of 72% for the last five years.
The Standalone revenues of the Company and the PAT for the year ended March 31,
2008 was Rs.57800.000 Millions and Rs.670.000 Millions respectively as against
Rs.47170.000 Millions and Rs.420.000 Millions during the previous year.
The Earnings per Share (EPS) on consolidated basis on weighted average number
of equity shares increased to Rs.17.48 in the current year as compared to
Rs.15.36 in the previous year.
Distribution Business for Information
Technology Products:
The PC penetration level is still low in India compared to world average
and even compared to many of the emerging markets. This offers high potential
for growth in the IT products distribution segment, which revolves around the
growth of Personal Computers (PC).
The Central Government and various State Governments are in the process of
automating their administrative departments for better efficiency and online
information flow. Educational institutions have also made IT education
compulsory. Till few years back, the demand was primarily centred on Tier 1
cities. Now, there is a steady visible shift to Tier 2 & Tier 3 cities. All
these, supported by favourable macro-economic conditions and the entry of large
format retail stores, have contributed to an all round increase in the IT
products demand in the country. The company being a dominant player in the IT
products distribution segment in India captured sizeable part of this growth
and was able to grow its revenue from IT products by around 19% in the
financial year.
Revenue from sale of IT products remained buoyant throughout the year for the
company. In addition to the market growth, the company's growth was also
supplemented by consistent addition of new product lines in the existing
portfolio, tie-up with new brands, increased reach by opening new branches and
warehouses and broad-basing customer base through new partners. During the
year, the company added 5 brands to its portfolio, taking the total to 44
brands in the IT products distribution segment. The company also opened new
branches cum warehouses at Agra, Varansi, Mysore, Vijayawada and Tirunelveli
with a clear strategy to move into smaller cities and be closer to the
customers. The customer base which was at around 12,048 by end of 2006-07, has
moved up to 14,458 by end of 2007-08, a growth of 20%.
Though the company was a late entrant in the Value products space (Networking
products, Software products, High-end Servers, Storage products, etc.), it
currently occupies a dominant position in this segment in the Indian market.
This migration has enabled the company to increase its profitability on a
consistent basis
Distribution Business for
Non-Information Technology Products:
The supply chain model in the Non-IT products distribution space is also
similar to the IT industry. Currently, there are no players in this space with
pan-India presence. This enabled the company to scale up its operations in this
space and it has tied-up with brands like LG, Whirlpool, Microsoft Xbox and
Apple iPod for distributing their products in the country. The products that
are being dealt with in this space include digital printing categories, digital
lifestyle categories, consumer electronics and telecommunication products. The
customers and the products in this space being different from the IT space,
enables the company to de-risk its business model in terms of managing credit
and product obsolescence risk. The presence in this space along with tie-up
with reputed brands has helped us to engage and build closer relationship with
large format retailers who are setting up retail outlets across the country.
Considering the reach and strong delivery capabilities, the company is well
poised to be an important supplier for these large format retailers to source
their product requirements through the company in future.
Service
Business:
Service business, during the year 2007-08, continued to be encouraging. The
service business registered 29% growth in revenue and this was achieved by
expansion of geographical reach, increasing the own Service network and tie up
with Partners. With the increased number of Service Centres, the Company is
well poised to capture the opportunities in this growing segment in the coming
years.
The Company made a concerted effort to move up the value chain in the Services
space and started operating High Level Repair Centres (HLRC) focused on telecom
products space. These initiatives are of strategic importance. This is expected
to generate additional earnings for the Company in the years to come. These
projects are a result of the Company's vision to move to higher level
technology where there is premium for services rendered.
Automated Distribution
Centre:
Considering the growing requirement of warehouse space for the company and with
a clear objective of establishing the company as an important player in the
fast growing Third Party Logistics (3PL) space, the Company is in the process
of creating infrastructure by setting up Automated Distribution Centres (ADC)
in four Metros in India. While the current warehouses that are used by the
company are on lease, these ADCs would be company owned. In addition to
providing huge capacity to handle growth for the next few years, this
initiative is expected to result in savings in rent. Usage of higher vertical
space, high technology material handling equipments and warehouse management
software, is expected to result in increased operational efficiencies.
Towards this objective the Company has purchased land for construction of ADCs
in Delhi and Kolkata during the year. This is in addition to the land that was
purchased at Chennai towards the end of last financial year. The company is in
the process of developing the 1st ADC at Chennai and this is expected to be
ready for operation by the last quarter of 2008-09.
Overseas
operations:
The Company's international business is conducted through two key subsidiaries,
Redington Gulf FZE, Dubai and Redington Distribution Pte Limited., Singapore.
Its international operations in the Middle East, Africa, South Asia and
Singapore reflect the company's ability to seamlessly manage diverse
geographies.
Redington Gulf FZE, the wholly owned overseas subsidiary of the Company was
rated as No.1 Distributor in the Middle East for the second year in succession
by `Channel Middle East'.
The year, the revenue of Redington Gulf FZE and its subsidiaries grew by over
60% while the profit grew over 30%. Apart from the organic growth in the IT
vertical, the subsidiary's growth was enabled by addition of the telecom
vertical, which had its first full year of operation. The subsidiary has also
continued to grow organically by adding new vendors largely in the better
margin space like Cisco, Sonic Wall, etc.
Redington Gulf FZE is in the process of selecting a suitable space in Jebel Ali
Free Zone Area, Dubai for setting up an Automated Distribution Centre and is
exploring various options to quicken the process. Recently, Redington Gulf FZE,
has formed a new subsidiary in Bahrain and had invested a sum of Rs.4.100
Millions to start in-country operations in that country.
Redington Gulf demonstrated highest growth in West Africa for HP products and
bagged the Best Distributor Award. Redington Gulf was also awarded by NOKIA as
Best Domestic Value Capturer for Middle East and Africa.
MANAGEMENT
DISCUSSION AND ANALYSIS:
OUTLOOK:
In line with the buoyancy in the economic conditions in the markets in
which it has operations, the Company has shown a consistent growth in its
existing line of IT and Non-IT business verticals. Though it is widely
perceived that US would show a recessionary trend in the coming year, its
impact is not expected to be pronounced in countries like India (due to its
strong domestic consumption) and the countries in Middle East and Africa region
(due to strong crude prices), the two biggest markets for the company. In many
of these markets where the company has operations, the PC penetration levels
are lower compared to the World average signifying huge potential for growth in
the coming years. The future looks encouraging for the company considering the expected
growth in these business segments and markets.
In addition, since the company is transforming its business model from a
pure IT distributor to a supply chain solution provider, with IT being one of
its product lines, growth is possible through addition of newer verticals.
INDUSTRY STRUCTURE & NATURE OF BUSINESS:
Structure:
The company is a vendor authorized end-to-end supply chain solution provider in
the IT and Non-IT products space in difficult but potential markets like South
Asia including India, Middle East and Africa and Singapore.
The Company buys products from the Vendors and Original Equipment Manufacturers
(OEM) for stock and sale through the channel by providing warehousing and
logistics services, sell the products, extend credit to the Channel Partners
and collect the proceeds from the customers. The company together with its
subsidiaries has more than 50 vendors for distributing their products to
various designated markets. In the process, as an extended value add to its vendors
and channel partners, the company is also into financing the Channel in the IT
industry through a separate NBFC subsidiary and supporting the products through
its wide network of service centres.
The IT distribution industry is witnessing growth fuelled by investment in the
IT and ITES sector, increasing need for automation and information technology
in all industries, increase in communication and computing infrastructure
spending, and increased internet usage. As per IDC, the PC penetration in India
is only around 2.8% of the total population and the PC market in India recorded
a Year-on-Year growth of 20% in 2007. Due to portability and affordability, the
notebooks market is showing a sustained strong growth trend. Currently,
notebooks account for more than 20% of the total PC market in the country, up
from less than 3% four years ago (Source: IMRB & MAIT).
The company's presence in non-IT vertical is predominantly in products like
digital printing machines, digital lifestyle products, telecom products, gaming
devices and consumer electronics. Though the products and customer base is
different from the IT vertical, the business model is similar to that of IT
vertical. Large Format Retailers (LFR) constitutes a significant and
fastgrowing channel for the Lifestyle Products.
SEGMENT WISE
PERFORMANCE:
i) IT Products:
The Company offers a comprehensive range of IT products like peripherals,
printers, scanners, plotters, supplies (cartridges), PC components (monitors,
hard disks, CD writers, CD ROMs, processors, motherboards), PCs, UPS,
networking, packaged software, storage, high-end servers etc.
The Company has relationships with more than 50 vendors and with
some of them for more than 10 years. The Company still continues to enjoy
excellent business relationship with its suppliers like Acer, APC, Apple,
Canon, Cisco, Computer Associates, EMC, Epson, Gigabyte, HCL Infosystems,
Hewlett Packard, Hitachi, IBM, Intel, Kodak, Lenovo, Linksys, Microsoft, Nokia,
Samsung, Seagate, Systimax, TVS Electronics, Viewsonic, Western Digital,
Whirlpool, Wipro, 3COM etc.
ii) Non-IT Products:
The company's initiative few years ago to focus on Non-IT products as a
separate division is paying off in the form of increased contribution to total sales.
Currently in this segment, the company has tie-up with Nokia for its mobile
handsets for Nigeria and Kenya markets, and Microsoft X-Box, Apple iPods and
Apple Mac, HP digital printing press, LG and Whirlpool consumer electronics and
various other gaming content providers for Indian market.
Indian Business Scenario:
Digital printing segment is becoming one of the key stimulant to this
division's growth. The HP Indigo digital press, with its on demand print and
variable data printing abilities has had the #1 market share in digital
production colour presses world wide (Source: Info Trends, WW On Demand
Quarterly Tracking data, Q1-Q3 2007 for production color printers with duty
cycles >1M impressions per month). The world wide installed base of the
Indigo machines during 2007 surpassed 4,000 presses. With new & improvised
machine models introduced during 2007, the total page volume has grown by
around 45% over 2006, across the globe.
The Indian digital printing market has been no exception to the above. While
the installed base of the HP Indigo machines in India has grown by around 52%
in the last year from 19 machines in 2006-07 to 29 machines in 2007-08, the
average page volume has grown by around 80% in 2007-08. Such increase in the
page volumes would continue to remain a key stimulant for this division's
growth in future. With its strong and experienced service capabilities, the
company is also well equipped to handle the after sales support for the
installed base of Indigo machines across the country.
The gaming device market is yet to gain popularity among the Indian consumers.
The rising income levels, changing preferences of the youth and the increasing
awareness among the target group provides opportunities for higher penetration
and a good expansion base for the market in the ensuing years. The company's
presence in this segment at an early phase and its tie-up with a strong brand
like Microsoft is expected to benefit over a long run. To penetrate this market
further, the company has tied-up with few renowned gaming content manufacturers
like Microsoft, Electronic Arts, etc.
Consumer electronics space includes products such as Televisions, DVD's,
washing machines, refrigerators, air conditioners, etc. The Company is testing
distributing these products in select locations especially in smaller cities
and towns. If the consumer electronics companies move to national distribution
model, there is huge potential for growth for the company in this space in the
ensuing years.
Overseas Business Scenario:
The company sees continuous robust growth in the coming years in the mobile
handset distribution market. The market provides ample space for further
penetration. Though a late entrant in this space, the company occupies a
dominant position in the handset distribution in the markets where it operate,
to the extent that Nokia has already become the No. 2 vendor for the company at
the consolidated level, in its 2nd full year of operation. The company intends
tying-up with more vendors and product categories in the Non-IT space in the
coming years to accelerate its growth.
iii) Supply Chain Services
Market:
Supply Chain Services has made rapid in-roads in every business in present day
scenario. The manufacturing industry to stay competitive is trying to keep its
cost of operations as low as possible. For each manufacturer to build their own
logistics infrastructure to reach their products to their customers at the
correct time, requires heavy investment in the supply chain. On the other hand,
a third party supply chain solution provider, like the company, which has its
infrastructure being created, would be in a position to reach their products to
their customers at a cheaper cost, due to economies of scale. Therefore, the
expected growth in the manufacturing and other sectors calls for greater
Logistics handling capabilities. The Company in order to tap the market
potential in this sector has started the third party logistics facility that is
expected to further add to the growth of the company in the ensuing years. The
available expertise in the logistics capabilities will provide fillip to the
above growth.
iv) Service Division:
Capitalising on the need for strong after sales support in the IT and Non-IT
space, the company provides end-to-end services including warranty and
postwarranty service thereby giving significant value-add to vendors and
customers. For some of the company's vendors, in the process of providing
customer support, the company provides other value added services such as
technical response centre, parts logistics, reverse logistics for defective
products, high-level repair services for mobile handsets and
motherboards.
The Company today successfully partners some of the best names in the IT and
telecom sectors like APC, HP, Huawei, IBM, Kinpo, Liteon, Microsoft, Motorola,
Nortel, Samsung, etc.
The Company has a 700 plus strong customer centric team handling about 20,000
repairs per month for several major telecom brands from about 50 locations
across India. At present, the Company has 270 service centres across the globe,
out of which 206 service centres are spread across India (out of which, 160
centres are partner-owned service centres).
STRENGTHS, RISKS AND
CONCERNS:
A. Strengths:
The company's presence in high growth markets is its biggest strength. To
supplement this, in the two biggest markets where the company has operations,
it has a dominant market share. For e.g., in India, the company is one of the
two main-line player in the IT space and in MEA the company's subsidiary is a
No. 1 player with a huge lead over the second player. The Company has a
diversified product range, which facilitates economies of scale and provides a
one-stop shop solution to its customer. The Company's presence in various
markets / geographies provides the opportunity to cater to the needs of
different markets according to their preferences. The Company's wide reach
through many branches and warehouses in smaller cities and towns to cater to
the needs of customers located in those cities and towns, is a big competitive
edge. Besides, continued and strong relationship with the vendors over the
years has resulted in growth both horizontally and vertically.
The Company's strong IT infrastructure facilities continue to support its
voluminous transactions of invoicing and management reports on real time basis.
In order to ensure consistent growth, the company consciously moved into Non-IT
space and other exclusive offerings to its customers, like financial services,
after sales support service and third party logistics services. This would help
the company to overcome the dependence on the IT distribution business. Even
within the IT space, the Company consistently expanded its product and vendor
portfolio and geographies to de-risk the business model. During the year
2007-08, the company has added new vendors such as Apple, Sonicwall, Elitecore,
KYE, Belkins, Moser Baer, Sun Micro, Logitech, Adobe, Toshiba and Authenex.
Supported by these key strengths, the company is well poised to capture the
strong growth in the industry.
B. Risks and Concerns and Risk
Mitigation:
The Company has adequate risk management system, which is geared up for
addressing all the major and intricate business risks such as inventory risk,
credit risk, foreign exchange risk, interest rate risk, etc. The risks involved
at various levels are identified, monitored and managed on a constant basis
both through the ERP system and outside. The Company has the required insurance
coverage to protect all important insurable risks. Since the transaction volume
is very high compared to any normal organization, for regular operations the
process built into the ERP system is clearly defined to enhance internal
control system cutting across various functions. There are multi-function teams
to handle one-of-the-kind transactions and the teams are aware of the company's
thrust on internal control.
MATERIAL DEVELOPMENTS IN HUMAN
RESOURCES:
During the year, many initiatives have been implemented to have a strong focus
on employee relationships. Consistent strong growth in the company's operations
across various geographies has paved way for a number of people of various
nationalities in the Company.
FINANCIAL PERFORMANCE &
POSITION:
The financials of the Company and its subsidiaries in India are prepared in
accordance with the Generally Accepted Accounting Principles in India. The
Middle East, Singapore subsidiary Financials are prepared according to the
International Financials Reporting Standards and Singapore Financial Reporting
Standards respectively.
Analysis of Consolidated
Financials:
Revenues - Revenues increased by 20% to Rs.108840.000 Millions in the
fiscal year 2008 from Rs.90670.000 Millions mainly due to increased volumes in
IT space and substantial growth in Non-IT space and Service business. Revenues
from overseas subsidiaries contributed to 47% of the total revenues, in spite
of depreciation of US Dollar vs. Indian Rupees by about 11% during the year
compared to the previous financial year. Since overseas subsidiaries financials
are denominated either in US Dollar or in currencies which are pegged to US
Dollar, depreciation of US Dollar would impact the consolidated financials
adversely and any appreciation in the US Dollar would impact the financials
favourably.
Fixed Assets:
· Land and Building,
· Plant and Machinery
· Furniture and Fixtures
· Office Equipment
· Computers and Software
·
Vehicles
AS PER WEBSITE
Subject established in 1993 is today positioned as one of the
leading Supply Chain service provider in Information Technology, Digital
Printing category, Digital lifestyle category, Telecom, Consumer Durable
products. With its corporate office in Chennai, it has 39 Branch offices, 51
warehouses, 43 own service centers and 113 partner managed service centers
across India. A team comprising of over 750 highly skilled and committed
professionals helps the Company deliver its products and services to every corner
of the country. The team is supported by a robust IT and Communication
infrastructure connecting 133 physical locations of the company and a state of
the art ERP and e-commerce back bone. Subject has built its business on very
strong ethical and commercial fundamentals which has not only helped it to
consistently exceed the industry growth rate, but has also enabled to firmly
establish it as the "partner of choice" with most of its vendors and
business partners. A compounded annual growth rate of 65% over the past 12
years has enabled subject generate a revenue of over Rs.47175 million (over USD
1 billion) during fiscal 06-07, underlining the very strong foundation and
prudent practices on which the company's business practices have been built.
News:
August 06
, 2008
Redington plans to
set up 4 automated distribution centres
%20LIMITED-67636%2010-Dec-2008_files/image004.gif){kind=small}
T.E. Raja Simhan
Chennai, Aug. 5 For better utilisation of warehouse space and improved
operational efficiency, Redington India Limited intends to set up four
automated distribution centres (ADCs) in four metros at a total cost of Rs
1500.000 Millions- 2000.000 Millions.
The Chennai-based company is an end-to-end supply chain solutions provider for
global brands in IT and non-IT verticals.
It distributes products for companies such as Nokia, LG, Whirlpool, Microsoft
(Xbox) and Apple (iPod).
It recently added Imate (mobile phones) and Belkin (accessories for
Apple range of products).
The products it distributes come in very small (Belkin – 6 gm) to very large
(digital printing machine – 6 tonnes) sizes.
The company handles 100 tonnes of products a month out of Chennai and 600
tonnes across the country. Redington has 58 warehouses across the country.
Saving Cost
Today, Redington incurs an expenditure of Rs 140.000 Millions on rents. It
expects to save substantially because of the ADC.
Unlike the existing warehouses, in which the racks are ‘flat’ and more spread
out, the ADCs will feature ‘Very Narrow Aisle’ pallet rack system. Racks will
go up 40 ft, with not more than a metre separating two racks.
“We studied nearly 50 warehouses across in various countries to select the VNA model,”
Mr E.H. Kasturi Rangan, President, Redington, told Business Line.
The first ADC will come up 35 km from Chennai on the Chennai-Nellore Highways
at a cost of Rs 300.000 Millions.
The company will use Rs 250.000 Millions from the IPO proceeds it raised last
year and the balance through internal accruals, according Mr Rangan.
The ground breaking ceremony for the Chennai ADC happened on July 26.
The facility in 100,000 sq ft will be the ‘mother warehouse’ for Redington and
to be operational in March 2009 quarter.
The other three will come up in the next two years, he said on the sidelines of
the company’s annual general meeting.
Apart from saving in rent, Redington expects to save around Rs 5.000 Millions
in operating expenses from the fifth year, when the company would have
recovered its investments.
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 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.49.22 |
|
UK Pound |
1 |
Rs.73.03 |
|
Euro |
1 |
Rs.63.14 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
70 |
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 |
|