MIRA
INFORM REPORT
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Report Date : |
02.01.2008 |
IDENTIFICATION
DETAILS
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Name : |
D-LINK INDIA
LIMITED |
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Registered Office : |
L-5, Verna Electronic City, Verna Plateau, Goa - 403 722 |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
13.03.1993 |
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Com. Reg. No.: |
1341 |
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CIN No.: [Company Identification No.] |
L30007GA1993PLC001341 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRD03177G |
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PAN No.: [Permanent
Account No.] |
AAACD5159L |
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Legal Form : |
Public limited liability company. The company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturers and Marketers of Networking Products and Modems |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 7600000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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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
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Registered Office : |
L-5, Verna Electronic City, Verna Plateau, Goa - 403 722, India |
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Tel. No.: |
91-832-2783393/94/2783396/2783411 |
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Mobile No.: |
91-832-2783395 |
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E-Mail : |
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Website : |
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Corporate
Office : |
D- Link House, Plot No. 5, Bandra Kurla Complex Road, Off. CST Road, Santacruz (East), Mumbai - 400 098, Maharashtra |
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Tel. No.: |
91-22-2656 6696 / 6578 / 6623 |
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Fax No.: |
91-22-2652 8914 / 8476 |
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E-Mail : |
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Factory 1 : |
L-5, Verna Electronic City, Verna Plateau, Goa - 403 722, India |
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Tel. No.: |
91-834-2783394 / 2783411 |
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Fax No.: |
91-834-2783395 |
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E-Mail : |
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Software and
R&D Centre : |
# 65, 35th
Main, 100 ft. Ring Road, 2nd Stage, BTM Layout, Bangalore-560076,
Karnataka, India |
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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 |
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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
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Name : |
Mr. Kamalaksha Rama Naik |
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Designation : |
Chairman & Managing Director |
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Qualification : |
D. M. E., P. G. Diploma in Industrial Engineering, Diploma in Business Management |
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Date of Appointment : |
31.03.1993 |
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Other Directorships : |
Virtual Computers Private Limited – Director (8 Years) |
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Name : |
Mr. A. P. Chen |
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Designation : |
Director |
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Name : |
Mr. Tony An-Pang Tsao |
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Designation : |
Director |
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Name : |
Mr. K. M. Gaonkar |
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Designation : |
Director |
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Name : |
Mr. Dattaraj Salgaocar |
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Designation : |
Additional
Director |
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Name : |
Mr. Chandrasekhar
Kopparapu |
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Designation : |
Director |
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Name : |
Mr. Pankaj Baliga |
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Designation : |
Director |
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Name : |
Mr. R. T.
Krishnan |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Bhushan
Prabhu |
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Designation : |
Director –
Finance |
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Name : |
Mr. C. M. Gaonkar |
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Designation : |
Director – Corporate Affairs |
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Name : |
Mr. J. V. Avadhanulu |
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Designation : |
Director (R&D) |
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Name : |
Mr. Milind Tamhane |
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Designation : |
Vice President - Manufacturing |
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Name : |
Mr. Vijay Rane |
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Designation : |
Vice President – Manufacturing – (Active) |
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Name : |
Mr. Aravindan S. |
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Designation : |
Vice President – R&D |
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Name : |
Mr. Deepak Chodanker |
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Designation : |
Vice President – R&D |
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Name : |
Mr. Nitin Kunkolienker |
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Designation : |
Vice President – Commercial and Administration |
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Name : |
Mr. Shridhar Kadam |
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Designation : |
Vice President – Product Engineering |
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Name : |
Mr. Jayesh H Kotak |
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Designation : |
Vice President – Marketing |
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Name : |
Mr. Tushar Sighat |
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Designation : |
Vice President – Channel Business |
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Name : |
Mr. Venkatesh Kamath |
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Designation : |
General Manager – Sales (South) |
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Name : |
Mr. Debraj Dam |
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Designation : |
General Manager – Sales (South) |
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Name : |
Mr. Rajesh Sahore |
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Designation : |
Regional Head – West |
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Name : |
Mr. Yogesh Sharma |
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Designation : |
General Manager – Sales (North) |
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Name : |
Mr. K. Guruprasad Prabhu |
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Designation : |
Company Secretary |
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Name : |
Mr. Dharmendra Kumar |
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Designation : |
Director – Enterprise Sales |
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Name : |
Mr. Shayam Anaokar |
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Designation : |
Director - HR |
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Name : |
Mr. Prabodh Vyas |
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Designation : |
Director (Sales) |
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Name : |
Mr. K. V. S. S. S. Gunneswara Rao |
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Designation : |
Director (ISP and Telecom) |
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Name : |
Mr. Vinay Rane |
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Designation : |
General Manager – Production |
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Name : |
Mr. Rajaram Jadhav |
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Designation : |
General Managaer – Pre Sales/Tech Support |
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Name : |
Mr. Shekhar Kulkarni |
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Designation : |
General Manager – Sales (Central Areas) |
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Name : |
Mr. Vikas Pinjarkar |
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Designation : |
General Manager – SCS |
SHAREHOLDING
PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group2 |
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Indian |
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Individuals/ Hindu Undivided Family |
7815528 |
26.05 |
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Foreign |
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Bodies Corporate |
10898497 |
36.32 |
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Public shareholding |
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Institutions |
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Financial Institutions / Banks |
15030 |
0.05 |
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Foreign Institutional Investors |
2266531 |
7.55 |
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Non-institutions |
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Bodies Corporate |
1848249 |
6.16 |
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Individuals |
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Million |
6007791 |
20.02 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100
Million |
297666 |
1.00 |
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Any Other (specify) |
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Clearing member |
72472 |
0.24 |
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Trusts |
487375 |
1.62 |
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NRI’s |
295711 |
0.99 |
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TOTAL |
30004850 |
100 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers and Marketers of Networking Products and Modems |
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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
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Brand Names : |
“D-Link” |
PRODUCTION STATUS
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Networking Products |
Nos. |
5313100 |
4382836 |
GENERAL
INFORMATION
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Suppliers : |
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Bankers : |
Ø HDFC Bank Ø Bank of India Ø State Bank of India Ø Global Trust Bank Ø Citi Bank |
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Facilities : |
Secured by hypothecation of assets purchased under hire purchase
agreements. |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Deloitte Haskins & Sells Chartered Accountants |
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Collaborators : |
D-Link Singapore Pte Limited, Singapore |
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Subsidiaries : |
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Associates : |
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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 |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
60.010 |
60.010 |
60.010 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Employee stock options outstanding |
11.418 |
7.275 |
3.026 |
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4] Reserves & Surplus |
1837.310 |
1689.015 |
1526.154 |
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5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1908.738 |
1756.300 |
1589.190 |
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LOAN FUNDS |
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1] Secured Loans |
5.106 |
9.566 |
13.189 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
5.106 |
9.566 |
13.189 |
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DEFERRED TAX LIABILITIES |
64.206 |
64.306 |
57.906 |
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TOTAL |
1978.050 |
1830.172 |
1660.285 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
593.931 |
610.850 |
620.530 |
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Capital work-in-progress |
52.928 |
38.856 |
5.258 |
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INVESTMENT |
792.825 |
514.415 |
437.670 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
328.767
|
447.599
|
305.395 |
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Sundry Debtors |
492.954
|
635.936
|
689.657 |
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Cash & Bank Balances |
54.253
|
27.462
|
51.764 |
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Other Current Assets |
0.000
|
0.000
|
0.000 |
|
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Loans & Advances |
102.870
|
258.523
|
202.108 |
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Total Current Assets |
978.844
|
1369.520
|
1248.924 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
351.066
|
496.046
|
483.969 |
|
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Provisions |
89.412
|
207.423
|
168.128 |
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Total Current Liabilities |
440.478
|
703.469
|
652.097 |
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Net Current Assets |
538.366
|
666.051
|
596.827 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1978.050 |
1830.172 |
1660.285 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
2796.053 |
2750.250 |
2748.925 |
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Other Income |
78.811 |
93.904 |
0.000 |
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Total Income |
2874.864 |
2844.154 |
2748.925 |
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Profit/(Loss) Before Tax |
267.533 |
283.069 |
358.673 |
|
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Provision for Taxation |
55.589 |
50.261 |
75.142 |
|
|
Profit/(Loss) After Tax |
211.944 |
232.808 |
283.531 |
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Earnings in Foreign Currency : |
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Total Earnings |
124.899 |
114.644 |
102.789 |
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Imports : |
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Raw Materials |
971.300 |
1388.343 |
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Stores & Spares |
1.603 |
7.789 |
1232.920 |
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Capital Goods |
58.821 |
12.901 |
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Total Imports |
1031.724 |
1409.033 |
1232.920 |
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Expenditures : |
|
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|
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Manufacturing
and Other expenses |
1541.856 |
1898.072 |
|
|
|
Purchase of
traded goods |
994.738 |
589.956 |
|
|
|
Excise duty |
[10.326] |
9.232 |
2390.252 |
|
|
Depreciation |
76.332 |
60.670 |
|
|
|
Interest and finance charges |
4.731 |
3.156 |
|
|
Total Expenditure |
2607.331 |
2561.086 |
2390.252 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
642.100
|
708.400
|
|
Other Income |
|
53.100
|
40.700
|
|
Total Income |
|
695.200
|
749.100
|
|
Total Expediture |
|
598.000
|
640.100
|
|
Operating Profit |
|
97.200
|
109.000
|
|
Interest |
|
0.700
|
0.500
|
|
Gross Profit |
|
96.500
|
108.500
|
|
Depreciation |
|
17.600
|
23.800
|
|
Tax |
|
21.800
|
25.800
|
|
Reported PAT |
|
58.700
|
73.200
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.00 |
0.01 |
0.01 |
|
Long Term
Debt-Equity Ratio |
0.00 |
0.01 |
0.01 |
|
Current Ratio |
1.89 |
1.75 |
1.86 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
3.71 |
3.83 |
4.24 |
|
Inventory |
7.93 |
8.01 |
10.21 |
|
Debtors |
5.45 |
4.55 |
5.04 |
|
Interest Cover
Ratio |
57.89 |
92.26 |
116.65 |
|
Operating Profit
Margin(%) |
11.32 |
11.50 |
14.11 |
|
Profit Before
Interest And Tax Margin(%) |
8.84 |
9.49 |
12.27 |
|
Cash Profit Margin(%) |
9.37 |
9.74 |
11.46 |
|
Adjusted Net
Profit Margin(%) |
6.89 |
7.72 |
9.62 |
|
Return On Capital
Employed(%) |
15.22 |
17.49 |
24.65 |
|
Return On Net
Worth(%) |
11.90 |
14.34 |
19.50 |
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.
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.
PERFORMANCE
In the financial year 2006-07 the Company achieved a
turnover of Rs.3051.99 million as compared to Rs.3014.77 million in the
previous year.
The Net
Profit of the Company stood at Rs.219.27 million as compared to Rs.232.06
million in the previous year. The company has during the past 2 years
transferred a major portion of its motherboard business to its subsidiary,
Gigabyte Technology (India) Limited. This has resulted in the low revenue
growth as compared to the previous year. The profits were also lower as
compared to the previous year primarily due to increase in depreciation and
manpower costs.
The
company's core business of net working and cabling products grew at a healthy
rate of 19.24% as compared to the previous year. This growth was primarily led
by increase in sales from switches, wireless products, broadband modems and
passive networking products comprising of copper and fiber products.
SIGNIFICANT DEVELOPMENTS
During
the year the Company has completed the transfer of major portion of its
motherboard business to its subsidiary Gigabyte Technology (India) Limited
('Gigabyte'). This has helped the company to improve its product mix by bringing
focus to the core business of networking and cabling. The company has entered
into various agreements with Gigabyte for carrying out the contract
manufacturing of motherboards for them, providing service, repair & back
office support. This will lead to substantial increase in income from services
during the next financial year onwards.
The
Company has entered into a tie up with Aptec Distribution LLC as distributor
for entire passive networking products under the Digi-Link range of products in
the territories of UAE, Oman, Qatar, Bahrain and Kuwait The Digi-Link brand of
passive products include the end to end range of copper and fiber structured
cabling products to support network infrastructure requirements.
The
Company during the year has disposed off some of the old Surface Mount
Technology (SMT) lines and replaced it with High Speed modem and efficient RoHS
compliant SMT Line which will allow the company to manufacture a wide variety
of IT Products.
The
Company has tied up with various consumer durables and information technology
(CDIT) retail chains which will help the company to tap the opportunities
available through the Retail revolution which is happening throughout the
country.
EMPLOYEE STOCK OPTION PLAN
The Company has
an ongoing Employee Stock Option Scheme, which is being administered by the
D-Link (India) Limited ESOP Trust and Compensation Committee of Directors
Constituted as per SEBI Regulations.
During the year
under the said Scheme D-LINK (INDIA) LIMITED - ESOP Trust granted 92000 options
to its eligible employees at Rs.60/- per share.
AWARDS & RECOGNITION
The Company has
received several awards and recognitions during the year under review such
as:
a)
Channels Choice Award 2007 for Networking LAN and Wireless
LAN.
b)
360 Magazine - Golden Rhino Award - 2007 for Networking Cables,
Routers and Switches.
c)
Voice & Data 100 award for Top Modem Company year 2006.
d)
DQ Channel - Channel Choice Award - 2006 for Networking
Products.
NASSCOM - The National Association of Software and Services Companies, has
included D-Link India Limited in its 'Showcase of Innovation Book 2006' for its
work on IPPBX and Routers.
MANAGEMENT DISCUSSION AND ANALYSIS
On the Move:
The fast paced
Indian economy enjoys the status of having one of the highest growth rates in
the world. Having registered a growth of 8.4% in 2006, the economy is projected
to stay steady at the existing levels in 2007. The IT industry's contribution
to the GDP has increased from 1.2% in 1999-2000 to an estimated 4.8% in 2005-06
and is expected to rise to 7% by 2007-08.
The IT Wave:
In the backdrop
of such a scenario, the Indian economy has emerged as a lucrative window of
opportunity across all industries. It has succeeded in enticing global giants
to set up businesses in the domestic market. This advent of international
players has put immense competitive pressure on the domestic companies in terms
of upgrading their IT infrastructure.
Consequently
there is a wave of IT investments across banks, financial service institutions,
telecoms, manufacturing, government, human resource, education and other
industries.
Industry
sources predict that technological investments by the Indian SMBs are expected
to increase in excess of 10% in 2007. Demand for lifestyle and entertainment IT
products such as broadband connections for the Home and SOHO customers, is also
slated to rise. Moreover, the Government of India has undertaken several
initiatives in a bid to promote India as a preferred destination for the IT
hardware sector.
Unveiling the Wi-Fi Potential:
With the
government turning its attention towards 'unwiring' India, the relatively
unexplored Wi-Fi market is envisaged as the next wave of growth.
Moreover, the
impending launch of 3G will open doors to a community of data-capable,
multi-band smart phones and mobile devices being manufactured by D-Link, into
the domestic marketplace. The Indian Ministry of Communications and Information
Technology has declared the year 2007 as the Year of Broadband', indicating
that this transformation tops the agenda.
The Indian
Wi-Fi marketplace is projected to grow from US$ 41.5 mn during 2005-06 to US$
744 mn by 2012. With the necessary enablers already in place, the growth,
development and deployment of Wi-Fi, a familiar wireless broadband technology,
across the country is no longer a distant dream.
According to
V&D 100, owing to a drop in the price of wireless access routers, the
complete low price routers are expected to be out of market latest by
2008.
Going forward,
IP telephony is identified as the foundation to unify communication
applications. According to a Gartner survey, voice and data convergence based
on IP telephony and VoIP is expected to be implemented in more than 95% of the
Indian enterprises by 2010. Apart from SMB, Consumer VoIP also known as VoBB is
also envisioned as a potential lucrative market.
With winds of
change sweeping across the country, a digital India with ubiquitous broadband
connectivity is in the making.
Strides into the SMB Segment:
With a variety of globally accepted products to its credit, the Company is
traditionally strong in the SOHO market. Leveraging on this experience, it has
stepped up the value chain by catering to the demands of the Small and Medium
Business (SMB) segment. D-Link's foray into the SMB marketplace is marked by
internationally accepted switches and cabling products.
The Forte:
D-Links
technical strength is instrumental in driving its growth. The Company's metier
is defined by research and development of innovative products. Certain products
such as IPPBX and routers, developed locally at its R&D Center, were
selected by NASSCOM amongst the top 100 innovations.
In a bid to
deliver quality par excellence, its technical expertise is further complemented
by its state-of-the-art manufacturing facilities.
Global Compliance:
Over the past
three years, D-Link has upgraded its manufacturing capability by installing one
new highly automated SMT line. The Company has RoHS compliant facilities at
Goa. Today, customers in the United States and Europe insist on lead-free
manufacturing. Subsequently, this trend is expected to spread to India. RoHS
compliance is expected to empower D-Link to meet such future demands of the
Indian market. All its manufacturing capabilities adhere to the ISO 14000
environmental management standards.
Refurbishing the Business Model:
Moving along
its growth path, D-Link has developed a resilient, self sustaining business
model. The Company has riveted its focus in establishing a strong presence
across the entire horizontal value chain. It has in place, research and
development for cutting edge products; manufacturing; the best marketing
infrastructure in the business and a pan-India presence in terms of sales and
support. In a bid to understand its customers better, the Company has regional
distribution partners to provide a local touch. Overall, the Company channels
its products through 22 regional distributors, who further operate through
dealers and value added resellers.
Having set up a
well-oiled customer service and technical support set-up, D-Link is well
positioned to be the vendor of choice.
R&D:
R&D Driven Product Pipeline:
D-Link has
developed its own unique routers such as DRO 250, which have a good market. The
Company has also developed the entire range of IPPBX, IP-Phone and Gateways. It
is in the process of developing Video Phones, which will be launched in the
market during the current year.
The ADSL
Router, which was locally developed in the Company's facility in Goa, has
gained wide market acceptance during the very first year of its launch.
FINANCIAL REVIEW
During
FY.2006-07, D-Link reported a marginal revenue growth at Rs.3051.99 million, as
compared to Rs.3014.77 million during the previous year. The Company has grown
by more than 19% in its core business of networking and cabling, as compared to
the previous year.
Income from
services has recorded a notable increase from Rs.4.02 million, in the preceding
year, to Rs.24.79 million, during the fiscal under consideration. D-Links other
income escalated to Rs.89.48 million as compared to Rs.54.62 million in the
previous year. This is primarily attributed to robust Forex gains of Rs. 16.85
million, as compared to only Rs.2.64 million in the previous year.
The operating
profits, comprising of profit before depreciation, interest and tax, were
marginally higher at Rs.348.60 million during FY. 2006-07, as compared to
Rs.346.89 million in the previous year. Depreciation stood at Rs. 76.33
million, in comparison with Rs. 60.67 million in the preceding year. Additions
of fixed assets, mainly, plant and machinery as part of normal business
operations, are accountable for higher depreciation. During FY. 2006-07, the
Company also revised the useful life of motor vehicles to 5 years from the
earlier rate of 9.5% p.a. as per Schedule XIV, resulting in an increased
depreciation of Rs.7.32 million.
D-Link recorded
a cash profit of Rs.343.86 million, in comparison with Rs.343.73 million in the
previous year. Profit before tax stood at Rs.267.53 million, as compared to
Rs.283.07 million during FY. 2005-06.
Networking Products:
The revenues
from networking products increased from Rs. 903.50 million in the previous year
to Rs. 1109.90 million for the year ended 31st March, 2007, registering a
healthy growth of 22.85%. Consequently, networking products now account for a
hefty 36.37% of the overall revenues as compared to 29.97 % in the previous
year. This is also attributed to the fact that, high-end Foundry switches
recorded a growth of 27% and the wireless products witnessed an increase of
56%, in value terms. The Company also bagged significant orders from large
enterprises for Foundry Switches.
Internet
working Products: During FY. 2006-07, D-Link recorded lower revenues from
internet working products as compared to the previous year, primarily due to
the fact that dial-up modems are getting phased out as more and more people are
switching over to broadband products. . However, the Company has made
significant progress in broadband products, where the growth was in excess of
50%, as compared to the previous year.
Motherboards:
Over the past 2 years, D-Link has transferred a substantial portion of its
motherboard business to the subsidiary M/s Gigabyte Technology (India) Limited.
As a result, the revenues from the motherboard segment were significantly lower
during FY. 2006-07, as compared to the previous year.
Passive Products:
The Company's
passive product segment, comprising of copper and fiber products, continued to
maintain its impressive growth rates. Revenues from the Structured cabling
products for the year ended 31st March, 2007, were recorded at Rs.1006.70
million, witnessing an increase of 37.41%, as compared to the previous
year.
OUTLOOK
The Big Indian Opportunity:
The burgeoning
Indian economy unveils an array of opportunities for companies with strong
credentials such as D-Link. The Government has instilled emphasis on a strong
broadband penetration into the country.
India is poised
to witness a phenomenal growth in the wireless broadband segment due to several
macroeconomic and social factors. Furthermore, the rapid increase in the usage
of laptops is the key driver for Wi-Fi products in developing countries.
Similarly, the Indian laptop market is slated to grow by 100%, creating an
environment conducive for the use of Wi-Fi.
Industry
sources reveal that India is the second largest market for VoIP services in
Asia after China. Projections reveal that 40% of enterprises are expected to
have completed the convergence of all their voice and data networks to a single
network by 2010. 95% of the large and midsize companies are expected to have
started the process by then. The Indian IP telephony is expected to register an
average of 60% (CAGR) over the next 3-5 years. According to a Frost &
Sullivan report, the Indian IP PBX market is expected to grow from 2005 to 2012
at a CAGR of 21.5%. With years of deliberate efforts behind it, the Company is
well-poised to benefit from these business prospects.
Going Strong in the SOHO Segment:
Today, the home
user category is witnessing a crying need for computing and affordable
communication infrastructure. As an eminent player in the SOHO segment, the
Company is geared to satiate the increasing demands of this marketplace, with
its world class products in switching, routing, wireless, VOIP and the
broadband space among others.
Widening Horizons:
Leveraging its
strength in the SOHO segment, D-Link has ambitious plans to move up the value
chain, to serve the SMB and Enterprise markets. The Company has entered into
strategic joint ventures to extend its horizons in terms of both, its market
presence as well as its product portfolio. With its alliance with Foundry
Network, USA, D-Link aims to explore new markets, while catering to the needs
of the Enterprise segment.
Exploring the SMB Arena:
There is a
growing demand for convergence network in the emergent SMB sector. In a bid to
tap the potential of this segment in an organised manner, the Company is
focussing on new models that represent total solutions. It has strategically
developed products to suit the needs of the market. To combat cost constraints
within the SMB segment, D-Link (India) has successfully developed routers with
in-built security features. DRO 250 and DRO 210 are the products that also
include the basic firewall features for the SOHO and SMB segments.
Manufacturing Proficiency-A Growth
Enabler:
In addition to
a robust technological base, D-Link is set apart as a leading player in the
industry through its worldclass manufacturing infrastructure. An efficient
manufacturing set-up in Goa has empowered the Company to cater to the design
requirements and the rigorous operating conditions of its customers, features
unique to D-Link. With its products finding very good adaptability and low
rejection rates, the Company is in a position to utilise its expertise in
electronic manufacturing and tap huge opportunities in the Electronic
Manufacturing Services (EMS) and the contract manufacturing space.
RISKS, THREATS AND CONCERNS
Penetrating the SMB Segment:
While
opportunities abound in the Indian and global networking space, challenges are
not far behind. Unlike the SOHO segment, the approachability of SMBs is low
Moreover, the SMB marketplace is price sensitive. This poses a challenge in
terms of penetrating the segment and creating a market share, commensurate with
the strength of being the only company to provide convergence solutions. Armed
with exceptional technical expertise and world-class manufacturing capabilities
to develop customised total solutions for the SMB segment, D-Link is well
placed to address this concern. In a bid to add more SMBs to its list of
satisfied customers, the Company is also consolidating its marketing team to
instill a focused approach. Such measures enable it to intimately understand
the requirements of the market.
Extending Reach to the Enterprise Segment:
Today, D-Link
enjoys a distinct reputation of developing Value-for-money' technology
products. However, the concern lies in the acceptability of the high technology
products. To address this challenge, the Company has adopted a holistic
approach through branding and positioning. It imparts rigorous training to its
sales and channel partners. It is also exploring innovative ideas to reach out
to the Enterprise market through its channel partners and distributors.
Fixed Assets
- Leasehold Premises
- Buildings
- Plant and Machinery
- Electrical Installations
- Furniture
- Fittings and Office Equipments
- Air Conditioners
- Motor Vehicles
- Computers
Website Details :
Company Overview
Founded in 1986, D-Link is a global leader in the design, manufacture and
marketing of advanced networking, broadband, digital, voice and data
communications solutions. Following their company motto, "Building
Networks for People", D-Link continually meets the global networking and
connectivity needs of digital home consumers, small office professionals,
small- to medium-sized businesses, and enterprise environments.
D-Link's core competency is in Ethernet connectivity. In fact, they are the
global leader in providing network connectivity solutions to small and
medium-sized business. From the beginning, D-Link engineers have researched,
designed and manufactured innovative, standards-based networking solutions.
They sell their state-of-the-art hardware at the best prices. Price may be the
deciding factor for many new customers, but D-Link innovation, reliability and
service keeps them loyal year after year.
A major contributor to their success is their established and expanding network
of global distribution and delivery channels that brings products to more than
100 countries every day. They do more than meet the growing demand for computer
networking and communications solutions - they fuel it. Their development of
global distribution channels in more than 100 countries has resulted in
double-digit growth every year for 20 years. D-Link surpassed the $1 billion
revenue milestone in 2005, driven by record sales in every geographic region of
the world.
Glogal Presence
D-Link's international headquarters are located in Hsinchu ,
Taiwan , Republic of China. More than 90 global offices serve North America,
Asia and Europe, including the North American headquarters in Fountain Valley ,
California . D-Link maintains strategic operations in Canada , the United
Kingdom , Germany , France , Spain , Italy , Greece , Turkey , Sweden , Norway
, the Netherlands , Denmark , Finland , Russia , Israel , the Middle East,
South Africa , Chile , Australia , Japan , Vietnam , Singapore , China , India
and other countries on five continents.
Innovation Leader
Their engineers have been key contributors to the development of the rapidly expanding home and business networking environment they take for granted today. D-Link has been awarded patents and copyrights on a variety of technology platforms - including Application Specific Integrated Circuit (ASIC) computer chips, hardware technology designs, software applications and other intellectual properties. D-Link product solutions are high-performance and feature-rich by design.
As a key contributor to the Digital Home Working Group (DHWG), D-Link embraces industry standards as criterion for the development of new and innovative connectivity and communications solutions for home and business. D-Link products are certified by the FCC, the Wi-Fi Alliance and CableLabs.
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.39.43 |
|
UK Pound |
1 |
Rs.78.34 |
|
Euro |
1 |
Rs.57.76 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
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 |
|
72 |
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. |
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 |
|