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You can view full text of the latest Director's Report for the company.

BSE: 532805ISIN: INE891D01026INDUSTRY: IT Networking Equipment

BSE   ` 96.90   Open: 95.00   Today's Range 95.00
97.90
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138.50
Year End :2018-03 

Board's Report

The Members,

The Directors are pleased to present their Twenty Fifth Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended on March 31, 2018.

The Directors feel that it is appropriate to present the consolidated financial performance of the Company in the manner set out below:

(Rs, in Crore)

Particulars

2017-18 2016-17

India

Consolidated

Overseas

Consolidated

Total

Consolidated

India

Consolidated

Overseas

Consolidated

Total

Consolidated

Revenue from operations

15,443.9

28,015.5

43,459.4

15,779.9

25,334.7

41,114.6

Other income

24.4

14.7

39.1

26.4

15.0

41.4

Total Revenue

15,468.3

28,030.2

43,498.5

15,806.3

25,349.7

41,156.0

Total Expenses:

a) Cost of Goods Sold

14,339.1

26,717.5

41,056.6

14,775.0

24,023.0

38,798.0

b) Employee Benefits

187.0

466.0

653.0

165.0

462.3

627.3

c) Other Expenses

522.1

411.3

933.4

434.7

429.8

864.5

Profit before interest, Depreciation and Tax

420.1

435.4

855.5

431.6

434.6

866.2

a) Interest Expenses

101.1

66.9

168.0

81.7

75.3

157.0

b) Depreciation and Amortization Expenses

20.9

36.0

56.9

17.2

37.5

54.7

Profit before Tax

298.1

332.5

630.6

332.7

321.8

654.5

Tax Expense

104.7

41.5

146.2

118.4

59.4

177.8

Minority Interest

1.1

1.7

2.8

0.3

12.2

12.5

Profit after Tax

192.3

289.3

481.6

214.0

250.2

464.2

Your Directors have made the following appropriations out of the standalone profits of the Company:

(Rs, in Crore)

Surplus in the Standalone Statement of Profit and Loss

Balance as per the last Balance Sheet as on March 31. 2017

1,085.34

Profit for the Financial Year 2017-18

183.92

Sub total

1,269.26

Less: Appropriations

Final Dividend paid (FY 2016-17)

91.96

Dividend Distribution Tax on Dividend paid *

14.32

Balance at the end of the year as on March 31, 2018

1,162.98

* Net of the Dividend Distribution Tax credit of Rs, 4.4 Crore on account of dividend received from subsidiary companies.

Financial Performance of the Company

The Standalone and Consolidated Financial Statements of the Company for the Financial Year 2017-18 have been prepared in accordance with the Indian Accounting Standards (Ind AS) as required under the Companies Act, 2013.

The consolidated revenues of your Company was Rs, 43,498.5 Crore as against Rs, 41,156.0 Crore in the previous year registering a growth of 5.7% , while the consolidated net profit for the year grew by 3.7 % to Rs, 481.6 Crore for 2017-18 as against Rs, 464.2 Crore in the previous year.

The Earnings Per Share (EPS) on a consolidated basis (based on weighted average number of shares during the year) increased to Rs, 12.0 for the year under review as compared to Rs, 11.6 for the previous year.

A detailed analysis of the financial performance of the Company is given as part of the Management Discussion and Analysis report, which forms part of this report.

Statement on the salient features of the financial statements of Subsidiaries and Associate Companies in the prescribed Form AOC 1 is appended as part of this report. The details of the subsidiaries incorporated during the financial year under review are given as part of notes to the consolidated financial statements.

Dividend

Although it has been a challenging year for the Company, the Directors are pleased to recommend an enhanced dividend of Rs, 2.40 per share (i.e. 120% of the Face Value) for the year ended March 31, 2018 as compared to Rs, 2.30 per share (i.e. 115% of the Face Value) for the previous year.

INDIAN OPERATIONS

INFORMATION TECHNOLOGY PRODUCTS

The IT procurement landscape in India is changing with digitalization creating new revenue streams and new platforms. Digital disruption is being progressively witnessed in most industries, leading to technological advancement in all sectors.

Computing and printing

Transition to the Goods and Services Tax (GST) regime adversely affected the retail sector, as many of the retailers were forced to liquidate the pre-GST inventory. Further, post-GST, disruptions in supply-chains led to challenges in re-stocking at partners’ stock levels. Seasonality and online festive sales drove positive consumer spending throughout the year, despite depressed consumer sentiment heralded by low employment opportunities, static income levels and increasing fuel prices. Proactive planning and alignment with E-Commerce companies in Personal Computing space enabled us to capitalize on the accelerated demand fulfillment in the unaddressed market place and keep up the sales momentum.

There was a spurt in demand from MSME and SME segments for single function printers to print documents for GST compliance. Also, Multi-Function Printers gained preference due to reduction of tax rates by the government. During the year under review, there was re-alignment of exclusive territories in HP Printing and Supplies Business and your Company strengthened its foot-print in key strategic areas in HP Printing.

Commercial PC business witnessed stable growth across the year, capitalizing on key opportunities in Government/BFSI and Education sector. Our strategy of focusing on diverse opportunities helped us in growing our business in midmarket and SME segments with smaller ticket opportunities, thereby helping us in mitigating the challenge posed by the postponement of capex plans by large corporate.

Enterprise and Infrastructure

Though FY'18 was marred by challenges in various forms on account of GST implementation, there has been a gradual increase in terms of investment in the IT infrastructure market. Digital India initiative fuelled much needed growth, with investments from both Central and State Governments as also from verticals like BFSI and Telecom. Adoption of outsourced model by enterprises in India lead to increasing investment decisions by the Data Centre Providers. Expansion of both Captive and Outsourced Data Centres boosted the Server market. E-commerce transactions and hybrid IT infrastructure in India fuelled the need for robust Cyber Security solutions. Converged Infrastructure and Software Defined Infrastructure in Data Centres were the new rising demands from CIOs during the year. Your Company's deep engagement with renowned brands enjoyed a healthy share of enterprise Infrastructure business.

MOBILITY

During the year under review, India saw consolidation of the cellular market and aggressive roll out of 4G, thus aiding the demand for both feature phones and smart phones. However, in the case of smart phones, the demand was inclined towards the mid-priced smart phones with higher storage space, better processors and other advanced features, thus impacting the demand of premium smart phones.

For your Company, Mobility segment contributed nearly 20% of the annual India revenues for FY 18, encompassing major vendors such as Apple, Google and Samsung. While the changes in distribution rights of Apple iPhone during the year under review resulted in a decline in the Company's market share, given demand for iPhones in India and plans by Apple for its new product launch, we expect your Company would be in a position to benefit greatly from its association with this iconic brand. Your Company has a strong exclusive partnership with Google for the distribution of its Smartphone brand ‘Pixel’. Given the strength of the brand, Pixel promises to deliver continued and increasing value in the coming years.

EMERGING BUSINESS

During the year under review, your Company completed one full year in the distribution of Solar Equipment and Health & Medical Equipment (HME).

In Solar Equipment segment, your Company focuses on the Solar PV Roof Top space, distributing Solar PV products, its components and raw materials. During the year, industry wide tax issue on account of Anti-Dumping Tariff plagued the business. However, your Company doubled the sales revenue from this vertical in FY' 18. With India’s ambitious target of attaining 100,000 MW of solar capacity by 2022, there are immense growth opportunities in this space.

In HME segment, your Company distributes Mid-size Equipment & Instruments, which forms a large segment of the industry. Since HME is an unorganized sector, your company had initial challenges in establishing structured method of distribution. However, these structural challenges are being gradually overcome by showcasing the relevance and value of a well-organized national distributor which offers the backbone of high quality systems and processes, impeccable financial pedigree and ease of doing business.

SERVICES

Cloud Services

IT Professionals in Indian organizations have witnessed a shift in increasing adoption of cloud computing. According to research report from India-based CIO Klub and Ernst & Young LLP, businesses are moving to the cloud to lower their IT infrastructure and administrative costs and to adopt a flexible and scalable model for IT.

Your Company has invested towards becoming a premier cloud solutions provider. Your Company helps partners to manage their entire multi cloud business through Fully Automated, Self-service Unified Digital Platform. It focuses on deeper engagement with partners & their customers, by managing each customer's unique IT needs through a well-structured assessment followed by a documented plan to migrate, implement and manage the cloud infrastructure for optimisation and performance. Your Company is currently supporting its partner's customers in the following market segments:

- Small & Mid-market customers: Cloud adoption, web application hosting, backup & storage solutions.

- Enterprise customers: Data Center transformation, Hybrid cloud, ERP on cloud, Disaster recovery solutions, business applications, Big data & loT and Advance technology enablement on cloud.

- Cloud customers: Cost/Performance optimization, monitoring, management and security solutions.

Other Services

Digital Printing industry, being one of the financially unorganized sectors, experienced a double whammy on account of demonetization followed by GST implementation. Despite the challenges, we saw a constant growth in print-page volume and service revenues. Your Company's continued focus on generating demand by conducting various marketing campaigns/initiatives including training programs for new application development and road shows, yielded success in building the customers’ business.

Your Company has been making investment in distribution of 3D Printing products, which is touted to be the next major advancement in the printing industry. Your Company has strong partnerships with prime brands in this segment. During the year, it signed up with Hewlett Packard for their 3D Printers and partnered with Carl Zeiss as their exclusive distributor for their 3D scanners in India. Your Company has also successfully established an on-demand part manufacturing facility called "Visual I" (read as Visual Eye) to engage with the customer on an end to end basis from the designing stage until the manufacturing process.

INDIAN SUBSIDIARIES

Your Company has two Wholly Owned Subsidiaries in India, viz., Pro Connect Supply Chain Solutions Limited (Pro Connect) and Ensure Support Services (India) Limited (Ensure). Your Company capitalizes on the growth opportunities available in the supply chain solution arena, through Pro Connect. Ensure is carrying out the after-sales support service business for various IT Hardware and Technology products as well as provides Infrastructure Management Services. Pursuant to the Order of National Company Law Tribunal, Chennai Bench, Cadens worth (India) Limited, an erstwhile wholly-owned Subsidiary, was merged with the Company with an Appointed Date of April 1, 2016. The Order has been made effective on July 26, 2017, upon complying with all the relevant requirements under the Companies Act, 2013

Pro Connect Supply Chain Solutions Limited

Pro Connect provides end to end supply chain solutions to various customers across different industry verticals. It focuses on the opportunities in the fast growing Third Party Logistics (3PL) segment and is a neutral logistics service provider, operating pan India, with 170 warehouses encompassing 6.3 Mn sq. ft of warehousing space. Pro Connect offers its customers customized supply chain solutions enabling cost optimization while driving efficiency and agility. Pro Connacht’s processes are certified with ISO 9001:2008 Quality Management System (QMS). Rajprotim Supply Chain Solutions Limited, a Subsidiary of Pro Connect, has also achieved a remarkable growth through customer satisfaction, which has added few more to its exclusive clientele.

The intent of being a "Preferred Service Provider" is evident from Pro Connects ability to generate incremental revenues from its existing customers as well as its success in adding new customers. With 165 customers, it is noteworthy that the contribution from external business (other than Remington) has increased to 79%. Pro Connect is well equipped to handle the warehousing & logistics needs of varied industry verticals. As a testimony to this, during the year, it ventured into the highly regulated Pharma industry which requires specialized infrastructure and capabilities. During the frenetic and high volume festive season, Pro Connect has extended exceptional support to the E-Com players, by providing timely and effective warehousing and logistics support. Pro Connects Mission Critical Service Division provides Supply Chain Services for products, requiring strict adherence to stipulated timelines, in order to meet the criticality levels.

With GST now in place, Pro Connect is expected to witness further growth momentum in its organic business as well as through further expansion of key service offerings like, in the transportation segment.

Ensure Support Services (India) Limited

Ensure provides the entire gamut of post sales services and Infrastructure Management Services (IMS), focusing on both B2B and B2C businesses. Considering the market dynamics of IT and Mobile product services, Ensure continues to invest in automation for higher efficiency in operations and costs.

In the way forward, it intends to continue growing the IMS and Warranty businesses, wherein it has strong positioning and invest in the high-end businesses like Managed Security Services and Managed Print Services, which offer good growth opportunities.

INDIAN ASSOCIATE

Remington (India) Investments Limited is an Associate Company of your Company. It has a wholly owned subsidiary, Currents Technology Retail (India) Limited ("Currents") which operates a chain of Apple retail stores. During the year, Currents opened two new small-format stores and witnessed higher sales, especially in the second half of the year, facilitated by the Apple product line-up and the new GST regime.

OVERSEAS OPERATIONS

Your Company's overseas operations are carried out through two wholly owned subsidiaries; Redingt on International Mauritius Limited, Mauritius (RIML) addressing Middle East, Turkey, Africa (META) region and Redington Distribution Pte Limited, Singapore (RDPL) addressing the South Asian region comprising of Sri Lanka, Bangladesh, Nepal and Maldives markets.

Remington Gulf FZE , a Wholly Owned Subsidiary of RIML, addresses more than 26 markets in Middle East, Turkey and Africa. The year saw many significant developments -geopolitical, economic, taxation et al.

Serious differences between the Arab Quartet (UAE, Saudi Arabia, Bahrain & Egypt) and Qatar eventually snowballed into an economic blockade on Qatar. Apart from rising levels of regional uncertainties, this also resulted in a significant reduction in revenue for Redington Gulf from Qatar. The impasse continues and has also brought into question the viability of the 6-member Gulf Cooperation Council, which includes Qatar.

The Turkish Lira continued to depreciate against the US Dollar due to a variety of concerns -political, economic situation in the country apart from Turkey’s role in geopolitics. In Kenya, presidential elections were held twice due to poll related violence and other concerns.

A very significant development during year under review was the introduction of Excise duty and VAT in UAE and KSA. Apart from having an adverse effect on inflation in these two countries, muted demand is expected to slow down domestic sales in UAE for 2-3 quarters before picking up again.

Inspite of a changing business and economic landscape Redington Gulf FZE has continued to deliver record growth in revenues and profits while as also retaining its position as the largest technology distributor in the region.

In order to address the growing e-commerce market in Turkey, Redington Gulf set up a subsidiary of Arena to focus on this business segment.

Redington Gulf's subsidiary Linkplus, Turkey continues to grow with addition of key brands to its portfolio.

Computing & Printing

The PC market globally bucked the recent trend and recorded a flat growth and followed a similar trend in META as well.

Redington Gulf continued to demonstrate growth in the total number of PCs shipped and continues to have the highest market share in the region for key PC vendors such as HP, Dell and Lenovo.

Its persistent effort to focus on effective working capital management continued to bear results during this year as well.

Enterprise & Infrastructure

Redington Gulf consolidated its hyper convergence portfolio with addition of Nutanix as well as cybersecurity and emerging security portfolio with Imperva and Palo Alto Cloud Security distribution contracts in the Middle East. Key steps to demonstrate use cases for Big Data Analytics and loT in our connected office were initiated as well to showcase to customers a very unique solution centre - Red Vault.

Significant contribution made by the Value Added distribution business were duly recognized by many global vendors with notable industry accolades such as Global Innovation Award for Red Vault, VAD of the Year - Reseller ME and VAD of the Year - GEC awards by Enterprise MEA.

Mobility

The Mobility business of Redington Gulf for the year crossed a landmark revenue of USD 1 billion further cementing its position as a leading Mobility distributor in MEA. The year also saw the addition of the brands to the distribution portfolio including Nokia.

Cloud Computing, Big Data Analytics and Internet of Things

In order to provide value added offerings in this very important area, Redington Gulf set up a consulting entity -Citrus Consulting, to provide niche services such as Cloud Transformation Services, Data Analytics/Big Data and loT.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The details of changes in the Directorships during the Financial Year 2017-18 is given below:

(a) Details of Appointment:

Ms. Chen, Yi-Ju was appointed on the Board as an Additional Director (Non-Executive Nominee Director) with effect from December 26, 2017. Your Company has received notice from a member proposing Ms. Chen, Yi-Ju's appointment as Director of the Company. A Resolution for appointment of Ms. Chen, Yi-Ju as a Non-Executive Nominee Director of the Company is included in the notice of the ensuing Annual General Meeting.

(b) Details of Resignation:

During the year, Ms. Suchitra Rajagopalan, Independent Director & Mr. Lin, Tai-Yang, Non-Executive Director tendered their resignation from the services of the Company, on September 28, 2017 and December 26, 2017 respectively. The Board took note of the same and acknowledged their continued assistance and guidance provided for the growth and welfare of the Company during their tenure as director.

Mr. B. Ramaratnam, Non-Executive Director was appointed on the Board w.e.f May 24, 2016. Up to the Financial Year 2015, Mr. Ramaratnam was a partner of Deloitte Haskins & Sells, the erstwhile Statutory Auditors of the Company. As per Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to be an Independent Director, a Director inter alia must comply with the requirement that he/she was not a partner of the Auditors firm for a period of 3 financial years before the financial year in which the appointment is considered. Pursuant to this, Mr. Ramaratnam was appointed as a Non-Executive Director. The cooling period of 3 years as mentioned above was completed on March 31, 2018 and he fulfilled the criteria for an Independent Director and is eligible for appointment as Independent Director.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on May 21, 2018 appointed Mr. Ramaratnam as an Independent Director for a period of 5 years with effect from May 21, 2018 to May 20, 2023, subject to the approval of the members of the Company in the ensuing Annual General Meeting.

Mr. Udai Dhawan and Mr. Tu, Shu-Chyuan, Directors of the Company are liable to retire by rotation, and being eligible, have offered themselves for re-appointment.

Brief particulars of the Directors who are getting appointed / reappointed are furnished in Annexure A to the Notice of the Annual General Meeting.

At the Annual General Meeting held on July 28, 2017, Mr. Raj Shankar was re-appointed as Managing Director for a period of 5 years with effect from July 26, 2017. Being a Non-Resident, his appointment is subject to the approval of Central Government. The Company has filed the requisite forms within due date and awaiting approval.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance with Section 134(5) of the Companies Act, 2013, the Directors of the Company, state that:

a) In the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the annual accounts on a ‘going concern' basis;

e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CREDIT RATING

During the year,

- CRISIL (An S&P Global Company) has upgraded its long-term ratings on the bank facilities of the Company to ‘CRISIL AA /Stable' from ‘CRISIL AA- / Positive'. The short-term rating and commercial paper have been reaffirmed at ‘CRISIL A1 ' (their highest rating in this category).

- ICRA (A Moody's Investors Service Company) has upgraded its long-term ratings on the bank facilities of the Company to [ICRA] AA (Stable) from [ICRA] AA-(Stable). The short-term rating and commercial paper rating have been reaffirmed at [ICRA] A1 (their highest rating in this category).

These high ratings from the two leading rating agencies benefit the Company in its borrowing program and helps in reducing the interest costs in India.

AUDITORS

The Company's Statutory Auditors, BSR & Co. LLP ("BSR"), Chartered Accountants (Firm Registration No. 101248W/W - 100022) issued their report on the Standalone and Consolidated Financial Statements of the Company and the same is appended here to this Report. The Auditors’ Reports on the Standalone and Consolidated Financial Statements do not contain any qualification, reservation or adverse remark.

OTHER REPORTS

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on the Corporate Governance, Business Responsibility and Management Discussion and Analysis is attached to this Annual Report.

DISCLOSURES

Board and its committees

The details of the composition of the Board and its committees and its meetings held during the financial year are given in the Corporate Governance Report.

Independent Director Declaration

All the Independent Directors have given declaration as required under Section 149(7) of the Companies Act, 2013.

Internal Financial Controls

The Company prepared a comprehensive document on Internal Financial Controls (IFC) in line with the requirement under the Companies Act 2013, which included Entity Level Controls (ELC), Efficiency Controls, Risk Controls, Fraud Preventative Controls, Information Technology General Controls (ITGC) and Internal Controls on Financial Reporting (ICFR). A brief note on IFC including ICFR is given in Annexure A to this Report.

The Board opines that the internal controls implemented by the Company for preparation of financial statements are adequate and sufficient.

Risk Management

The Risk Management Committee monitors the Risk management practices of the Company. The Committee meets periodically and reviews the potential risks associated with the Company's business and discusses steps taken by the management to mitigate the same.

The Board of Directors reviewed the risk assessment and procedures adopted by the Company and is of the opinion that there are no risks which may threaten the existence of the Company.

Details of Employee Benefit Scheme

The disclosures as required under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 is given in Annexure B to this Report. The certificate from the statutory auditors of the Company stating that Employee Share Purchase Scheme, 2006, Employee Stock Option Plan 2008 and Redington Stock Appreciation Right Scheme, 2017 have been implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed in the general meeting is also appended thereto.

Information on Conservation of Energy and Technology Absorption

A. Conservation of Energy:

i. Steps taken for Conservation of Energy:

The operations of your Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy by way of optimizing usage of power and virtualization of Data Centre.

B. Technology Absorption:

i. Effort made towards technology absorption:

Your Company continues to use the latest technologies for improving the quality of services it offers. Digitalization adoption and absorption across cloud technology, virtualization and mobility resulted in better operational efficiencies and Turnaround Time (TAT). Business Intelligence (Bl) and Analytics facilitate key decisions and improves process efficiency.

ii. Import of Technology:

The Company has not imported any technology for its usage during the year.

iii. Expenditure on Research and Development:

Since your Company is involved in the Wholesale Distribution of Technology Products, there is no expenditure incurred on research and development.

Foreign Exchange earnings and outgo

The details of Foreign Exchange earnings and Expenditure during the year are given below:

Earnings in Foreign Currency:

Particulars

Rs, in Crore

Rebates & discount

111.84

Dividends from overseas subsidiaries

16.42

FOB value of exports

0.71

Total

128.97

Expenditure in foreign currency:

Particulars

Rs, in Crore

Royalty (cost of software included under purchases)

25.96

Foreign travel

0.06

Director's sitting fee

0.12

Director's commission

0.54

Total

26.68

Policy on Appointment and Remuneration of Directors

The Board on the recommendation of the Nomination and Remuneration Committee has laid down a policy on appointment of Directors and remuneration for the Directors, Key Managerial Personnel and Other Employees. The same is enclosed as Annexure C to this report.

The above policy is also accessible from the following link: https://redinatonindia.com/imaaes/Policv Remuneration.pdf

Performance evaluation of the Board and Committees

The details of annual evaluation made by the Board of its own performance and that of its committees and individual Directors and performance evaluation criteria for Independent Director laid down by Nomination and Remuneration Committee are enclosed as Annexure D to this report.

Particulars of Employees

The Particulars of employees required under Section 197 (12) of the Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been given in the Annexure E appended hereto and forms part of this report.

Particulars of Loans given, Investments made,

Guarantees given and Securities provided

Particulars of loans given and investments made are given under Notes 15 and 6 respectively to the Standalone Financial Statements.

Corporate Social Responsibility

The Corporate Social Responsibility (CSR) Committee has formulated and recommended to the Board a policy on CSR indicating the activities to be undertaken by the Company. The report on CSR is given under Annexure Fto this report.

Secretarial Audit Report

Pursuant to Section 204 of Companies Act, 2013, a Secretarial Audit was conducted by a Practicing Company Secretary, Ms. CS R. Bhuvana. The report furnished by the Auditor is enclosed as Annexure G to this report and such report does not contain any qualification, reservation or adverse remark.

Vigil Mechanism

The Company has implemented a vigil mechanism to provide a framework for the Company's employees and Directors to promote responsible and secure whistle blowing. It protects employees who raise a concern about serious irregularities within the Company. A brief summary of the vigil mechanism implemented by the Company is annexed under Annexure H to this report.

Extract of Annual Return

Extract of Annual Return of the Company in Form MGT-9 is annexed herewith as Annexure I to this Report.

Web links

Particulars

Weblinks

Policy on Related Party Transaction

http://redingtonindia.com/images/PolicyondealingwithRelatedPartyTransactions.pdf

Policy for determining Material Subsidiaries

http://redingtonindia.com/images/PolicyonMaterialSubsidiaries.pdf

Criteria of Making payment to Non-Executive Directors

http://redingtonindia.com/images/PolicyonpaymenttoDirectors.pdf

Details of Familiarization programmes to Independent Directors

https://redingtonindia.com/images/FamiliarizationProgrammes.pdf

Others

- There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

- The Company has not received any deposits as defined under Companies Act, 2013 during the Financial Year 2017-18.

- The Board decided not to transfer any amount to the reserves.

- None of the transactions with related parties falls under the scope of section 188(1) of the Act. Information on transactions with related parties pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure J in Form AOC-2.

- There are no material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2018 and the date of this report.

- The Dividend Distribution Policy pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 is disclosed in Annexure K and on the website of the Company.

- The Company has complied with the applicable secretarial standards.

COMPLIANCE WITH OTHER REGULATIONS Auditors Certificate on Downstream Investment

With regard to the downstream investments in Indian Subsidiaries, the Company is in compliance with the FEMA regulations and the Company has obtained a certificate from the statutory auditors in this regard.

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has framed a policy on prevention of Sexual Harassment of Women to ensure a free and fair enquiry process on complaints received from the women employee about Sexual Harassment. No complaint was reported by any employees pertaining to Sexual Harassment during the year under review.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the shareholders including the principal shareholders, suppliers, customers, bankers, business partners/associates, for their consistent support and encouragement to the Company. Please join me and the Board members in conveying our sincere appreciation to a 11 employees of the Company, its Subsidiaries and Associates, for their hard work and commitment. Their dedication and competence has ensured that the Company continues to be a significant and leading player in the industry.

INDEX OF ANNEXURES TO THE BOARD’S REPORT

A Note on Internal Financial Controls

B Disclosures as required under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014

C Policy on appointment of Directors and remuneration for the Directors, Key Managerial Personnel and Other Employees.

D Details of Performance evaluation of Board & its Committees and the Evaluation criteria for Independent Directors

E Particulars of employees required under Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

F Report on Corporate Social Responsibility

G Secretarial Audit Report

H Summary of the vigil mechanism

I Extract of Annual Return

J FormAOC-2

K Dividend Distribution Policy

On behalf of the Board of Directors

Place: Chennai J Ramachandran

Date: May 21,2018 Chairman