Home  »  Company  »  Redington (India) Lt  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Redington (India) Ltd.

Mar 31, 2017

Board’s Report

To the Members,

Your Directors are pleased to present their Twenty Fourth Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended on March 31, 2017.

The Directors feel it appropriate to present the consolidated financial performance of the Company in the manner set out below, which factors the prevailing geo-political and economic environments and the associated risks and rewards.

(Figures in Rs, /Crore)

Particulars

India

Consolidated

2016-17

Overseas

Consolidated

Total

Consolidated

India

Consolidated

2015-16

Overseas

Consolidated

Total

Consolidated

Revenue from operations

15,779.9

25,334.8

41,114.7

13,372.7

22,069.5

35,442.2

Other Income

28.3

13.1

41.4

27.7

6.3

34.0

Total Revenue

15,808.2

25,347.9

41,156.1

13,400.4

22,075.8

35,476.2

Total Expenses:

a) Cost of goods sold

14,8017

24,022.8

38,824.5

12,492.6

20,879.2

33,371.8

b) Employee Benefits

165.0

462.3

627.3

148.1

391.7

539.8

c) Other Expenses

410.0

428.1

838.1

340.2

406.7

746.9

Profit before Interest, Depreciation and Tax

431.5

434.7

866.2

419.5

398.2

817.7

a) Interest Expenses

81.7

75.3

157.0

87.0

93.5

180.5

b) Depreciation & Amortization Expenses

17.2

37.5

54.7

14.3

32.6

46.9

Profit before Tax

332.6

321.9

654.5

318.2

272.1

590.3

Tax Expense

118.4

59.4

177.8

110.8

35.4

146.2

Minority Interest

0.3

12.2

12.5

-

20.6

20.6

Profit after Tax

213.9

250.3

464.2

207.4

216.1

423.5

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

(Figures in Rs, /Crore)

Surplus in the Statement of Profit and Loss

Balance as per the last Balance Sheet as on 31st March 2016

1,013.6

Profit for the Financial Year 2016-17

201.7

Sub total

1,215.3

Less: Appropriations

Final Dividend paid (FY 2015-16)

84.0

Special (Interim) Dividend paid (FY 2016-17)

80.0

Dividend Distribution Tax on Dividend paid *

29.2

Balance at the end of the year as on 31st March 2017

1,022.1

* Net of the Dividend Distribution Tax credit of Rs, 2.8 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 2016-17 have been prepared, for the first time, in accordance with the Indian Accounting Standards (Ind AS) as required under the Companies Act, 2013.

The consolidated revenues of your Company was Rs, 41,156.1 Crore as against Rs, 35, 476.2 Crore in the previous year registering a growth of 16% . The consolidated net profit for the year grew by 9.6% to Rs, 464.2 Crore for 2016-17 as against Rs, 423.5 Crore in the previous year. The Company completed ten years of listing during the financial year with revenue CAGR of 17% and profit CAGR of 16%.

The Earnings Per Share (EPS) on a consolidated basis (based on weighted average number of shares during the year) increased to Rs, 11.6 for the year under review as compared to Rs, 10.6 for the previous year.

A detailed analysis on 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 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

During the last financial year, the Board of Directors had declared a Special (Interim) Dividend of Rs, 2/- per share (i.e. 100% of the Face Value), to commemorate the completion of 10 years of listing on the bourses.

In addition, considering the improved performance of the Company, the Directors are pleased to recommend an enhanced dividend of Rs, 2.30 per share (i.e.115% of the Face Value) for the year ended 31st March 2017 as compared to Rs, 2.10 per share (i.e. 105% of the Face Value) for the previous year.

Indian Operations Information Technology Products

Personal Computing & Printing

Rising incomes have led to improvements in the standard of living. This, coupled with quicker adoption to changing trends has perceptibly transformed consumer behavior and spending patterns. These changes have negatively impacted the demand and purchasing frequency of IT products by the consumers. This trend which revealed itself over the past few years, is now more evident with proliferation of low-cost, big screen smart phones, which offer a compelling substitute to a PC for content consumption.

The absence of forceful demand drivers along with the effects of demonetization in the second half of the year adversely impacted the consumer segment. Your Company, however, overcame these challenges and grew its revenue in the PC space faster than industry, through systematic expansion of the partner base and effective capitalization of opportunities presented by the E-Commerce industry.

Some strategies which helped us grow the overall Consumer Group revenues are:

- Proactive strategic alignment with Acer, a brand which was looking to recover its growth momentum in the Consumer PC market.

- Rapid alignment with HP''s Go-to-Market (GTM) strategy and to their objectives for growing their share in the A3 print segment. This, coupled with alignment with HP in their GTM strategy for Ink-Tank based printers, helped us generate growth in the Small Office/Home Office segments and gain wallet-share with HP.

- Successful capitalization of a growing opportunity in the E-Commerce segment''s demand for external hard drives. This was possible due to a strong collaboration with Western Digital (WD) and proactive planning towards Just-In-Time (JIT) inventory to efficiently cater to the segment''s demand pattern.

Future growth in the Consumer segment would be ensured through active participation in all possible growth opportunities (including the gaming segment), enabled by strong partnerships with key vendors & partners and through incremental enhancement of the portfolio.

Commercial, Enterprise & Infrastructure

The changing business mix of your Company has mirrored the growing technology adoption by Indian customers over the years. Your Company has kept pace with the fast changing demand pattern for technology products and solutions through proactive investments in skills and resources. This has enabled your Company evolve from a Volume Distributor of basic PC products to a Value Added Distributor for Enterprise grade Systems and recently, to a Solution oriented Distributor for its Technology vendors and partners.

Your Company''s revenues in the Commercial, Enterprise & Infrastructure space grew on the back of strong engagement with technology vendors and aggressive participation in all available opportunities.

Growth in the Enterprise segment during FY 16-17 was fueled largely by infrastructure upgrades carried out by customers in the Telecom and BFSI segments. Investments in IT products and solutions remained guarded in the other Enterprise sectors. After showing buoyancy over the past few years, demand in the SMB and mid-market segment remained lackluster during the last fiscal.

Future growth in this segment is expected to be fueled strongly by Government investments for digitization of the country through the Smart City & Digital India projects. Your Company is strongly positioned to leverage the opportunities that will potentially arise from these investments.

Mobility

Over the years, your Company has successfully built a niche for itself in the Mobility space through strong partnerships with select Smartphone brands. Apart from being one of the largest partners for the Apple iPhone portfolio, during FY 16-17 it also secured the contract to distribute Google''s Pixel brand of smart phones in India.

The company considers E-Commerce as a valuable GTM path and during the year under review, generated 16% of its domestic mobility revenues from the E-Commerce players.

The Smartphone space will continue to provide growth opportunities in the coming years and your Company will aim to take advantage of the same through judicious addition to its portfolio.

Services

Cloud Services

Cloud Computing being clearly established as the future of buying and consuming IT infrastructure and Services, your Company has made significant investments over the past two years towards building its capabilities as a Distributor and Services provider for Cloud products and Solutions. It is building its offerings in the Cloud space in partnership with the Big Four in the Cloud Business - Amazon Web Services (AWS), Microsoft, IBM and Oracle. Your Company offers Cloud Consulting, Migration, Support and Managed Cloud Services and has gained early recognition in this area from Oracle as "The Cloud (laas/PaaS) Transformation Partner of the year 2016-17".

It has launched a "state of the art" Unified Digital Cloud Business Platform, integrated across multiple cloud technology vendors, products and Cloud Services. This essential, self-service platform offers your Company''s partners and customers a seamless interface for selecting and ordering products and services from a catalogue, while allowing a choice of monthly / quarterly / annual billing, as per individual consumption patterns.

Other Services

Your Company was an early investor in the digital printing space and we are now witnessing a transition of several applications from conventional commercial printing to digital printing. Printing technology providers like HP have developed products and solutions to address the "print on-demand" requirements of a rapidly growing class of customers in this digital age. It is a matter of great pride for your Company that its "Centre of Excellence" for Digital Printing Technology is one of its kind in the country and has been recognized by HP as best-in-class in Asia.

Application and usage of 3D Printing technology is evolving at a rapid pace and your Company expects increasing adoption of this technology in verticals like Automobiles, Education, R&D, Manufacturing, Aviation, Defense and Health Care, where there is a growing demand for customized parts at an optimal price, with the shortest possible lead time for design and development. To capture this opportunity and build an early mover advantage, your Company is investing in a digital parts manufacturing unit.

Automated Distribution Centers

The Automated Distribution Centers (ADCs) located in Chennai & Kolkata are leased out to and operated by ProConnect Supply Chain Solutions Limited, a wholly owned subsidiary. Operations out of these ADCs have demonstrated your Company''s capabilities in bringing efficiency through automation and process orientation in a cost-efficient manner in compliance with best practices in the Supply Chain business. The ADCs are equipped with Very Narrow Aisle (VNA) design and use hand-held, Radio Frequency controlled devices. Phase 2 expansion of Chennai ADC has been rolled out to meet the growing capacity needs for such state-of-the-art infrastructure.

Indian Subsidiaries

Cadens worth (India) Limited - (Cadens worth)

Changes in Vendor GTM strategies and evolving market dynamics has nullified the specific advantage of housing select Distribution portfolios under Cadens worth (India) Limited. Hence, in order to maximize synergies and bring in cost optimization through integrated resource utilization, your Company decided to recommend merging of the operations of Cadensworth with that of your Company''s. The Board of Directors, during its meeting held on May 24, 2016 gave its consent to the proposal and decided to merge Cadensworth (India) Limited with the Company with effect from April 1, 2016, under a scheme of arrangement (merger), subject to necessary statutory and other approvals.

Both National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) have communicated no objection in this regard. Pursuant to the notification by the Ministry of Corporate Affairs, the petition for the approval of the Scheme filed with the Hon''ble Madras High Court has been transferred to National Company Law Tribunal (NCLT), Chennai Bench.

Pending approval of the Scheme by NCLT, the results of the said subsidiary as at and for the year ended March 31, 2017 have not been included in the Standalone Financial Statements. However, it is part of Consolidated Financial Statements.

ProConnect Supply Chain Solutions Limited - (ProConnect)

ProConnect Supply Chain Solutions Limited (ProConnect), the wholly owned subsidiary of your Company, is engaged in providing supply chain solutions to varied industry verticals in India. Apart from your Company, ProConnect has 123 independent customers, who together contributed 65% of the consolidated total revenue for FY 16-17. For the year under review, on consolidated basis, Revenue grew by 64 % and Profit After Tax by 106 % YoY.

ProConnect is an emerging integrated logistics service provider. With a network of 150 warehouses spanning an area of 4.8 Million sq.ft. of storage space, it focuses on offering customized supply chain solutions to customers, pan India.

Robust systems, well-defined processes and tight control over every aspect of its services are the hallmark of ProConnect''s business offering to its customers. IP enabled physical surveillance ensure safety of goods and sanctity of stocks through avoidance of handling damage, pilferage and theft. A Disaster Recovery (DR) facility has also been set up in Chennai to enable seamless and continuous operations.

In an effort to take advantage of technological advancements, ProConnect has moved its workloads to the Cloud and has also invested in Customer Relationship Management (CRM) tools. Moving its Warehousing Management Systems (WMS) to the Cloud has enabled the Company realize 99.9% uptime for its operations.

Some of its Value-added offerings include GPS tracking for all high value shipments, enabling accurate cargo tracking & TAT management and electronic validation of receipt against ex-warehouse deliveries.

ProConnect has tapped into opportunities provided from E-Commerce segment and now manages Fulfillment Centers for some of the major E-Commerce players.

ProConnect expects to derive benefits from transition to the GST regime by way of consolidation of warehouses as well as increased business opportunities for its integrated services. ProConnect''s investments and diligent process changes would enable your Company to transition seamlessly to the GST era.

To augment its presence in the Eastern and North-Eastern region of India, an area offering high growth potential, ProConnect has acquired a 76% stake in Rajprotim Supply Chain Solutions Limited a Warehousing and Logistics Company headquartered in Kolkata.

Ensure Support Services (India) Limited - (Ensure)

Ensure Support Services India Limited (Ensure), a wholly owned subsidiary of your Company, provides complete post-sales services covering call center support, national service delivery, warehousing & logistics including imports & re-exports, backend repairs, and online CRM for complaint and inventory management services for a range of products that includes mobile phones, desktops, laptops, printers, plotters, servers, networking components and storage products. It operates through a network of 40 company owned and 156 partner service centers.

Moving up the value chain, Ensure is investing in increasing its capabilities in the Enterprise space. The company has built a customer base of 1800 for its Infrastructure Management Services. It is building skills in Managed Security Services and Managed Print Services, potentially high growth areas in this digitized and Opex oriented age. Ensure also offers last mile support for ecommerce companies in India.

Initiatives like Work Force Management, Central Control Tower for monitoring and managing field engineers, Spare Parts forecasting system for improved fulfillment rate has enabled Ensure upgrade its performance and productivity levels. This is further evidenced by the results of online customer satisfaction surveys, which have been better than industry standards.

Indian Associate

Redington (India) Investments Limited is an Associate Company of your Company. It has a wholly owned subsidiary, Currents Technology Retail (India) Limited ("Currents") which manages a chain of retail stores across India. The company focuses operations in specific clusters of markets in the North, South and Eastern regions. During the year, the company has consolidated its brand in these respective catchments, backed by a strong Apple product line-up.

Overseas Operations

Your Company''s overseas operations are carried out through two wholly owned subsidiaries; Redington 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.

During 2016-17, RDPL as a consolidated entity, posted strong double digit growth in Earnings. It is expected that it will continue to grow in the coming years.

For Redington Gulf FZE (Redington Gulf), a wholly owned subsidiary of RIML addressing the META region, the year gone by was yet another period filled with turmoil due to varying challenges across the region - depreciating currencies in Turkey & Nigeria (as also continuing constraints on repatriation of US Dollars from Nigeria), coup attempt & its aftermath of political uncertainty in Turkey and a spate of credit defaults in the UAE markets, significantly heightening credit risk.

Increased credit risk in the UAE has resulted in an appreciable reduction in the appetite of the credit insurers. Redington Gulf has initiated certain changes to its risk management practices and has also taken measures to restrict extension of credit to resellers in the UAE. The business landscape in the Gulf Cooperation Council (GCC) countries is expected to undergo a significant change with the planned implementation of VAT effective January''18 in the region.

However, undeterred by the challenges, Redington Gulf has maintained its record of impressive growth in revenues and profits while retaining its position as the largest technology distributor in the region. You would also be pleased to know that Redington Gulf has been adjudged as one of the Top 24 "Great Places to Work" in the UAE.

Your company''s subsidiary Arena decided to divest its stake in Adeo, as this investment was no longer a strategic fit to its business.

Personal Computing & Printing

The PC market globally and in the META has continued to decline, though the rate of decline has slowed down. In spite of this declining industry trend, Redington Gulf continued to demonstrate growth in the total number of PCs shipped. It has also fortified its position with certain key vendors such as HP and Dell.

To further address the challenges of declining segment growth, Redington Gulf focused on significantly improving its Working Capital efficiencies. These efforts brought about rich dividends with a significant reduction in Working Capital deployment. It is committed to continuing these steps towards efficient Working Capital management.

In the printing segment, Redington Gulf now has a comprehensive print portfolio with the addition of brands such as Ricoh and Epson. In addition, a key initiative undertaken was to commence distribution of the HP commercial line of printers (A3), which is a focus area for the vendor due to its huge potential.

Converged Infrastructure

The Enterprise customers in the region have demonstrated a growing tendency of opting for Value-for-Money, mid-level infrastructure, rather than the traditional Capex-intensive, system-heavy solutions. Redington Gulf is well poised to leverage this shift, aligning itself with Converged and Hyper-Converged infrastructure providers such as EMC VXRail, Pivot3 and Simplivity (recently acquired by HPE).

With the networking space being transformed through "Software Defined Networking", Redington Gulf has positioned itself to exploit opportunities in this space by strengthening its alliances and investing strategically in partnerships with key vendors like VMware, NSX, etc. Expanding its reach into newer market segments, it has partnered with Huawei, a company which has been rapidly gaining market share in the enterprise networking space.

In order to showcase its capabilities in Private Cloud and Software Defined Networking Solutions to potential end-customers, Redington Gulf has invested in a state-of-the-art Solution Center - "Red Vault", boasting of the largest transparent touch screen interface in the region.

Software and Security Solutions

Software Solutions and Enterprise Linux continue to generate demand and Redington Gulf''s strategic alliance with Red Hat, the leader in the software space is a key relationship in this area. We would continue to expand and invest in our partnership with Red Hat.

Redington Gulf has partnered with Fortinet, which, according to IDC, is the number one security vendor in the region. We have highly-skilled pre-sales consultants, giving the capability to execute major security projects for different industry verticals. We plan to sign up with key end-point and network security vendors, while acquiring skills in the area of consulting services on Cyber Security.

Mobility

Over the last few years, Redington Gulf''s reputation as a leading Telecom distributor was limited to Africa. However, with the acquisition of the distribution agreement for iPhones for KSA during FY 16-17, in addition to UAE and Africa, it now has a dominant position in the Mobility distribution in these 3 regions.

In addition to a good brand portfolio, Redington Gulf has built distribution reach in the Middle East through a fleet of vans that cater to multiple reseller points in Tier-1 cities, as well as resellers in Tier-2 towns.

Cloud Computing, Big Data Analytics and Internet of Things

To position itself as a relevant partner in the Cloud Computing space, Redington Gulf has entered into strategic alliances with leading Cloud providers in the region - Microsoft and Amazon Web Services. In order to address the opportunities presented by growing Cloud adoption in the region, it has developed "Red Cloud", a Cloud aggregation portal. The portal serves as a marketplace and one-stop shop for Cloud solutions, thereby ensuring hassle free migration for the customers

The company recognizes the growing importance of Big Data Analytics in studying business trends and for developing effective business strategies. By on boarding Splunk, a Magic Quadrant Leader on Big Data Analytics, Redington Gulf is developing the competency to take this technology to the market and building a pipeline as the technology gathers momentum.

Directors and Key Managerial Personnel

The details of changes in the Directorships during the Financial Year 2016-17 is given below:

a) Details of Appointment:

Name

Designation

Date of Appointment

Mr. E.H. Kasturi Rangan

Whole Time Director

May 24, 2016

Mr. B. Ramaratnam

Director

May 24, 2016

Mr. Udai Dhawan

Director

January 10, 2017

b) Details of Resignation/Retirement:

Name

Designation

Date of Resignation

Mr. M. Raghunandan

Whole Time Director

May 24, 2016

Mr. N. Srinivasan

Director

May 24, 2016

Mr. R. Jayachandran

Director

September 30, 2016

Mr. Nainesh Jaisingh

Director

January 9, 2017

Mr. R. Srinivasan

Director

February 2, 2017

The Board place on record their appreciation of the services rendered by each director during their tenure in the Company.

During course of the year, Mr. Nainesh Jaisingh, citing his added roles and responsibilities within his organization, resigned from the Board and Mr. Udai Dhawan, Managing Director and Head of Standard Chartered Private Equity in India, was appointed on the Board as an Additional Director effective 10th January 2017. Your Company has received notice from a member proposing Mr. Dhawan''s appointment as Director of the Company, along with the requisite deposit. Resolution for appointment of Mr. Udai Dhawan as Director of the Company is included in the notice of Annual General Meeting.

The tenure of appointment of Mr. Raj Shankar as Managing Director will come to an end on 25th July 2017. The Board of Directors at their meeting held on 25th May 2017 have approved re-appointment of Mr. Raj Shankar as Managing Director for a period of five years with effect from 26th July 2017 subject to the approval of shareholders in the ensuing Annual General Meeting and the approval of the Central Government, since he is a non-resident.

Mr. B. Ramaratnam 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 resumes of the Directors who are getting appointed / reappointed are furnished in the Notice of Annual General Meeting.

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, 2017, 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, 2017 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 (A S&P Global Company) has reaffirmed its rating on the long-term bank facilities of your Company as AA -. However, it has upgraded the outlook from "STABLE" to "POSITIVE". The current rating stands at AA- Positive (read as double A minus, Positive). The rating on the short-term debt and bank loan facilities had been reaffirmed at ''CRISIL A1 '' (read as CRISIL A one plus), which is the highest rating for this category.

- ICRA (A Moody''s Investors Service Company) reaffirmed its ratings for the long-term fund based facilities as ''ICRA AA-'' (read as ICRA Double A minus). It has also reaffirmed its rating on the short-term debt program/commercial paper, fund and no fund based facilities at ''ICRA A1 '' (read as ICRA A one plus), their highest rating in this category.

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

Auditors

The Company''s Statutory Auditors, Deloitte Haskins & Sells ("DHS"), Chartered Accountants (Firm Registration No. 008072S) 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 does not contain any qualification, reservation or adverse remark.

In terms of Section 139 of the Companies Act, 2013 the term of appointment of DHS, will end at the conclusion of the 24th Annual General Meeting.

The Board at its meeting held on 25th May 2017, considering the recommendation of the Audit Committee, recommended the appointment of BSR & Co. LLP, Chartered Accountants, (Firm Reg No 101248W/W-100022) as Statutory Auditors for a period of five years commencing from the conclusion of the 24th Annual General Meeting , subject to the approval of shareholders of the Company at the ensuing Annual General Meeting .

The Company has received a certificate from BSR & Co. LLP, Chartered Accountants to the effect that their appointment, if made, would be in accordance with the provisions of the Companies Act, 2013, and they are not disqualified in terms of provisions of the Companies Act, 2013, from being appointed as Statutory Auditors of the Company. BSR & Co. LLP, Chartered Accountants are subjected to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

Other Reports

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

Disclosures

Board and its committees

The details of composition of 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 in terms of Section 149(6) 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, implements and monitors the Risk management practices in the Company. This Committee meets periodically and reviews the potential Risks associated with the Company and discusses steps taken by the management to mitigate the same.

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 Stock Option Plan 2008 and Employee Stock Purchase Scheme, 2006 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 facilitates key decisions and improves process efficiency.

ii. Import of Technology:

The Company has not imported any technology 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 Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows is given in notes 39 and 40 of the standalone financial statements.

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.

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 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 Note 14 and 5 respectively to the Standalone Financial Statements. Corporate Social Responsibility

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

Secretarial Audit Report

Pursuant to Section 204 of Companies Act, 2013, a Secretarial Audit was conducted by a Practicing Company Secretary, Mrs. 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.

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 2016-17.

- 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 31st March 2017 and the date of this report.

-The Dividend Distribution Policy pursuant to SEBI (LODR) Regulations, 2015 is disclosed in Annexure K and on the website of the Company.

We blinks

Policy on Related Party Transaction http://redinatonindia.com/imaaes/PolicvondealinawithRelatedPartvTransactions.pdf

Policy for determining Material Subsidiaries http://redinatonindia.com/imaaes/PolicvonMaterialSubsidiaries.pdf

Details of Familiarization Programmes http://redinatonindia.com/imaaes/Familiarizationproarammes.pdf

Criteria of Making payment to Non http://redinatonindia.com/imaaes/PolicvonpavmenttoDirectors.pdf

Executive Directors

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 FDI 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 Sexual Harassment of Women to ensure a free and fair enquiry process on complaints received from women employees against Sexual Harassment. No complaint was reported by any women employees pertaining to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, during the year under review.

Acknowledgment

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 all employees of the Company, its Subsidiaries and Associate 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.

On behalf of the Board of Directors

Place : Chennai J Ramachandran

Date : May 25, 2017 Chairman


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Twenty Second Board's Report of your Company and the Audited financial statements for the year ended March 31,2015.

Your Company and its fifty one subsidiaries operate in India, Middle East, Turkey, Africa and South Asian countries. Your Company is in the business of Wholesale and Value-Added Distribution of technology products to the Consumer, Small and Medium Business (SMB), Commercial and Enterprise segments. It also offers end to end supply chain solutions and post sale support services.

The Directors feel it appropriate to present the financial performance of the global company as a whole in the manner set out below, which factors in the prevailing geo-economical environment and the associated risks and rewards.

(Figures in Rs. /Crores)

2014-15 India Overseas Particulars Consolidated Consolidated

Revenue from operations 13,022.73 18,532.13

Other Income 42.79 25.03

Total Revenue 13,065.52 18,557.16

Total Expenses:

a) Cost of goods sold 12,217.25 17,515.65

b) Employee Benefits 134.59 333.13

c) Other Expenses 323.61 336.55

Profit before Interest, 390.07 371.83 Depreciation and Tax

2013-14 Total Total Particulars Consolidated Consolidated

Revenue from operations 31,554.86 27,944.88

Other Income 67.82 60.21

Total Revenue 31,622.68 28,005.09

Total Expenses:

a) Cost of goods sold 29,732.90 26,289.81

b) Employee Benefits 467.72 410.56

c) Other Expenses 660.16 585.11

Profit before Interest, 761.90 719.61 Depreciation and Tax

(Previous year figures have been regrouped wherever necessary to conform to the current year's classification)

The affairs of subsidiaries and an associate are conducted by respective Boards of Directors. These have been audited by their Statutory Auditors. The Consolidated Financial Statement of the Company and its subsidiaries and associate should therefore be read in conjunction with respective financial statements, accounting policies, financial notes, Cashflow statements, and Statutory Auditors' reports thereon.

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

(Figures in Rs. /Crores)

Profits of the Company for the Financial Year 2014-15 181.96

Less: Proposed Dividend @ Rs. 1.90 per 75.95 Equity Share of Rs.2/- each (i.e. 95% of the Face Value)

for the year ended March 31,2015 13.39 Dividend Distribution Tax thereon *

Balance transferred to Surplus in 92.62 Balance Sheet

* Net of Dividend Distribution Tax credit of Rs. 94 lakhs on account of dividend received from subsidiary companies.

Financial Performance of the Company

The consolidated revenue of your company was Rs. 31,622.7 Crores as against Rs. 28,005.1 Crores in the previous year with a CAGR of 17% for five years. The consolidated net profit for the year under review was Rs. 386.5 Crores as against Rs. 336.6 Crores in the previous year with the CAGR of 14% for the last five years.

The Earnings Per Share (EPS) on consolidated basis (based on weighted average number of shares during the year) increased to Rs. 9.67 in the year under review as compared to Rs. 8.43 in the previous year.

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

Statement on salient features of financial statements of Subsidiaries and Associate 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

Considering the improved consolidated performance of the Company the Directors are pleased to recommend an enhanced dividend of Rs. 1.90 per share (i.e. 95% of the Face Value) for the year ended 31st March 2015 as compared to Rs. 0.90 per share (i.e. 45% of the Face Value) for the previous year.

Information Technology Products

Personal Computing & Printing

Growth in demand of Personal Computing devices (Desktops and Notebooks) remained depressed during FY 14-15. As per IDC, the total number of units sold in India from April 14 to March 15 demonstrated flat to low single digit growth.

Brands like Wipro, HCL, Toshiba, Sony and Samsung have exited the Indian market which is now primarily served by HP, Lenovo, Dell and Acer. These brands gained market share as they filled the void left by the smaller brands.

While demand of Consumer notebooks remained positive, total number of Commercial notebooks sold de-grew as there were no major Education related projects floated by any State Government.

HP and Lenovo, the largest PC vendors in India displayed very strong growth and your Company's close engagement with these brands enabled it to take advantage of their growth story.

Tablet as a category showed muted growth owning to large screen Smartphones (phablets) eating away its market share. However, given our strong engagement with Multinational PC Vendors, we expect the tablet category to register significant growth in the period going forward.

Demand for printing equipment and consumables remain stagnant with all brands struggling to increase the demand for printing applications.

The evolution of new printing categories resulting from the growth in Social Media and Education sectors, have failed to compensate for the drop in "print pages" in the Enterprise and Commercial sectors.

HP remains an overwhelming leader in the printing and consumable supply and we continue to maintain a steady share in their business pie.

The Digital printing vertical registered close to 25% growth in FY 14-15 over last fiscal year. As digital press provides features like speed, convenience for short-runs and personalisation over offset printing, your Company is positive about growth outlook going forward.

Commercial, Enterprise & Infrastructure

With overall demand for industry products and services not showing enough momentum, large enterprises remained conservative in investing in and adopting new technologies and products. Liquidity remained tight and interest rates high further reducing the appetite for investment in technology products and solutions.

With huge payments stuck in Government infrastructure projects, large System Integrators ("SIs") have been extremely reluctant to participate in new tenders and this resulted in projects being re-tendered and in some instances, scrapped, as the minimum numbers of quotations were not received. Your Company's business to such SIs has consequently been impacted significantly during FY 14-15. Since a significant part of your Company's business is dependent on supporting partners who take part in such large infrastructure related projects, we hope that going forward the government will take effective measures to offer remedy to delays in project payments.

Creating the Infrastructure for "Digital India" and "Smart City" initiatives coupled with revival of investments in the e-governance space is expected to provide impetus for large deals involving Servers, Storage, Networking Products, Software & Security Products and Audio / Video surveillance equipment. These projects would be expected to be executed by Large SIs and Solution Providers. Your Company has well established business relationships with all these organizations and this will allow us to participate in supplying the equipment and the solutions necessary for the successful implementation of these projects.

Cloud Services

The shift in the consumption pattern of IT products and services by technology customers towards converting their purchase of IT asset from a Capital expenditure to an Operating expenditure based model is gathering momentum in India. This is resulting in IT products and services being offered by various vendors in a "pay-as-you-use" model, where IT Infrastructure and Services need not be owned by the customer, but leased out and consumed as and when required and in the quantity required.

This is expected to result in significant disruption in the current business model of technology distribution and your company has recognized the imperative of getting ready to address this business reality.

Your Company's Cloud & Solutions Business Group is in the process of building in-house resources and skills that would allow it to offer a complete bouquet of Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS) solutions, along with the essential Managed Services Portfolio (MSP) to its Channel Partners and their customers.

This independent Business Group will conceptualize, implement and deliver an integrated, vendor agnostic and customer friendly Cloud Solutions strategy for the Indian market.

Software & Security

Given the fact that India remains an underpenetrated market for Software products in view of large scale use of pirated Software, your Company foresees an immense opportunity for growth in this area.

Microsoft remains the single largest vendor of Software Products and your Company's close engagement with it will enable it to participate and take advantage of their growth.

Growth in infrastructure spending would also result in increased business for Oracle and as its largest distributor, your Company would ensure that it garners its legitimate share of the pie.

Government's emphasis on manufacturing is likely to result in accelerated demand for Autodesk's flagship software products for industrial designing and with its vertical based market approach Autodesk is well positioned to take full advantage of possible opportunities.

Your Company's Software bouquet is rounded off with smaller vendors offering niche products and solutions and your Company's approach is to provide an effective Go-To-Market (GTM) route for these vendors to establish themselves and increase customer awareness of their products and solutions. While currently these vendors offer limited revenue opportunities, in the medium term they would help us achieve our profitability objectives while retaining the promise of higher revenue in future, once their business levels mature.

Security vendors like Symantec, Sonicwall, McAfee, Palo Alto, CA, Citrix, Cyberoam, Fortinet etc., have benefited from growing data security / integrity concerns, resulting in enhanced opportunity for implementation of solutions assuring authorized data access, data sanctity and prevention of Data theft. Your company has experienced an increase in revenue from its Security products portfolio and this would remain a growth area in the foreseeable future.

Going forward, your Company plans to reinvest in Training and establishing Concept Centers to offer a solution driven approach for our Channel Partners.

Consumer and Digital Lifestyle Products

Your Company has carved out a strong presence in the space of Consumer and Digital Lifestyle Products with a vertical revenue growth of 35% over the previous Fiscal Year.

The expansion of 3G networks during the fiscal boosted Smartphone sales in India. The advent of new versions of iPhones viz 6 and 6 Plus, were instrumental for the strong double digit growth last fiscal. As per IDC, Smartphones shipments in India grew to over 81.6 million units in CY14 and is expected to reach 111.4 million units and 148.6 million units in CY15 and CY16 respectively. Given that Smartphone segment is yet to fully penetrate the rural segment, the roll-out of 4G networks by various operators and specifically the aggressive pan-India penetration plans of Reliance Jio wireless broad-band, there remains tremendous head-room for growth in the Smart Phone space. Your Company is in talks with various brands to enlarge its bouquet of products to take full advantage of this opportunity.

While the Windows based PC demand remained depressed, your Company's revenue from Apple's iMac business almost doubled. With expected launch of new versions of MacBook in Indian Market, we expect the demand to remain very strong in future as well. Given the aggressive growth plans plan that Apple has chalked out, your Company foresees promising revenue opportunities and is well positioned to participate in this growth area.

Revenue growth from BlackBerry business was subdued during the year. With the vendor reorienting its strategy towards solution selling as opposed to device sales, your Company believes that this business would transform into a valuable niche business, offering very good earnings potential.

Automated Distribution Centres (ADC)

The capacity and capability of the Automated Distribution Centre (ADC) in Chennai is now fully utilized and after assessing future business needs , construction of the second phase at Chennai ADC has commenced and the enhanced capacity is expected to come on stream during first half of Financial Year 2016-17.

The ADC facility in Kolkata also has reached its optimum capacity utilization on the back of securing large accounts from Pharma and E-Commerce verticals.

As regards the ADC facility at Delhi-NCR, the Company has received the first tier approval for construction from the concerned authorities. Approval for extended space and coverage is awaited.

Subsidiaries

Cadensworth (India) Limited - (Cadensworth)

Your directors are happy to announce that Cadensworth (India) Limited, a Wholly Owned Subsidiary of your Company, has grown its revenue by 30% YOY. Cadensworth's focus as a Solution-Based distributor in technologies like Voice/Video, Data Networking, Security, Wireless LAN and 3D-Printing has enabled to position itself strongly with vendors and partners. Cadensworth's ability to support some of its partners in installation and implementation at their customer locations allowed it significant earning opportunity.

Nook Micro Distribution Limited - (Nook Micro)

Nook Micro Distribution Limited (Nook Micro), a Wholly Owned Subsidiary of your Company, which is primarily focused on micro distribution, has grown by around 9% during FY 14-15. Nook Micro focuses on IT and Telecom verticals with the clear intent to adopt a direct to retail model. Given its reach and coverage in the smaller towns and cities in south of India and the differentiated business model using a Direct-to-Retail (DTR) strategy, it is expected that Nook would capture additional businesses going forward. During the last fiscal, it was able to strengthen its relationship with Lenovo brand by adding more territories and products to its bouquet and has also added HP Stream Notebook distribution in Karnataka. Nook Micro has also been appointed by Apple for distribution of iPhone in the states of Andhra Pradesh and Karnataka.

ProConnect Supply Chain Solutions Limited - (ProConnect)

ProConnect Supply Chain Solutions Limited (ProConnect) is a Wholly Owned Subsidiary of your Company engaged in providing Supply Chain Solutions and it has shown revenue growth of 19% during the Financial Year under review.

ProConnect delivers end to end logistics services to customers across different industry verticals. The scope of its services includes Imports, customs clearance, mother warehouse and satellite depot management, primary and secondary logistics to last mile delivery and returns. During last fiscal, ProConnect on-boarded and operationalized twenty four new 3PL customers.

We are pleased to share that ProConnect was awarded as "Best 3PL Company of the year-Hi-Tech" at the 8th Logistics and Supply Chain Leadership Awards.

The explosion of e-commerce business in India presents a huge business opportunity to all SCM solutions providers and ProConnect recognizes the significance of this vertical. ProConnect's network of around 80 strategic warehousing locations, linked by logistics management services based on a unified technology platform, offers a differentiated value to the operators in the E-Commerce market resulting in successful contracts from some of the large e-commerce companies.

Ensure Support Services (India) Limited - (Ensure)

Ensure Support Services (India) Limited (Ensure), which existed earlier as a separate division of your Company, commenced its operations as of 1st April 2014 as a wholly owned subsidiary, delivering revenue growth of 17% during the year under review.

Its unique delivery mechanism in the Infrastructure Management Services has enabled Ensure acquire several prestigious customers during last fiscal. The Enterprise Professional Services business has also experienced a good growth and has gained the recognition of important vendors including HP, Cisco and Oracle, among others.

During the year under review, Ensure's Warranty Support services business has been enhanced by the addition of brands like Lenovo, Samsung, XiaoMi & Flipkart. Ensure sees a big opportunity going forward in providing support services to e-commerce customers.

Associate

Currents Technology Retail (India) Limited ("Currents"), a Wholly Owned Subsidiary of Redington (India) Investments Limited, an Associate Company, has grown the revenue by 80% in the last financial year offering the complete suite of Apple products (iMac, iPhone, iPad etc.,) to customers creating a superior Apple experience.

Overseas Operations

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

During the last FY 14-15, RDPL as a consolidated entity, posted a strong double digit growth in both Revenue and Earnings. Your Company expects continued growth in these regions in the coming years.

Redington Gulf FZE (A wholly owned subsidiary of RIML) addressing in the META region faced unprecedented challenges resulting from severe Geo-political and currency volatility across several markets in Africa during FY 14-15.

The steep decline in crude oil prices (over 55% during FY 14-15) had a serious impact on oil-dependent economies in Middle East and Africa. This resulted in a slowdown in corporate and government spending in many ME markets.

In spite of above mentioned adverse market situations, Redington Gulf FZE, retained the No 1 position in the Middle East by topping the Channel Middle East Power List for the 11th year in succession. It has also won accolades from many vendors during the year, notably HP, VMWare and Barracuda as also for being the Best Service Provider in EMEA for Dell, to cite a few examples.

Your Company's operations in Turkey are carried out through Arena, which your Company acquired in 2010. Turkey has had its own share of challenges both on the political and economic fronts. The conservative outlook of the Government had a negative impact on the Turkish Lira, resulting in a significant depreciation in its value. The sharp depreciation of the currency resulted in a sharp increase in the landed price of IT products, thereby impacting demand and profitability, apart from resulting in an increase in the effective corporate income tax rate for Arena. The PC market during the year also experienced a decline in the region.

However, you will be pleased to note that your company's overseas operations showed tremendous resilience in surmounting all challenges, recording a 16.2% increase in revenue and a 19.5% increase in profits during the financial year under review.

Directors and Key Managerial Personnel

Mr. R. Srinivasan stepped down from the position of Managing Director on October 17, 2014 while continuing to be on the Board as the Vice Chairman of the Company. Mr. Raj Shankar assumed the responsibility of Managing Director of the Company with immediate effect.

The tenure of appointment of Mr. Raghunandan as Whole-Time Director came to an end on 28th February 2015. The Board of Directors at their meeting held on 2nd February, 2015, have approved the re-appointment of Mr. Raghunandan as a Whole-Time Director for a further period of one year with effect from 1st March 2015, subject to the approval of shareholders in the ensuing Annual General Meeting.

Ms. Suchitra Rajagopalan was appointed on the Board as an Additional Director (Woman Director) during September 2014. Your Company has received notice from a member, proposing her appointment as Director of the Company, along with requisite deposit. Resolution for appointment of Ms. Suchitra as Director of the Company is included in the notice of ensuing Annual General Meeting.

Mr. R. Jayachandran, Mr. N. Srinivasan and Mr. R. Srinivasan, Directors of the Company are scheduled to retire by rotation, and being eligible, have offered themselves for re-appointment.

Brief resumes of the Directors who are getting reappointed are furnished in the Notice of Annual General Meeting.

Mr. S. V. Krishnan, Chief Financial Officer of the Company, was appointed as Key Managerial Personnel as per the requirement of Companies Act, 2013 with effect from 30th May 2014. Other Key Managerial Personnel of the Company are Mr. Raj Shankar, Managing Director, Mr. M. Raghunandan, Whole Time Director and Mr. M. Muthukumarasamy, Company Secretary.

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 31,2015, the applicable accounting standards read with 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 31,2015 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

CRISIL has upgraded its rating on the long-term bank facilities of your Company from A (read as A positive) to AA- stable (read as CRISIL double A minus, stable). The rating on the short-term debt and bank loan facilities had been reaffirmed at 'CRISIL A1 ' (read as CRISIL A one plus), which is the highest rating for this category. This is beneficial for the company's borrowing.

ICRA reaffirmed its ratings for the long-term fund based facilities as 'ICRA AA-' (read as ICRA Double A minus). It has also reaffirmed its rating on the short-term debt program/commercial paper, fund and non-fund based facilities at 'ICRA A1 ' (read as ICRA A one plus), their highest rating in this category.

Auditors

The Company's Statutory Auditors, M/s. Deloitte Haskins & Sells ("DHS"), Chartered Accountants issued their report on the Standalone and Consolidated Financial Statements of the Company and same is appended here to the Report. The Auditors' Reports on the Standalone and Consolidated Financial Statements does not contain any qualification, reservation or adverse remark.

DHS, Statutory Auditors (Firm Registration No. 008072S) of the Company retire at the ensuing AGM. The Board had approved their appointment as Statutory Auditors till the next AGM of the Company, subject to the approval of the Shareholders.

The Company has received a certificate from M/s. Deloitte Haskins & Sells to the effect that their appointment, if made, would be in accordance with the provisions of the Companies Act, 2013, and they are not disqualified in terms of provisions of the Companies Act, 2013, from being appointed as Statutory Auditors of the Company.

Corporate Governance and Management Discussion & Analysis Report

Pursuant to Clause 49 of the Listing Agreement, a report on the Corporate Governance and Management Discussion and Analysis is attached to this Annual Report.

Disclosures

Board and its committees

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

Independent Director Declaration

All the Independent Directors have given declaration in terms of Section 149(6) of the Companies Act, 2013.

Internal Financial Controls

The Company is in compliance with the requirements of Companies Act, 2013 with regard to the Internal Financial Controls which embraces adherence to Company's policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of financial information. Internal Controls are designed to cover financial matters, operational areas besides fraud prevention mechanism. The internal audit function has devised an appropriate audit mechanism and periodically deployed comprehensive test checks to enable Internal Audit to give reasonable assurance to the Audit Committee that the Internal Financial controls are adequate and operating effectively.

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

Risk Management

The Board of Directors constituted a Risk Management Committee for implementing and monitoring the Risk management practices in the Company. This Committee meets periodically and reviews the potential Risks associated with the Company and discusses steps taken by the management to mitigate the same.

The Board of Directors reviewed the risk assessment and procedures involved in 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 15 of SEBI (Share Based Employee benefits) Regulations, 2014 is given in Annexure A-1 to this Report. The certificate from the statutory auditors of the Company stating that Employee Stock Option Plan 2008 has been implemented in accordance with SEBI (Employees share benefits) Regulations, 2014 and in accordance with the resolution of the company in the general meeting, is also appended thereto.

Your Company had instituted Employee benefit schemes to the employees of the Company and its subsidiaries and to the Directors of the Company through Employee Share Purchase Scheme (ESPS) 2006 and Employee Stock Option Plan 2008 respectively. The details of the schemes pursuant to Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 is given as Annexure A-2 to this Report.

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. Some of the technology adoption and absorption like cloud technology, virtualization and mobile based technologies resulted in better operational efficiencies and Turnaround Time (TAT).

ii. Import of Technology:

The Company has not imported any technology during the year.

iii. Expenditure on Research and Development:

Since your Company is not involved in manufacturing activities, it did not incur any expenditure on research and development. Foreign Exchange earnings and outgo

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows is given in notes 30 and 31 of the standalone financial statements.

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 B to this report.

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 criteria for Independent Director laid down by Nomination and Remuneration Committee are enclosed as Annexure C 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 D 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 along with the purpose for which the loan is proposed to be utilized by the recipient are provided in the Standalone Financial Statements. Please refer to Note 17 to the standalone financial statement.

Corporate Social Responsibility

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

Secretarial Audit Report

Pursuant to the Section 204 of Companies Act, 2013, the Company has arranged for carrying out Secretarial Audit by a Practising Company Secretary Mrs. R. Bhuvana and the scope of such audit is governed by the guidelines issued by the Institute of Company Secretaries of India. The report furnished by the Auditor in the format prescribed under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure F 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 G to this report.

Extract of Annual Return

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

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 2014-15

* The Company had not entered into any material contract / arrangements with related parties during the Financial Year 2014- 15 which were not in the normal course of business as well as not on an arm's length basis

* There are no material changes and commitments affecting the financial position of the company which have occurred between 31st March 2015 and the date of this report.

Weblinks

Policy on Related Party Transaction http://redingtonindia.com/images/PolicvondealingwithRelatedPartv Transactions.pdf

Policy for determining Material Subsidiaries http://redingtonindia.com/images/PolicyonMaterialSubsidiaries.pdf Details of Familiarisation Programmes http://redingtonindia.com/images/Familiarizationprogrammes.pdf

Criteria of Making payment to http://redingtonindia.com/images/Policvonpavmentto Directors.pdf Non Executive Directors

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 FDI 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 Sexual Harassment to ensure a free and fair enquiry process on complaints received from the employees against Sexual Harassment. No complaints were reported pertaining to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, during the year under review.

Acknowledgment

Your Directors take this opportunity to thank the shareholders including the principal shareholders, customers, suppliers, bankers, business partners/associates, for their consistent support and encouragement to the Company. I am sure you will join my other Board Members in conveying our sincere appreciation to all employees of the Company and its subsidiaries and Associate 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.

On behalf of the Board of Directors

Place : Chennai J Ramachandran Date : May 27, 2015 Chairman


Mar 31, 2014

To the Members,

The Directors take pleasure in presenting the twenty-frst Directors'' Report of your Company and the Audited Accounts for the financial year ended March 31, 2014.

Financial Highlights

(Figures in Rs. /Crores)

Particulars Consolidated Standalone

2013-14 2012-13 2013-14 2012-13

Revenue from operations 27935.09 24164.66 11,256.62 10,409.67

Add: Other Income 64.13 45.72 48.03 44.88

Total Revenue 27999.22 24210.38 11,304.65 10,454.55 Less: Total Expenses

a) Cost of goods sold 26309.18 22738.05 10,614.69 9821.41

b) Employee benefits 410.56 348.16 101.30 102.09

c) Other Expenses 559.87 439.97 251.43 188.25

profit before Interest, Depreciation and Tax 719.61 684.20 337.23 342.80

Less: Finance costs 186.93 183.92 76.95 83.86

Less: Depreciation & Amortisation 38.50 37.87 10.60 10.00

profit Before Exceptional Item and Tax 494.18 462.41 249.68 248.94

Add: Exceptional Item - (Loss)/profit on Sale of Long-term Investment (9.07) - 65.76 -

profit before Tax 485.11 462.41 315.44 248.94

Less: Provision for Taxation 127.18 115.07 75.65 77.57

profit after Tax 357.93 347.34 239.79 171.37

Less: Share of loss of Associate - 0.03 NA NA

Less: Minority interest 21.28 24.20 NA NA

profit for the year 336.65 323.11 239.79 171.37

Your Directors have made the following appropriations:

(Rs. in Crore)

Balance of profit brought forward from last year 567.44

Less: Dividend for the year 2012-13 including Dividend Distribution tax for additional equity shares 0.01 allotted under the ESOP scheme after the closure of the financial year

Add: profit for the year 2013-14 239.79

profit available for appropriation 807.22

Less: Proposed Dividend @ Rs. 0.90 per Equity Share of Rs. 2/- each (i.e. 45% of the Face Value) for the 35.95 year ended March 31, 2014

Dividend Distribution Tax thereon 6.11

Transfer to General Reserve 23.98

Dividend distribution tax credit on account of dividend received from subsidiary companies (2.71)

Balance of profit to be carried forward 743.89

Dividend

Considering your company''s financial performance, the directors have recommended a dividend of Rs. 0.90 per share (i.e. 45% of the Face Value) for the year under review as compared to Rs. 0.40/- per share (i.e. 20% of the Face Value) in the previous year.

Financial Performance

The consolidated revenue of your Company was Rs. 27,999.2 Crores as against Rs. 24,210.4 Crores in the previous year with a CAGR of 21% for five years. The consolidated net profit for the year under review was Rs. 336.7 Crores as against Rs. 323.1 Crores in the Previous year with the CAGR of 16% for the last five years.

The stand-alone revenue of your Company was Rs. 11,304.7 Crores as against Rs. 10,454.6 Crores in the previous year with a CAGR of 16% for five years and the profit after tax was Rs. 239.8 Crores as against Rs. 171.4 Crores in the previous year with CAGR of 25% for the last five years.

The Earnings Per Share (EPS) on consolidated basis (based on weighted average number of shares during the year) increased to Rs. 8.4 in the year under review as compared to Rs. 8.1 in the previous year. EPS on standalone basis has increased to Rs. 6.01 in the year under review from Rs. 4.29 in the previous year.

Distribution business

Information Technology Products

Personal Computing

It is axiomatic that all computing begins at the "Client" level where individuals use a desktop PC or a notebook to carry out their word-processing, spread-sheet calculations or data analysis work. This is fundamental to "IT", enabling processes and operations.

While usage of Tablets and Smartphones as consumer devices has rapidly exploded, the PC is expected to remain the primary device for computing and content creation, which would drive the demand for this form factor.

The total desktop sales shrunk during FY 13-14 as a result of sharp de-growth in the demand of assembled (unbranded) units and consumer preference for the mobile form factor arising out of the affordability of notebooks.

The sales of consumer and commercial notebooks de-grew, if one were to exclude Free Laptop Projects initiated by State Governments. Hence, the overall PC market, without the special Education Projects witnessed a sharp de-growth.

Your Company maintained its share of business in the portfolio of PC brands it engaged with during FY 13-14, viz. HP, Lenovo, Toshiba, HCL and Wipro.

Most PC manufacturers are attempting to garner a share of the tablet market dominated by Mobile Phone brands. However, the lack of proper product positioning and an inability to match the Mobile brands in promotional dollars meant that their efforts are yet to yield tangible results.

Enterprise & Infrastructure

Your Company''s investment and engagement in the Value Added Distribution segment over the years has enabled it to develop a strong foothold with all the vendors catering to Enterprise & Infrastructure projects. While investment decisions on centrally funded projects had slowed down in the last 4-6 quarters, there have been pockets of opportunities available in private enterprise, State Government Projects and selected Centrally Funded Projects. Your Company has been able to take full advantage of these opportunities to grow its Value Added Business substantially year on year.

Your Company retained its dominant position with vendors like Oracle, IBM, CISCO, DLink, NetApp and Hitachi and is well positioned to capitalize on increasing opportunities in the future.

Voice-Video-Data, Security & Virtualization

Voice-Video-Data transmission, Security and Virtualization are key growth segments across user groups encompassing consumers, commercial houses, Enterprise customers and Government / PSU.

Your Company represents some of the leading vendors like McAfee, CISCO, Cyberoam, Molex, Fortinet, Palo Alto Networks, Symantec, IBM, Polycom, VMware, Microsoft and NComputing in these sectors.

These growing verticals will remain focus areas for your Company and we expect to grow revenues significantly in future.

Cloud

While globally the Cloud business has already gained a high degree of acceptance, penetration levels still remain relatively small in India.

While customers in India have shown a marked resistance towards moving onto the Cloud due to Data Security & Privacy concerns, FY 13-14 did see some inroads being made by Cloud solution vendors into the SMB space where the value proposition appears to be more apparent.

Your Company recognizes and appreciates that "IT on Cloud" has the potential to become a significant game-changer and a possible threat to traditional distribution business in selected areas.

Keeping this in mind, your Company is in the process of developing its Cloud portfolio and is in discussion with its major vendors.

Your Company has already initiated Cloud related business with vendors like Microsoft, Adobe, CA and Citrix for their Software- as-a-Service (SaaS) offerings, and with Hitachi and CtrlS for their Infrastructure-as-a-Service (IaaS) offerings.

As the demand pattern in India matures, your Company will evaluate appropriate Cloud business strategies and invest in this space accordingly.

Printing & Supplies

Demand for printing has been stagnant, and while printing ''categories'' have expanded due to significant growth in "consumer" printing in the Education and the Social Media verticals, Commercial & Enterprise printing which still forms the bulk of the demand,

has been contracting, thus impacting the growth of printers. Among various printer models, Multi-Function Printing Devices (combined print-scan-copy-fax features) are growing at the cost of Single-Function Devices (pure printing devices). Hewlett Packard maintains its lead in the printing segment and while this space is over-distributed, your Company has maintained its share in HP''s business pie.

Supplies are impacted by the proliferation of "Refilled" and "Compatible" products, which form the bulk of the demand from both consumers and commercial users. Brands have countered this by significantly lowering "printing-cost-per-page" by slashing prices and reducing cartridge sizes. This has resulted in stagnant supplies revenue, even though supplies demand has increased due to increase in Printer population base.

Software

Starting as a distributor of pure Volume Licensing products, your Company has undergone a transformation over the last 3-4 years to emerge as the premier partner for its Software vendors in the Value Added Distribution portfolio also.

Strong engagement with key vendors like IBM, Microsoft, Oracle and Autodesk has helped your Company significantly grow Software revenue during FY 13-14.

Consumer and Lifestyle Products

The distribution of Consumer and Lifestyle products by your Company continued to show a strong performance in FY13-14 with a 22% revenue growth over the previous fiscal year.

The Smartphone market grew to over 40 million units in CY13 according to IDC and is set to exceed 100 million units in CY15. According to IDC, Apple garnered approximately 7% of market share by value in CY13 in India. Your Company''s relationship with Apple has been strengthened in the Smartphone market. Though the decline of BlackBerry continued globally, the correction of prices of BB10 models improved sales towards the end of FY13-14.

The tablet market for FY13-14 was affected due to the impact (mainly on lower price segment players and white-box brands) of new regulations from the Bureau of Information Standards (BIS). The Apple iPad business continued to show strong growth in FY13-14. The Apple PC revenue grew strongly compared to previous fiscal year due to a change in the distribution structure and an increase in demand. The Huawei business revenue more than doubled during the year with good traction in the data card business.

Your Company continues to be a key player in the fast growing Digital Printing space and has seen a strong growth with increased installed base resulting in continued growth from consumable sales.

Hardware Support Services

Customer satisfaction has been the key objective of your Company''s Hardware Support Services. This has enabled us to retain existing customers and win new customers through referrals. To facilitate consistent quality service delivery across the country and across diverse product categories, your Company invested and strengthened the Service Network, Parts Logistics, and Online Systems and Processes. Apart from winning the Best Service Provider awards from reputed brands like Hewlett Packard and Toshiba for feld support, your Company earned similar recognition for Parts Logistics Support from HP Indigo, Fujitsu, and Toshiba.

To sustain the current performance levels and ensure continuous improvement, your Company has been investing on automation tools and training employees on new methodologies of Parts Management, Manpower Management and Operations Management that enable resource optimization and cost optimization. Unifed Part Code, dynamic resource allocation in line with business volumes through MAT (Manpower Allocation Table), GRC (Green Recovery Centre) for defective parts recovery and SMART, the Sales Force automation tool have been adopted and successfully used. Your Company''s Support Services are ISO 9001:2008 and ISO 20000 certified.

Your Company''s Infrastructure Management Services (IMS) continues to add new customers across the country. Polaris Financial Services, Southern Naval Command, Britannia Industries, Hinduja Global Solutions, Asian Heart Institute and Research Center, CRISIL, ITC Ltd. (Food Division), Alstom India Ltd., Yazaki India Ltd. and many other such prestigious customers from diverse business verticals bestowed their faith in your Company''s IMS Services.

Your Company will continue to ensure service excellence, and to enable its customers through improved IT availability.

Automated Distribution Centres (ADC)

The ADC in Chennai, which is operating to near full capacity now, is leased out to and operated through ProConnect Supply Chain Solutions Limited, a wholly owned subsidiary of your Company. Operations out of this ADC in Chennai have been running successfully over the last four years, which has indeed demonstrated your Company''s capabilities in bringing effciency through automation and process orientation in a cost-efficient manner and in compliance with best practices in the Supply Chain business.

The ADC in Kolkata, which has been operational since February 2014, is now operated through ProConnect Supply Chain Solutions Limited. Migration of a few internal and external customers has already been enabled, and with the addition of a major FMCG Client, your Company expects to operate the warehouse to full capacity during the next fiscal.

As planned, your Company is in the process of setting up a similar state-of-the-art facility in the North, for Delhi & NCR in Ghaziabad. Having bought the required land, your Company is now in the process of obtaining necessary approvals for commencing construction. Basic facilities at the site have been set up and a compound wall has been built to secure the land.

Subsidiary Companies

Your Company has 49 subsidiaries, including 45 overseas subsidiaries and step down subsidiaries, which operate in India, South Asia, Middle East, Turkey, Africa and CIS countries. The financial year 2014 has been a favorable year for your Company''s subsidiaries both in India and abroad.

Indian Subsidiaries

Cadensworth (India) Limited (Cadensworth)

In a year filled with economic uncertainty and slowing demand, Cadensworth has managed to double its revenue as well as increase its absolute value of gross margin by over 50% year on year.

Most of the brands adopted for distribution during last year have made significant contributions to both revenue and profitability growth. Revenue from distribution of products in the area of Storage, Wireless LAN, Security and 3D Printing Solutions contributed significantly to the growth. Cadensworth will continue to identify and add key brands in disruptive technology areas of the IT infrastructure world for distribution.

Cadensworth strongly believes in channel enablement as a key differentiator in Solution Based Distribution. Cadensworth has made significant investments in the areas of Consulting, Training, Services (CTS) and lead generation to support its channel partners. Cadensworth will continue to make investments in these areas to strengthen its capabilities to enable its channels.

The Repairs, RMA, Reverse Logistics Services (RRRS) business division showed a promising growth during the year. Toshiba Digital Media Network Taiwan Corporation signed up with Cadensworth for RMA support services of their Hard Disk Drive in India during the year. Flash Global Logistics added few more brands for the services rendered by Cadensworth.

Cadensworth was recognized and honored in the distribution business by two vendors-EMC and DLink-during the year.

Nook Micro Distribution Limited (Nook Micro)

Nook Micro continues to focus on micro distribution in Southern India. Nook Micro has grown at around 3% in the current year, despite the overall economic slowdown and negative growth in the IT and consumer durables industry.

In the consumer durable segment, Nook Micro added the Panasonic brand to our distribution in the state of Andhra Pradesh. Nook Micro has also added more products and territories in LG brand. In recognition of its performance in Coimbatore, Nook Micro has been recognised as No. 1 distributor in Coimbatore by Voltas.

The IT business had a revenue growth of 22% over previous year. Nook Micro continued its focus on PC distribution and increased its share in the business. It has strengthened its relationship with the Lenovo brand by adding more territories.

The primary objective this year was to increase the gross margins and optimize the cost. Nook Micro has increased the Gross Margin by around 0.55% and the cost reduction has given it a benefit of 0.45% of Revenue, due to which its financial performance has improved.

During the year, Nook Micro strategically entered into telecom distribution by signing up with ''Panasonic'' in the state of Andhra Pradesh. Telecom is going to be the main focus area of growth in the coming financial year and will be a significant contributor in the coming years.

ProConnect Supply Chain Solutions Limited (ProConnect)

The supply chain operations of your Company is managed by our wholly owned subsidiary called ProConnect Supply Chain Solutions Limited. ProConnect offers an entire gamut of Third Party Logistics (3PL) services starting from Import, Warehousing, Picking and Packing to Order Processing and Stock Movement across local geographies with last-mile deliveries. Their services include Reverse Logistics, In-plant Logistics Management, Project Management and Supply Chain Consulting.

ProConnect commenced commercial operations as a separate company in October 2012. Within a short span of time, ProConnect creditably brought on board new businesses and extended its services to a wide range of industry verticals. Dealing with multiple clients with demanding needs across various locations in India, it has today grown to become one of the most dependable 3PL service providers in the industry. Needless to say, the diversifed experience earned across different industries and a skilled work- force have helped ProConnect to handle the complex needs of Clients.

In the financial year under discussion, ProConnect extended their services across various verticals like FMCG, Telecom, Pharmaceuticals, Engineering, Logistics/4PL and Electricals & Electronics. It has secured a prestigious contract from Reckitt Benckiser, a leader in the FMCG and Pharma sectors, to handle their operations in Kolkata. It has also added clients like Schwing Stetter, Byond Mobiles, Oppo Mobiles, KMI, Endovascular Corporation and Consul Consolidated during this fiscal. A noteworthy mention is also ProConnect''s business expansion from existing clients like FastTrack Communications, BSH Home Appliances, Kansai Nerolac, Socomec, Transition and Netplace.

Service levels are achieved with the effective deployment of ProConnect''s warehouse management software (WMS), which seamlessly integrates with clients'' ERP to meet today''s fast-paced business requirements. ProConnect strives to meet clients'' requirements through continuous development of the software. Furthermore, the WMS is periodically upgraded with new modules to handle various functionalities like billing as part of automation.

ProConnect has implemented value added services in Warehousing & Transportation services during this financial year such as the pilot run with the Vehicle Tracking System for real time information on high value shipments. It has maintained their record of on-time delivery, 99.99% inventory accuracy, zero incidents and damage-free deliveries during this financial year as well.

ProConnect has been continuously improving their marketing strategies and media coverage with major event sponsorships and participation in exhibitions and expos in the metros as delegate and exhibitor. It is also active in various social networking sites and takes part in other brand promotional activities.

ProConnect has received appreciation from Insight Business Machines Pvt. Ltd. (a partner of your Company) for the execution of Sahara India''s Drop Shipment project across India. Apart from the Supply Chain Excellence Award for "Forward and Reverse logistics" for this year from one of their big clients, it has also received several appreciation letters from existing clients such as BenQ, BSH, Vodafone, Dalmia and Dorma, to name some, for their outstanding service.

Ensure Support Services (India) Limited (Ensure)

Your Company incorporated Ensure Support Services (India) Limited during the year for carrying out after sales support service business for various IT Hardware and Technology products as a neutral third party service provider. Ensure will provide an entire gamut of services ranging from Call Centre Services, Field Engineering Support, Parts Warehousing, Forward and Reverse Logistics, Imports and Re-exports and Asset Recovery.

Ensure commenced its operations effective from 1st April 2014.

Overseas Subsidiaries

The fiscal year 2013-14 continued to be a challenging one for many countries in the METACIS (Middle East, Turkey, Africa and Commonwealth of Independent States) region-owing to a combination of weak economic environments, depreciating currencies (eg. Turkey and Kazakhstan), terror attacks (eg. Kenya and Nigeria) and continuing political uncertainties (eg. Egypt).

Inspite of these challenges, your Company''s overseas operations demonstrated growth in both revenues and earnings by 20.2% and 9.5% respectively.

While the Smartphones and Tablets product category continues to grow, the traditional PC product category has experienced a decline in FY 2014. However your Company has been able to grow across all the product categories and across most markets.

- For most of the PC brands (HP, Lenovo, Dell, etc.) your Company has leading market shares.

- For Samsung in West Africa, Redington has grown its business considerably year on year.

- In KSA (Kingdom of Saudi Arabia), your Company has elevated itself to be the No. 1 distributor ahead of many other local and regional players. Your Company was successfully able to mirror this trend by demonstrating significant growth in both these product categories.

- Continued to be the Numero Uno distributor in the PCs category in Middle East (ME) region.

Redington Gulf FZE (RGF) continues to maintain its leadership position and was ranked the No. 1 Distributor in the ME region by Channel Middle East for the 8th consecutive year.

RGF''s continued leadership in the Volume Distribution business is demonstrated by the many awards and recognitions it has earned, notably:

- "IT Distributor of the Year" award by Channel Middle East

- "Champion Distributor of the Year" award by VAR Magazine, MEA

- "Middle East Retail Academy "award by Distree ME Retail Academy Awards

The value-added distribution portfolio continued to demonstrate strong growth and further expanded the product offering by adding over 8 brands, including certain premier brands in the Value Space (Oracle, VMware). As a recognition for its growing prominence in this space, RGF was also awarded the following commendations in the value business:

- "Value added Distributor of the year" award by VAR Magazine, MEA

- "Distributor of the year" award by Avaya

- "Distributor of the year" award by Dell

The Support Services business was also awarded the "Best After-Sales Service" award by VAR Magazine, MEA.

Employee Stock Option Plan 2008

The summary information on the stock options program of the Company is provided in Annexure A of this report. The information is being provided in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme) and (Employee Stock Purchase Scheme) Guidelines, 1999, as amended. No employee was issued Stock Option during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

Additional Information relating to Conservation of Energy, Technology Absorption and Expenditure in R & D

The operations of your Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy.

Your Company continues to use the latest technologies for improving the quality of the services it offers.

Since your Company is not involved in manufacturing activities, it did not incur any expenditure on Research and Development.

Directors

Mr. Lin Tai-Yang and Mr. Nainesh Jaisingh, Directors of the Company are liable to retire by rotation, and being eligible, have offered themselves for re-appointment. Pursuant to the provisions of Companies Act, 2013 Prof. J. Ramachandran, Mr. V. S. Hariharan and Mr. Keith WF Bradley, Independent Directors are proposed to be appointed for a period of 5 consecutive years till 31st July 2019.

Brief resumes of the Directors who are getting reappointed are furnished in the Corporate Governance Report.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibilities Statement, the Directors confirm that:

(i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed;

(ii) Appropriate accounting policies have been selected and applied consistently, and judgements and estimates which are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

(iii) Proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) The Annual Accounts have been prepared on a going-concern basis.

Credit Rating

CRISIL has upgraded its rating outlook on the long-term bank facilities of your Company from ''stable'' to ''positive'', while reaffirming the rating at ''CRISIL A '' (read as CRISIL A plus) . The rating on the short-term debt and bank loan facilities had been reaffirmed at ''CRISIL A1 ''(read as CRISIL A one plus), which is the highest rating for this category.

ICRA reaffirmed its ratings for the long-term fund based facilities as ''ICRA AA-'' (read as ICRA Double A minus). It has also reaffirmed its rating on the short-term debt program/commercial paper, fund and non-fund based facilities at ''ICRA A1 '' (read as ICRA A one plus).

Particulars of Employees

For the financial year under review, none of the employees fall under the revised ceiling limits prescribed under section 217 (2A) of the Companies Act, 1956.

Auditors

The Company''s Statutory Auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 008072S) who retire at the ensuing AGM, have expressed that they would like to offer themselves for re-appointment as Auditors of the Company.

Further, the Company has received a certifcate dated 30th May 2014 from M/s. Deloitte Haskins & Sells to the effect that their appointment, if made, would be in accordance with the provisions of the Companies Act, 2013, and they are not disqualifed in terms of provisions of the Companies Act, 2013, from being appointed as Statutory Auditors of the Company.

Auditors'' Report

During the year the Company had received an Income Tax demand of Rs. 129 Crore mainly on account of imputed capital gains arising from Transfer of Company''s investment in an overseas subsidiary to another overseas step-down subsidiary without consideration. The matter is under appeal before the Income Tax Appellate Tribunal. The Statutory Auditors have drawn attention to this in their report.

Foreign Exchange

Your Company''s earnings / outgo in foreign currencies are outlined in the Notes to the Annual Accounts.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, a report on Corporate Governance and Management Discussions & Analysis is attached to this Annual Report.

Auditors'' Certificate on compliance with FDI norms

Pursuant to Reserve Bank of India Circular Ref. RBI / 2013-2014 / 117 A.P. (DIR Series) Circular No. 1 dated July 4, 2013, the Company has obtained a certifcate from the statutory auditors certifying that the Company is in compliance with the regulations as regards downstream investment and other related FEMA prescriptions.

Acknowledgment

Your Directors take this opportunity to thank the shareholders including the principal shareholders, customers, suppliers, bankers, business partners/associates, for their consistent support and encouragement to the Company. I am sure you will join my other Board Members in conveying our sincere appreciation to all employees of the Company and 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.

On behalf of the Board of Directors

Place : Chennai J. Ramachandran

Date : May 30, 2014 Chairman


Mar 31, 2013

To the Members,

The Directors take pleasure in presenting their Twentieth Annual Report for the year ended March 31, 2013.

Financial Highlights

(Rs. in Crore)

Particulars Consolidated Standalone

2012-13 2011-12 2012-13 2011-12

Net Sales /Income from operations 24,164.66 21192.99 10,409.67 9840.40

Add: Other Income 45.72 29.03 44.88 31.08

Total Revenue 24,210.38 21222.02 10,454.55 9871,48

Less: Total Expenditure

a) Cost of goods sold 22,738.05 19934.75 9821.41 9280.90

b) Employee Benefits 348.16 280.37 102.09 97.53

c) Other Expenditure 441.24 373.50 188.25 171.81

Profit before Interest, Taxes, Depreciation and Amortization 682.93 633.40 342.80 321.24 (EBITDA)

Less: Finance Cost 182.65 152.04 83.86 77.40

Less: Depreciation and Amortisation 37.87 31.03 10.00 10.55

Profit before Tax (PBT) 462.41 450.33 248.94 233.29

Less: Tax Expense 115.07 111.29 77.57 76.48

Profit after Tax (PAT) 347.34 339.04 171.37 156.81

Less: Share of loss of Associate 0.03 0.02 Nil Nil

Less: Minority Interest 24.20 46.28 Nil Nil

Net Profit for the year 323.11 292.74 171.37 156.81

Your Directors have made the following appropriations:

(Rs. in Crore)

Balance of Surplus brought forward from last year 425.16

Less: Dividend for the year 2011-12 including Dividend Distribution Tax on equity 0.01 shares allotted under the ESOP scheme after the closure of that financial year 425.15

Add: Net Profit for the year 2012-13 171.37

Profit available for appropriation 596.52

Less: Proposed Dividend @ Rs. 0.40 per Equity Share of Rs. 2/- each (i.e. 20%) for the 15.97 year ended March 31, 2013

Dividend Distribution Tax 0.26

Transfer to General Reserve 12.85 29.08

Surplus carried forward 567.44

Dividend

Creating long term value to the shareholders by meeting financial commitments without diluting capital or increasing the debt base remains our single most important priority. Considering this objective, the continuing economic slowdown, our present financial commitments, and future cash flows, your Directors are pleased to recommend a dividend of Rs. 0.40 per equity share of face value Rs. 2/- each of the Company for the financial year 2012-13.

Financial Performance

The consolidated revenue of your Company was Rs. 24210.4 Crore as against Rs. 21222.0 Crore in the previous year with a CAGR of 18% for five years. The consolidated net profit for the year under review was Rs. 323.1 Crore as against Rs. 292.7 Crore in the previous year with a CAGR of 19% for the last 5 years.

The Standalone revenue of your Company was Rs. 10,454.6 Crore as against Rs. 9871.5 Crore in the previous year with Year-on-Year growth 5.9% with a CAGR of 15% for the last 5 years and the profit after tax was Rs. 171.4 Crore as against Rs. 156.8 Crore in the previous year with Year-on-Year growth 9.3% with a CAGR of 21 % for the last 5 years.

The Earnings per Share (EPS) on a consolidated basis (based on weighted average number of shares) increased to Rs. 8.1 in the year under review as compared to Rs. 7.4 in the previous year. The EPS on standalone basis (based on weighted average number of shares) increased to Rs. 4.3 in the year under review as compared to Rs. 3.9 in the previous year.

Distribution business Information Technology Products

Your Company''s IT Distribution Business experienced mixed results during Financial Year 12-13. Growth during H1 was flat while a double digit Revenue growth was captured in the 2nd half of the fiscal.

Consumer and stock-and-sell Commercial products'' demand remained muted throughout the year, with individual business growth coming in from change in vendor''s market-share or your Company''s gain in authorized territory or exclusive relationship with a vendor.

Progressive closures of long delayed large Projects in Enterprise and Government space during H2, where we were successful in partnering with National System Integrators, allowed us to grow revenue significantly, especially in the Infrastructure business space.

Capital spending on IT infrastructure by commercial establishments, by way of adopting new technology or going in for asset refresh was selective and conservative. This impacted the entire space of stock-and-sell and small/mid-sized back-to-back business.

Launch of Windows8 during 03 was perceived as a game-changer and was expected to provide a boost in the demand for new client devices (laptops and desktops). However, slow transition to Win8 by most OEMs and non-availability of touch-based devices which showcase the specific advantages of this new operating system meant that consumers and companies were not enthusiastic enough to make a material difference to the demand.

During FY 12-13, fast changing consumer preference for Tablets and Smartphones started encroaching into the Notebook and PC space. Proliferation of low-cost, "acceptable" technology tablets is persuading consumers across geographies to consider tablets as their primary "information consumption", "entertainment" and "social interaction" device. Indian IT vendors have started realizing this inevitability and have now started strategizing on suitable product offerings to address this space.

Your Company''s business in imported products was impacted by continuous fluctuation in the foreign exchange rate, which disturbed the Market Operative Price (MOP) by lowering the confidence level of the channel partners. This made it difficult to predict demand and plan the business in an effective manner.

The Assembled PC or the Do-It-Yourself (DIY) segment continued its trend of deceleration in demand and this resulted in all Component manufacturers experiencing declining Technology Acceptance Model (TAM) throughout the financial year. This has severely impacted your Company''s revenues from sale of CPUs, Mother Boards, Display devices and Internal Hard Disc Drives.

Vendors and products catering to Security, Voice and Data solutions have experienced significant growth during FY 12-13. Your Company has been able to participate effectively in this space with vendors like Polycom, Avaya, Cisco, Systimax, Molex, HP, Fortinet, McAfee, Symantec, Cyberoam and SonicWALL.

Cloud computing is slowly gaining traction in the Indian market. Your Company has formulated its strategy for a foray into this emerging technology space in a very deliberate and considered manner. While all IT vendors profess to have Cloud "play", during FY 12-13, your Company has initiated partnerships with vendors having a clear and firm channel strategy. With the "Cloud portfolio" from Microsoft, IBM, Hitachi, NEC, Trend Micro, Adobe, VMware, CA, CtrlS and Netmagic, your Company is well positioned to commence a suite of offerings to its partners in the areas of Software-as-a-Service (SaaS), Infrastructure-as-a- Service (laaS) and Platform-as-a-Service (PaaS). We are confident that this would allow your Company to have strong presence in the "distribution led space" in Cloud Computing.

Consumer and Lifestyle Products

The distribution of Consumer and Lifestyle products by your Company continued to show another strong performance in FY12- 13 with a 24% revenue growth over the previous fiscal year.

Your Company continues to play a key role in India''s Smartphone revolution. Your Company sealed a relationship with Apple for the distribution of their Smartphones. According to IDC, Apple garnered over 15% value market share in 03 FY12-13 in India. BlackBerry has had a setback at the global level. However, the launch of its new line of devices (with the new Operating System - BlackBerry 10) has returned it to profitability as of 04 FY12-13 and it is hoped that they will do well in India too.

Your Company has entered the eReader segment with its tie-up with Amazon. Your Company has been appointed as national distributor for Amazon''s eReader line - Amazon Kindle. In the tablet segment, despite the significant growth of low cost tablet devices, the iPad business continued to show strong growth at 48% in FY12-13. The successful introduction of the iPad mini line of products contributed to this growth.

Your Company continues to be a key player in the fast growing Digital Printing space and has seen a 58% growth in revenues driven by both hardware and consumable sales.

Hardware Support Services

Your Company is one of the leading Service providers of IT and Telecom products in India. Through 69 owned service centers and additional 270 centres owned by authorized service partners, your Company is providing pre-sales, warranty and post-warranty services to many leading global brands like Hewlett Packard, Toshiba, IBM, Hitachi, EMC, NetApp, Brocade, Cisco, Lenovo, Fujitsu, Acer, Apple, BlackBerry, HTC, Motorola, among others—several of them for a decade or more. For brands as well as corporate customers, your Company is the single point of contact providing the entire spectrum of services - Call Centre services, Field Engineering support, Parts Warehousing, Forward and Reverse Logistics, Imports and Re-exports and Asset Recovery. All service operations are conducted on customized Customer Relationship Management (CRM) and Supply Chain Management (SCM) systems, to ensure process compliance, transparency and control.

To assure service excellence to our customers, and to enable predictability, efficiency and scalability in operations, your Company, during the past year, has developed and deployed world class Service automation tools across various functions, which are briefed below:

SMART is a Sales force automation tool specifically designed to facilitate sales management of Infrastructure Management Services (IMS) through prospect mapping, progressive tracking of every individual sales call, and designing of tailored expert support solutions to fulfill the business needs of each individual customer.

FIAT is an automated capacity planning tool that computes the optimized number of engineers in each skill category at each service location, besides identifying the training needs of individual engineers. This not only enhances the quality of services delivered to our customers, but also provides a career path to our workforce through continuous and relevant skill upgradation.

EXPART is an automated part prediction tool that enables part demand fulfillment rates of 95% and above, thus substantially reducing the turnaround times for remediation.

Given the large and ever-increasing base of assets under maintenance for your Company, it has commissioned an innovative way to facilitate the accurate collection of customer asset data from the field & instant direct upload into its CRM system, using MAGIC, a proprietary menu-driven 3G mobile device.

Your Company has also upgraded its Contact center for IMS to a professional Technical Assistance Center (l-TAC), equipped with multiple toll free lines, redundancy, Interactive Voice Response & Automatic Call Distributor, thus giving all its IMS customers guaranteed instant access for support services. Trained engineers at l-TAC now diagnose and resolve a large number of service requests either over the phone or through remote sessions, thus providing best-in-class customer experience.

Your Company''s Support Services are ISO 9001:2008 and ISO 20000 certified.

Your Company''s Enterprise Professional Service practice consisting of solution design & implementation support across Server, Storage, Data, Voice, Video & Security verticals enables brands to increase reach & sales. During the period under review, Brocade has appointed your Company as PSP (Professional Service Provider) for Storage Area Network (SAN) products, further expanding its Enterprise Storage Services portfolio.

In the Infrastructure Management Services space, many prestigious corporate customers like Commissioner of Commercial Tax - Odisha, Renault Nissan, Venky''s, MP Electricity Board, L&T Heavy Engineering Division, Pipavav Defence & Offshore Engineering, Sahara Group and many others have entrusted your Company with the maintenance of their IT assets.

Your Company shall continue to sustain and improve its Service delivery excellence and deliver a unique value proposition to all stakeholders in the ecosystem—vendors, partners and customers.

Supply Chain Management Services

To capitialise on growth opportunities available in the supply chain solutions space, supply chain activities were transferred to ProConnect Supply Chain Solutions Limited (ProConnect), a Wholly Owned Subsidiary effective 1st October 2012. ProConnect acts as a neutral logistics service provider and focuses on the opportunities in the fast growing Third Party Logistics (3PL) market. Performance of ProConnect has been discussed in detail under Subsidiary Companies.

Automated Distribution Centers

To meet the fast growing requirement of warehousing space, your Company is creating warehouse infrastructure by setting up Automated Distribution Centres (ADCs) in four Metros in India. Unlike the ordinary warehouses, in which the storages are ''flat'' and more spread out (horizontal), these ADCs have vertical storage using latest racking technologies like Very Narrow Aisle (VNA) and Selective Racking. These ADCs have world-class safety, security and surveillance fire-fighting systems.

The ADC in Chennai, which is in full operation now, is leased out to and operated through ProConnect Supply Chain Solutions Limited, the Supply Chain arm of your Company. Operations out of the ADC Chennai have been running very successfully over the last 40 months.This is clear proof that your Company is moving towards achieving efficiency through the concept of automation and process orientation. With an occupancy contribution of 40% and 50% comprising internal and external customers respectively, your Company is also focusing on third party logistics vigorously through ProConnect, thereby passing on shared benefits to your Company.

The construction of the ADC Kolkata is expected to be completed shortly and is likely to commence operations from fiscal year 2014.

In order to manage the growing needs of warehousing space and the expectation of efficiency in the northern part of the country, your Company has plans to also construct an ADC for Delhi & NCR. Your Company having bought the required land, is in the process of obtaining necessary approvals. Basic facilities at the site have been created and a compound wall has been built to secure the land.

Subsidiary Companies

Indian Subsidiaries are directly held by your Company. Overseas businesses at METACIS are carried out through Redington International Mauritius Limited, and in South Asia through Redington Distribution Pte Limited and their subsidiaries. Widening its horizon and venturing into difficult-to-penetrate regions enabled your Company to expand globally. All these factors enabled your Company to maintain a high growth trajectory though there are certain halts in the growth stories in Global trade and in the industry to which your Company belongs.

We broadly describe the operations of your subsidiary companies as follows:

Indian Subsidiaries

Easyaccess Financial Services Limited (Easyaccess)

Easyaccess, a Wholly Owned Subsidiary and the Non-Banking Finance Company (NBFC) arm of your Company, is India''s first NBFC to cater to the IT distribution industry''s channel finance needs. It provides extended finance to the channel partners for them to not only carry on their trade, but also to grow their business while at the same time ensuring better margins for your Company. Over the years, Easyaccess channel financing to the IT eco-system has gained traction bringing considerable financial discipline amongst the channel partners.

Easyaccess, since the commencement of its lending operations in 2008, has been operating in the B2B segment starting with factoring of receivables including portfolio factoring of your Company''s receivable, and extending short term loans to channel partners beyond trade credit period. In order to diversify the loan book and reduce dependence on the IT sector, Easyaccess has been extending short term loans, event driven finance to corporate trade in the non-IT sector. Easyaccess offers short term loan facility with an operating cycle of up to one year.

The average asset book declined during the financial year ended March 31, 2013 primarily on account of reduction in factoring business. The factoring segment was subject to regulatory and legislative changes as per the Factoring Regulation Act 2011 followed by the Reserve Bank of India''s guidelines for factoring businesses carried out by non-banking financial companies (NBFCs). The RBI guidelines require that, for doing factoring business, an NBFC has to be registered as ''NBFC-Factor'' with RBI and at least 75% of the total assets should be factoring assets and at least 75% of its total income should be from the factoring business. Easyaccess has taken the view that attempts would be made to increase factoring business in respect of your Company''s receivables or alternately other options would be explored to undertake captive factoring business by July 2014. Besides, during the year, Easyaccess had to align its business model in line with changed regulatory guidelines.

The current macroeconomic environment continues to be challenging due to general slowdown in the Indian economy with increasing stress in the banking system. Easyaccess adopted a cautious approach in building loan assets with emphasis on obtaining adequate collateral while financing non-IT customers. Accordingly, Easyaccess deferred entry into new geography during FY 12-13.

In a way, after posting consistent growth in gross income and profit during the first four years, the financial year ended March 31, 2013 was a transformational year.

Cadensworth (India) Limited (Cadensworth)

Cadensworth completed its first financial year in Value Added Distribution business. Cadensworth made significant investments in the areas of Marketing, Lead Generation and CTS (Consulting Training Support) during the year. These investments should help Cadensworth to move from Value Added Distribution to Solution Based Distribution in the years to come. Many reputed brands in the technology areas like LAN, WLAN, WAN, Data Centre, Collaboration, Security, Virtualization and Cloud have expressed interest to work with Cadensworth.

Relationship with new vendors will give Cadensworth opportunities to explore services revenue through post sales support, RMA handling and reverse logistics.

The existing Support Services business got further strengthened with the addition of new clients and new support locations by Flash Global Logistics. 3PL and RMA support for partners like Plantronics and Kodak looks promising with increase in business volumes. While the LCD panel repair volumes are on the rise with the expiry of warranty for products, the concept of replacement of units vis-a-vis repairs is a point to ponder. Cadensworth is also working with various Tablet Vendors for RMA support as it offers significant volumes as we move forward.

Nook Micro Distribution Limited (Nook Micro)

Nook Micro is focused on catering to the last mile of distribution with Regional Distribution as its key thrust area.

The global business economic slowdown saw a decline in sale of IT products and components sales. A gradual recovery of business during the second half of the year increased sales and helped Nook Micro''s top line growth. Nook Micro also shifted its focus from the component market oriented distribution to the PC (Personal Computer) market.

Nook Micro has adopted various strategies to penetrate into tier II and III towns and has got on board about 1500 channel partners. Nook Micro''s strengths lie in its large base of channel partners and widespread coverage. Keeping this in mind, many PC vendors tied up with Nook Micro to consolidate their regional distribution with a single distributor.

During the year, Nook Micro commenced distribution of consumer products in southern states. By leveraging the micro-distribution model and existing infrastructure, it was able to quickly capture the markets in the Southern states and achieve revenue growth. A strategic tie-up with ''Panasonic'' for distribution in the states of Tamil Nadu and Andhra Pradesh helped it get additional territories from the existing brands.

Nook Micro is continually taking steps to maintain overall growth rate by adding key vendors to its portfolio and intensifying its focus so as to address additional channels in the ensuing years.

To strengthen the financial position of Nook Micro, your Company has made an additional investment of Rupees Ten Crore in equity capital during the year.

ProConnect Supply Chain Solutions Limited (ProConnect)

ProConnect, which has commenced its operations with effect from 1st October 2012, focuses on servicing the supply chain needs of your Company and external clients.

ProConnect offers the entire gamut of Logistics services starting from import, warehousing and stock movement across geographies, picking to packing, order processing and delivery anywhere within its operating footprint. It offers services like Third Party Logistics, Reverse Logistics, In-Plant Logistics Management, Project Management and Supply Chain Consulting.

In the financial year under review, very prestigious clients like Reliance Communications, Lemon Mobile, Idea Cellular, ITW Signode through ASC, Henkel, Kansai Nerolac, Brother International, BenQ, Dalmia Continental & Sigma-Aldrich through Panalpina, to name a few, were added. This gives leverage to service verticals like Paints, Pharma etc in addition to the verticals already being served. For many clients, the services are on a pan-India basis utilizing more than 70 warehouses.

Service levels are achieved with the effective deployment of your Company''s Warehouse Management Software which seamlessly integrates with clients'' ERP to meet today''s fast paced business.

Overseas Subsidiaries

You would be pleased to know that the overseas operations continued to demonstrate growth even under one of the most challenging years for the METACIS (Middle East, Turkey, Africa and Common of Independent States) regions. Continued geo-political tensions in the Middle East region along with strife, political uncertainty and social unrests in many countries have aggravated an already weak economic environment resulting in dampened demand.

In spite of this uncertain environment, your Company''s overseas operations demonstrated resilience by growing both revenues and earnings by 17.7% and 27.7% respectively.

Redington Gulf FZE (RGF) continues to maintain its leadership position and was ranked the No 1 Distributor in the ME region by Channel Middle East for the 7th consecutive year. For the first time, it was also ranked No. 9 amongst the top 10 distributors in the EMEA region by Canalys Research, which is a significant achievement.

The PC product category had recorded a decline in the MEA region reflective of the global trend; however, your Company outperformed the market and demonstrated a growth in PC sales in FY13.

As you are aware, the PC product category is at crossroads with the "tablet invasion". While this presents an opportunity to participate in this fast growing segment, your Company presently is in advance discussions with several tablet vendors which we hope will fructify in a couple of quarters.

The company''s decision to commence distribution of Samsung mobile devices and tablets in Africa has proved to be a right one. The discontinuity of Nokia mobile phones during last year had a negative impact on your Company''s sales though Samsung contributed towards making this up to a large extent. Your Company is pleased to help Samsung significantly increase their mobile phone market share particularly in West Africa.

Your Company also took a strategic decision to reposition its support services business as an independent service provider. Towards this endeavor, the rebranding of Redington services as Ensure Services was initiated during the year and registration completed in 3 key markets of UAE, Saudi Arabia and South Africa. Ensure Services is also being registered as a Trademark in all the markets in which your Company operates.

Your Company continued its strategy of growth through market expansion by making a foray into the CIS region (the last untapped region in METACIS) through commencement of business in Kazakhstan.

RGF''s leadership in the Technology (Volume) distribution business was demonstrated by being voted as:

- "Retail Distributor of the year - ME" by DISTREE ME Retail Academy Awards

- "Specialist Retail Distributor of the year - ME" by DISTREE ME Retail Academy Awards

- "Middle East & North Africa Distributor of the year" by EMEA Channel Academy Awards

RGF continued to strengthen its Value Added Distribution business by making further investments in this division as well as expanding its product offering by adding over 8 brands. As a recognition of its growing prominence in this space, RGF also awarded the "Best Value Added Distributor Award" (Network Middle East Awards)

Your Company''s operations in METACIS regions were restructured such that all entities and operations (including Arena) were brought under RGF, which in turn is wholly owned by Redington International Mauritius Ltd (RIML). With this structural change in place, Redington International (Holdings) Ltd., Cayman Islands would be merged with RIML.

Employee Stock Option Plan 2008

The details of the options granted and options in force as required to be disclosed under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure "A" of this Report.

Additional Information relating to Conservation of Energy, Technology Absorption and Expenditure in R & D

The operations of your Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy. Your Company continues to use the latest technologies for improving the quality of the services it offers. Since your Company is not involved in manufacturing activities it did not incur any expenditure on Research and Development.

Directors

Mr. V.S. Hariharan and Mr. Keith WF Bradley were co-opted on the Board as additional directors on 31st July 2012 and 1st April 2013 respectively. Your Company has received notices from the members, under Section 257 of the Companies Act, 1956, proposing their appointment as Directors of the Company, along with the requisite deposit. Resolutions for their appointment as Directors of the Company are included in the notice of the ensuing Annual General Meeting.

During the end of the year under review, Mr. William P. Adamopoulos, Independent Director stepped down from the Board with effect from 31st March 2013, after due consideration and review of his time commitments for the Financial Year 2013-14.

The Board places its gratitude for the valuable service provided by Mr. Adamopoulos during his tenure as director on the Board of the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Mr. N. Srinivasan and Mr. Tu, Shu-Chyuan, Directors, would retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

The Board of Directors has, at their meeting held on 22nd May 2013, elevated Mr. Raj Shankar, Deputy Managing Director as the Joint Managing Director of the Company. Mr. Raj Shankar has been with the company for over 20 years in different geographies. He has built the overseas business to be a formidable force in the Middle East and Africa. He was responsible for our acquisition of Arena in Turkey. With his tremendous enthusiasm, energy and experience he will, in the coming years steer the company to greater heights.

The tenure of appointment of Mr. M. Raghunandan as Whole-Time Director came to an end on 28th February 2013. The Board of Directors at their meeting held on 31st January, 2013 have approved the re-appointment of Mr. Raghunandan as Whole-Time Director for a further period of two years with effect from 1st March, 2013 subject to the approval of shareholders in the ensuing Annual General Meeting.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. that appropriate accounting policies have been selected and applied consistently, and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2013 and of the profit for the said year;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis.

Credit Rating

CRISIL had revised down its rating on the long-term bank facilities of your Company to ''CRISIL A /Stable'' (read as CRISIL A plus-Stable) from ''CRISIL AA-/Negative''(CRISIL Double A minus - Negative). However, the rating on the short-term debt and bank loan facilities had been reaffirmed at ''CRISIL A1 '' (read as CRISIL A one plus).

ICRA reaffirmed its rating on the short term debt program/Commercial Paper, Non-fund based facilities and short term fund based facilities at ''ICRA A1 '' (read as ICRA A one plus). It has also reaffirmed its ratings for the Long term fund based facilities as ''ICRA AA-'' (read as ICRA Double A minus) and revised the rating outlook to ''stable'' from ''negative''.

Particulars of Employees

For the financial year under review none of the employees fall under the revised ceiling limits prescribed under section 217(2A) of the Companies Act, 1956.

Auditors

The Statutory Auditors of your Company, M/s Deioitte Haskins & Sells, Chartered Accountants retire at the ensuing Annual General Meeting and have confirmed their eligibility under Section 224(1 B) of the Companies Act 1956 and willingness to accept office, if re-appointed. The resolution for their re-appointment is included in the notice for Annual General Meeting sent herewith.

Foreign Exchange

Your Company''s earnings / outgo in foreign currencies are outlined in the notes to the Annual Accounts.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, a report on Corporate Governance and Management Discussions & Analysis are attached to this Annual Report.

Acknowledgment

Your directors would like to place on record their grateful appreciation for the cooperation received from the Customers, Vendors, Banks, Financial Institutions, Promoters and the Investing Public.

Your Directors take this opportunity to appreciate the wholehearted dedication and commitment of the employees of the Company and its subsidiaries who have contributed to the continued success of your Company.

On behalf of the Board of Directors

Place : Singapore J. Ramachandran

Date : May 22, 2013 Chairman


Mar 31, 2012

The Directors take pleasure in presenting the Nineteenth Annual Report of the Company for the year ended March 31, 2012.

Financial Highlights

(Rs.in Cr)

Particulars Consolidated Standalone

2011-12 2010-11 2011-12 2010-11

Net Sales/Income from operations 21192.99 16703.77 9840.40 8131.95

Add: Other Income 29.03 18.88 31.08 12.89

Total Revenue 21222.02 16722.65 9871.48 8144.84

Less: Total Expenditure

a) Cost of goods sold 19934.75 15766.11 9280.90 7679.83

b) Staff Cost 280.37 206.57 97.53 83.10

c) Other Expenditure 373.50 278.32 171.81 131.99

Profit before Interest, Depreciation and Tax (EBIDTA) 633.40 471.65 321.24 249.92

Less: Finance Cost 152.04 96.09 77.40 43.05

Less: Depreciation and Amortisation 31.03 24.56 10.55 13.47

Profit before Tax (PBT) 450.33 351.00 233.29 193.40

Less: Tax Expense 111.29 86.23 76.48 64.96

Profit after Tax (PAT) 339.04 264.77 156.81 128.44

Less: Share of loss of Associate 0.02 0.00 NA NA

Less: Minority Interest 46.28 38.77 NA NA

Net Profit for the year 292.74 226.00 156.81 128.44

Previous year figures are re-grouped.

Your Directors have made the following appropriations:

(Rs. in Crore) Balance of Profit brought forward from last year 298.11

Less: Dividend for the year 2010-11 including Dividend Distribution tax for additional equity shares allotted under the ESOP scheme after the closure of the financial year 0.08

298.03

Add: Profit for the year 2011-12 156.81

Profit available for appropriation 454.84

Less: Proposed Dividend @ Rs. 0.40 per Equity Share of

Rs. 2/- each (i.e. 20%) for the 15.95 year ended March 31, 2012

Dividend Distribution Tax thereon 1.97

Transfer to General Reserve 11.76 29.68

Balance of Profit to be carried forward 425.16

Dividend

Your Directors are pleased to recommend for approval of the Members a dividend of Rs 0.40 per equity share of face value Rs 2/- each of the Company for the financial year 2011 -12. The lower dividend, this year, is to augment resources for the growth of the Company's immediate and future business opportunities.

Performance

During the year under review, on a consolidated basis, your Company has continued to maintain the growth momentum. There has been a good growth in terms of turnover by 26.9%, EBIDTA by 34.3% and PAT by 29.5% over the previous year. The consolidated revenue of your Company was t 21,222.0 Crore as against Rs 16,722.7 Crore in the previous year with a CAGR of 19.1 % for five years. The consolidated net profit for the year under review was Rs 292.7 Crore as against Rs 226.0 Crore in the previous year with a CAGR of 21.1 % for five years.

The Standalone revenue of your Company was Rs 9,871.5 Crore as against Rs 8,144.8 Crore in the previous year (Year-on-Year growth 21.2%) and the profit after tax was 1156.8 Crore as against 1128.4 Crore in the previous year (Year-on-Year growth 22.1%). The Earnings per Share (EPS) on a consolidated basis (based on weighted average number of shares) increased to Rs 7.4 in the year under review as compared to Rs 5.7 in the previous year. EPS on a standalone basis (based on weighted average number of shares) increased to Rs 3.9 in the year under review as compared to Rs 3.2 in the previous year.

Distribution business

Information Technology Products

As anticipated towards the end of FY 2010-11 and projected by various Economic forums, the Information Technology (IT) industry in India grew quite well during the first half of the year under review. On the back of strong investments by Government and large corporates in the infrastructure and Enterprise space, the IT distribution business of the Company posted significant growth during the first two quarters.

The sudden and rapid downtrend in the country's and Global business environment during the second half of FY 11-12 threw up challenges, with contraction in demand from Government and Large Enterprises. Continued high interest rates, a dramatic weakening of the rupee and a general overhang of negative sentiments borne out of lack of policy initiatives and decision making by the Government slowed down the demand for IT products. The deepening of the economic crisis in Europe also cast its shadow on India's economic metrics during the second half of the year.

The branded PC market remained under pressure from loss of traction in Government and Large Enterprise space. The assembled / unbranded PC segment, which services a large part of Tier-3 and Tier-4 cities demand, came under severe supply constraints starting October '11. Due to the unprecedented floods in Thailand, which wiped away almost 50% of the world's Hard Disk Drive (HDD) manufacturing capacity, the availability of HDDs reduced to about 35% of the total estimated demand for the period. The supply of assembled PCs, which constitute about 25% of the total Desktop & Notebook demand in the country, suffered a huge setback. This had a knock-on effect on the demand for CPUs, Mother Boards and Memories, further impacting the overall revenue of your Company. As a result, the overall PC market growth during FY 11 -12 is estimated to have been 9-10% as against the projected growth of 13-15%.

Your Company continued to augment its products and solutions by offering to its business partners by adding niche vendors such as Molex, Smart Technologies and ADC India Communications. This would strengthen your Company's positioning as a one-stop-solution for its partners for all their requirements.

As briefly mentioned in our last report to the shareholders, Virtualization and Cloud Computing is expected to bring in a paradigm shift in the way IT assets are procured and deployed by both large organizations as well as Small & Medium Enterprises. While in India the change appears to be gradual your Company proactively engaged with vendors to take initial steps in this field with the objective of being ready with appropriate offerings when the change materializes.

Your Company's new partnerships with VMWare, Nivio Technologies and Microsoft in the Virtualization and Cloud Computing space would form the foundation for building a strong portfolio in this space. Its engagement with traditional vendors like IBM, Cisco, HP, Hitachi and Oracle enables your Company to build on a portfolio that will facilitate distribution of specific solutions to partners in areas of SaaS (Software as a Service), PaaS (Platform as a Service) and laaS (Infrastructure as a Service), to address the Cloud computing requirements of Large, Medium and Small enterprises.

Consumer and Lifestyle Products

The distribution of Digital Life Style products by your Company continued to have another strong performance in the last fiscal year. This vertical has shown a 50% revenue growth over the previous fiscal year.

Your Company is playing a significant role in India's Smartphone revolution. The Smartphone segment is expected to grow at a Compounded Annual Growth Rate (CAGR) of over 50% over the next five years. Your Company maintains a strong position in this space with its strong relationship with Research in Motion for their BlackBerry Smartphones. Although Research in Motion had a setback at the global level, the Company continues to be a key player in the Indian market. Your Company has also increased its presence in the Smartphone space, with its tie-up with Huawei.

Your Company is focused on capitalizing the growth of smart communication devices in India. In the coming fiscal year your Company will look to partner with one or more device manufacturers and also with manufacturers of complementary products.

Your Company has positioned itself to be one of Apple's most preferred partners in India. Apple's iPad continues to show momentum and is the leader in the tablet segment inspite of a slew of competitors introducing lower cost alternatives.

Your Company has taken significant strides in the fast growing Digital Printing space in the past fiscal year. The sizeable increase in the installed base of HP "Indigo" machines in India has not only contributed to revenue growth, but has also ensured significant growth in the annuity income on usage of consumables.

Hardware Support Services

The IT & Telecom industry continues to witness increased intelligence and complexity in new generation products. And in India, the industry is now penetrating the small towns and villages very rapidly. Taken together, these factors have made pan-India after sales service vital, not just for the success of new product launches, but also for the sustenance of growth of brands in the Indian market.

In anticipation, your Company has set up hardware support service centres, spanning the length and breadth of India. Today, through 70 owned service centres, supported by a certified franchisee network of 220 service partners, your Company provides the full spectrum of warranty and post-warranty services to the customers of our product vendors - covering Solution design and Consulting, Call Center support, Field Engineering support, Parts warehousing, Forward and Reverse logistics, Imports and Re-exports, and Asset recovery . All these centres run on a robust CRM that enable your Company to tightly manage the end-to-end service life cycle and create a great customer experience. This is one of the key differentiators of your Company in the Supply Chain industry, and a growth enabler for our vendors.

Your Company's support service is ISO 9001:2008 certified and is in the process of being certified for ISO 20000 compliance. In IT support, more than 100,000 customers avail services from your Company starting from Desktop PCs to Enterprise systems. Your Company has successfully launched and started providing Remote Infrastructure Management services to some large corporate customers. In the Telecom space, your Company strengthened its Smartphone support portfolio by garnering national support authorization from HTC for their Smartphones.

During the period under review, your Company has expanded the Enterprise support portfolio through new vendor engagements. Brocade has appointed your Company as SDP (Service Delivery Partner) and PSP (Professional Services Partner), authorizing us to provide installation and support services for their IP Networking products. Cisco has appointed your Company as Video Value Added Distributor after successfully meeting all Cisco service authorization requirements. Your Company has also been appointed as ISP (Independent Service Provider) by Hitachi Data Systems for rendering professional and support services for their entire range of Storage products.

Supply Chain Management Services

Supply Chain Management forms a basic and integral part of the Company's business offerings to vendors and Channel Partners. Your Company has end-to-end logistics capabilities starting from import, warehousing, stock movement across the geography, packing / repacking, order processing and delivery to any part within the geographies it operates. The Company can reach its products to customers in more than 1500 cities in less than 48 hours.

To solidify the brand value of your Company's supply chain services, your Company offers Third Party Logistics (3PL) services ranging from imports management, warehousing till last mile transportation and Reverse logistics services. Your Company's 3PL services has got a diversified client base of various industries including IT, Telecom, Mobiles, Home appliances, FMCG, White Goods etc. Your Company understands the varied requirements of different clients and has successfully offered its services to several new customers like BSH Home Appliance Ltd, Carl Zeiss, Nachus

Electronics, Cafe Coffee Day, Growmore, DSV Air & Sea Pvt.Ltd for Le Creuset and Celestial Tech Vates Ltd etc during the year under review.

As globally the online sales model is catching-up, each of these vendors are keen to tie-up with a logistics partner for backend support, that are similar to what your Company is already into. This emerging and fast growing concept is going to open a window of opportunities for 3PL service providers like us and pave the way for increase and sustainable profitability in the years to come.

Understanding the value of an organized supply chain sector, your Company is improving its warehousing and logistics capability in terms of infrastructure, software availability and multi locational offerings. In order to cater to the expanding market and to reach the products on time to the clients, during the year, your Company added warehouses in strategic locations thereby increasing the total warehouses to 70 with close to 1 Million Sq .ft.

The Reverse Logistics Center of your Company has a proven record of more than 10,000 satisfied customers in its fold and its services are well received and appreciated by major brands including HP, Wipro, Acer, Intel, etc

Subsidiary Companies

During the year under review your Company had made additional investments and strategic changes in the business operations of the subsidiary companies facilitating more significant contribution from them in the years to come to the consolidated revenue stream of the Company.

We broadly describe the subsidiary operations as follows:

Indian Subsidiaries

Easyaccess Financial Services Limited (Easyaccess) the wholly owned subsidiary and the Non-Banking Finance Company (NBFC) arm of your Company, is India's first NBFC to cater to the IT distribution industry's channel finance needs. Easyaccess offers working capital facility with an operating cycle of 90 to 120 days. It provides extended finance to the channel partners for them to not only carry on their trade, but also to grow their business while ensuring better margins for your Company at the same time. Over the years, Easyaccess channel financing to the IT eco-system has gained significant traction bringing considerable financial discipline amongst the channel partners.

With an Independent professional team, Easyaccess pursues financing the third-party corporates. While venturing into this business has reduced Easyaccess's dependence on Redington / Redington's customers, it also offers an attractive interest spread. Easyaccess has run quite successfully its first four years of operation without any non- performing assets, which is a commendable achievement.

Cadensworth (India) Limited (Cadensworth), engaged in the business of Support Services has shown significant improvement in its performance during the financial year under review. The support services business for critical parts being provided on behalf of M/s. Flash Global Logistics for their clients in India has done fairly well with addition of new customers. The repair service business for Pegatron too has added to the revenue growth. Cadensworth has passed the Quality Management System Standard during the ISO Audit in January 2012 and the validity of ISO 9001: 2008 Certification has been extended till 18th January 2015. The LCD Panel repair opportunity seems very promising for the coming years.

During this year, Cadensworth also made a beginning in Value Added Distribution Services. Cadensworth began its journey in the distribution business with a strategic relationship with EMC and will focus on taking to market newer and higher-value technologies such as data centers, virtualization , secure networking and support services. Value added distribution services will involve developing and supporting specialist partners who reach and service complex IT projects.

Nook Micro Distribution Limited (Nook Micro) - During FY 12, Nook Micro had its full year of operation post embarking on its journey with low cost micro distribution last year. It added over 1500 Channel Partners in 175 towns across 96 districts all over South India. Nook Micro is positioned to be the preferred intermediary to address the last mile connect amongst national distributors, vendors, retailers and assemblers. To strengthen the financial position of Nook Micro, your Company has made an additional investment of Rs 6 Crore in its equity.

More vendors and distributors are looking forward to tie up with Nook Micro to get in depth coverage of the market for their products. Nook Micro has also started managing the distribution of Consumer Electronics products in South India from April 2012. This will enable the Company to maximize the revenue by utilizing the existing infrastructure and micro distribution strategy. By adding consumer electronics products, the Company is expected to add up another 1500 channel partners in South India.

Overseas Subsidiaries

Your Company's overseas subsidiaries grew both revenues and profitability impressively by 30% across each of the markets it participated including Singapore & South Asia, Middle East, Turkey and Africa. Fortunately, the general economic slowdown and geo political tensions in the Middle East and North Africa (MENA) region did not slow down the pace of growth.

Redington Gulf has retained its leadership position by being rated as the number one distributor in ME for 6 years in succession. Redington Gulf continues to enrich its brand portfolio and foster growth by adding new brands in the Volume and Value added distribution portfolio. The new brands added during the year to its portfolio include Seagate, Microsoft, LG, Tripplite, Lifesize, EMC, Siemens, Barracuda Networks, Belkin and Targus.

The hardware support service of your Company's overseas subsidiary is well positioned as a neutral service provider. The total number of service centers in MEA has increased to 49 making Redington Gulf the biggest service provider in MEA with the widest network. The scope of support services have been extended to mobile devices and consumer electronics in addition to IT hardware products.

Your Company's overseas subsidiaries' 29 warehouses were linked to a central warehouse admeasuring about 95,000 square feet in Jebel Ali, Dubai. The Automatic Distribution Centre in Jebel Ali has incorporated a superior technology allowing it to enhance the efficiencies and productivity.

Redington Gulf has once again retained the EMEA Channel Academy 2012 awards-the "MENA Preferred Distributor Award" for delivering excellent services to its partners. Redington was also awarded as the "Retail Volume Distributor of the Year" for the 6th consecutive year.

Though the countries affected in the Arab spring are slowly recovering, the ongoing political tensions in the region and in the surrounding countries has a hangover effect on the general business environment. During the year under review, the 19% depreciation of Turkish Lira against USD has resulted in lower consumption and a detrimental impact on sales and profits of Arena, the listed Company in Turkey in which your Company had invested 49.4% in November 2010.

Employee Stock Option Plan 2008

During the year, out of the lapsed options issued under the Employee Stock Option Plan 2008 your Company has granted 173,212 options to the employees of the Company and its subsidiaries. The details of the options granted and options in force as required to be disclosed under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure "A" of this Report.

Additional Information relating to Conservation of Energy, Technology Absorption and Expenditure in R & D

The operations of the Company involve low energy consumption. Adequate measures have, however, been taken to conserve energy.

The Company continues to use the latest technologies for improving the quality of the services it offers.

Since the Company doesn't involve in manufacturing activities it didn't incur any expenditure on Research and Development

Directors

During the year, post acquisition of 11.99% stake in the Company, Standard Chartered Private Equity the largest Private Equity Shareholder of the Company has nominated Mr. Nainesh Jaisingh, as their representative on the Board. Mr. Nainesh Jaisingh was appointed as an Additional Director of the Company with effect from 5th August 2011. Mr. Lin, Tai-Yang was co-opted on the Board as an additional director in place of Mr. Huang Chi Cheng, the earlier nominee of M/s. Synnex Global Limited, Taiwan with effect from 28th October 2011. M/s Nainesh Jaisingh and Lin Tai-Yang will hold office till the date of this Annual General Meeting. The Company has received notice from members of the Company, under Section 257 of the Companies Act, 1956, proposing their appointment as Directors of the Company, along with the requisite deposit. Resolutions for their appointment as Directors of the Company are included in the notice of the ensuing Annual General Meeting. At the Meeting of the Board of Directors held on 25th May 2012, the Board approved appointment of Mr. Mukul Nag as an Alternate Director to Mr. Nainesh Jaisingh.

During the year, Mr. Steven A Pinto, Independent Director resigned from the Board with effect from 28th October 2011. The Company continues to avail the services of Mr. Steven A Pinto as a Director on the Board of M/s Easyaccess Financial Services Limited, (Easyaccess) a wholly owned subsidiary Company in an Independent capacity. Ms. Chew Lee Fang, who had been an independent Director on the Board of Easyaccess for over four years, was appointed as an additional director with effect from 5th August 2011 and subsequently she stepped down from the Board with effect from 27th January 2012.

The Board places on record its appreciation for the services rendered by Mr. Huang Chi Cheng, Mr. Steven A Pinto and Ms. Chew Lee Fang during their tenure as Directors.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Mr. R. Jayachandran and Prof. J. Ramachandran, Directors would retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The tenure of appointment of Mr. Raj Shankar as Deputy Managing Director will come to an end on 25th July 2012. The Board of Directors at their meeting held on 25th May 2012 have approved re-appointment of Mr. Raj Shankar as Deputy Managing Director for a period of five years with effect from 26th July 2012 subject to the approval of shareholders in the ensuing Annual General Meeting and the approval of the Central Government, since he being a non-resident.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. that appropriate accounting policies have been selected and applied consistently, and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March 2012 and of the profit for the said year;

iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis.

Credit Rating

Amidst the turbulent macroeconomic conditions, your Company's credit ratings remained stable this year. CRISIL has retained its rating on the Letter of Credit, short term loan and short term debt programme at 'CRISIL A1 ' (read as A one plus). Also CRISIL while reaffirming its rating on cash credit and working capital demand loan as 'CRISIL AA-' (read as Double A minus), revised the outlook as 'Negative'. CRISIL has stated that the outlook may be revised to 'Stable' if the Company's capital structure improves significantly as per expectations.

ICRA, also reaffirmed its rating on the short term debt program/Commercial Paper, Non-fund based facilities and short term fund based facilities at 'ICRA A1 ' (read as A one plus). It has also reaffirmed its ratings for the Long term Fund based facilities as 'ICRA AA-' (read as Double A minus) and revised the outlook from stable to negative.

Particulars of Employees

For the financial year under review none of the employees fall under the revised ceiling limits prescribed under section 217 (2A) of the Companies Act, 1956.

Auditors

The Statutory Auditors of your Company, M/s Deloitte Haskins & Sells, Chartered Accountants retire at the ensuing Annual General Meeting and have confirmed their eligibility under Section 224(1 B) of the Companies Act 1956 and willingness to accept office, if re-appointed. The resolution for their re-appointment is included in the notice for Annual General Meeting sent herewith.

Foreign Exchange

Your Company's earnings / outgo in foreign currencies are outlined in the notes to the Annual Accounts.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, reports on Corporate Governance and Management Discussion & Analysis are attached to this Annual Report.

Acknowledgment

Your directors would also like to place on record their grateful appreciation for the cooperation your Company has received from the Customers, Vendors, Banks, Financial Institutions, promoters and the Investing Public.

Your Directors take this opportunity to appreciate the wholehearted dedication and commitment of the employees of the Company and its subsidiaries that have contributed to the success of your Company.

On behalf of the Board of Directors

Place : Chennai J. Ramachandran

Date : May 25, 2012 Chairman


Mar 31, 2011

To the Members,

The Directors are delighted to present the Eighteenth Annual Report on your Company's business and operations together with the Audit Report and Audited Accounts for the year ended March 31, 2011.

Financial Highlights (Rs. In Crore)

Particulars Consolidated Standalone 2010-11 2009-10 2010-11 2009-10

Net Sales /Income from operations 17,458.54 13,757.75 8,316.01 6,449.61

Other Income 19.54 19.80 13.05 9.95

Total Revenue 17,478.08 13,777.55 8,329.06 6,459.56 Total Expenditure

a) Cost of goods sold 16,521.04 13,033.14 7,864.04 6,085.26

b) Trading Expenditure 53.48 34.93 33.00 19.55

c) Staff Cost 206.57 165.50 83.10 79.78

d) Other Expenditure 225.34 178.25 99.00 73.37 Profit before Interest, Depreciation and Tax (EBIDTA) 471.65 365.73 249.92 201.60

Interest 96.09 66.38 43.05 33.04

Depreciation 24.56 23.43 13.47 15.40

Profit before Tax (PBT) 351.00 275.92 193.40 153.16

Provision for Taxation 86.23 63.90 64.96 53.70 Profit after Tax (PAT) 264.77 212.02 128.44 99.46

Minority Interest 38.77 27.69 Nil Nil

Net Profit for the year 226.00 184.33 128.44 99.46

Previous year figures are re-grouped.

During the year under review there has been commendable growth on a consolidated basis - in terms of turnover by 26.85 %, EBIDTA by 28.96% and an interesting growth in PAT by 22.61% over the previous year.

Your Directors have made the following appropriations:

(Rs. in Crore)

Balance in Profit and Loss Account brought forward 232.95

Less: Dividend for the year 2009-10 including Dividend Distribution tax for additional equity shares allotted under the ESOP scheme after the closure of the financial year 0.13

232.82

Add: Profit for the year 2010-11 128.44

Profit available for appropriation 361.26

Less: Proposed Dividend @ Rs. 1.10 per Equity Share of Rs. 2/- each (i.e 55%) for the year ended March 31, 2011 43.70

Dividend Distribution Tax thereon 6.59

Transfer to General Reserve 12.84 63.13

Balance in the Profit and Loss account to be carried forward 298.11

Dividend

Considering your Company's performance, the Directors are happy to recommend for approval of the Members a dividend of Rs. 1.10 per equity share of face value Rs. 2/- each of the Company for the financial year 2010-11.

Shareholders are aware that each share of face value of Rs.10/- was sub-divided into fi ve Equity Shares of Rs. 2/- each during the year. Effectively therefore the proposed dividend works out to Rs. 5.50 on the original face value of Rs.10/- each.

Performance

Buoyed by your Company's strong Indian and Global performance, revenue grew by 27% demonstrating once again the consistent growth in Profits. The Consolidated revenue of your Company was Rs.17478.08 Crore as against Rs.13777.55 Crore in the previous year with a CAGR of 18% for fi ve years. The Consolidated net Profit for the year under review was Rs.226.00 Crore as against Rs.184.33 Crore in the previous year with a CAGR of 22% for the last 5 years.

The Stand alone revenue of your Company was Rs. 8329.06 Crore as against Rs. 6459.56 Crore in the previous year (Year-on-Year growth 28.94%) and the Profit after tax was Rs.128.44 Crore as against Rs. 99.46 Crore in the previous year (Year-on-Year growth 29.14%).

The Earnings per Share (EPS) on a consolidated basis (based on weighted average number of shares) increased to Rs. 5.72 in the year under review as compared to Rs. 4.70 in the previous year, while EPS on standalone basis (based on weighted average number of shares) increased to Rs. 3.25 in the year under review as compared to Rs. 2.54 in the previous year.

Distribution Business

Information Technology

The Information Technology (IT) industry has been acknowledged as key to the continuing growth of India's economy and IT Distribution plays an important role in making technology and its products available to all sections of the Indian industry and society.

The IT Hardware, Software and Services business was estimated at approximately Rs. 80,000 Crores during FY 2010-11. This is estimated to grow to Rs. 125,000 Crores by FY 2013-14. The Hardware and Software Distribution business which is the domain of operations of your Company, was estimated at Rs. 37,000 Crore during FY 2010-11 and is estimated to grow to Rs. 56,000 Crore by FY 2013-14.

Your Company has now achieved a well-diversifi ed vendor portfolio in all product categories and this allows your Company to withstand occasional disturbances in the distribution eco-system of specifi c vendors. Any drop in sales of a particular brand can be made up by taking advantage of the increased sales of a competing brand. The deep engagement of your company with competing brands of PCs and Laptops allowed it to neutralise the impact of changes in the distribution strategy brought in by HP during the last Financial Year.

Notebooks remain a major growth area for the IT industry and with HP, Lenovo, Samsung, Acer, Toshiba, Fujitsu, HCL and Wipro as vendors, your Company enjoys broad representation in all brand positions and price points and caters to approx 18% of the Notebook demand in the Distribution space. Total PC (Notebook and Desktops) demand is expected to grow at an average rate of 20% for the next 3 years.

"Infrastructure" investment in IT products by Central and State Governments towards achieving wider e-Governance has resulted in a huge requirement of IT products in this sector and your Company has partnered with large National System Integrators for several prestigious projects during the Financial Year under review. One of the major areas of government infrastructure investment is the ongoing project towards Accelerated Power Development and Reforms Programme (APDRP). This constitutes investments for modernizing all State Electricity Boards to enable them to accurately measure customer usage and distribution loss of electricity produced and transmitted. The total project expenditure in the distribution addressable space is expected to be in the region of Rs. 800 Crores and your Company has positioned itself to partner in at least 40% of this requirement.

Unique Identification (UID) Project has become a showcase for the Central Government in the e-Governance space. It is a "one-of-its-kind" project in the world and attempts to biometrically enroll the entire population of India in a time- bound manner. Headed by Nandan Nilekani, erstwhile CEO and CMD of Infosys, the basic aim of this project is to better target social sector investments. However, there are likely to be many spin-offs in areas requiring accurate and quick identifi cation of individuals and it is expected that many Private, Central, and State Government services will be focused on the Indian citizen's UID Number. The total project cost is estimated to be Rs. 4000 Crores.

The core equipment required for this project is the Biometric Solution comprising the Fingerprint Capturing Device and the Iris Scan Device. The total requirement of such devices for the UID Project is estimated at 80,000 sets. In this context, a significant breakthrough has been achieved by your Company by signing up a Distribution Agreement with one of the leading brands for supply of the Biometric Solution. This has enabled your Company to be engaged in the landmark UID Project and will help it maintain a strong presence in all forthcoming projects requiring biometric identifi cations.

The wide range of products that your Company deals in helps it to manage shifts in the "usage pattern" of customers. Consequently in the Financial Year under review, although the assembled PC space continued to shrink as the price gap between assembled units and branded products reduced drastically, the slowdown in the sale of PC components by your Company was compensated by the simultaneous increase in its sale of branded products.

In order to better address the fast growing Tier 3 & Tier 4 cities, your Company decided to divide its market into two segments - INDIA-1, comprising of the top 10 territories which continue to generate more than 70% of your Company's revenue and INDIA-2, comprising of the remaining territories which are today growing at a rate which is much faster than INDIA-1. INDIA-2 is now handled by an exclusive senior resource who is tasked with addressing all human resource and business related issues in this territory. This additional focus is expected to allow your Company to fully capitalize on the growth momentum in the INDIA-2 market.

Consumer and Digital Lifestyle Products Division

Your Company's diversifi cation and focus into the non-IT (Consumer and Digital Lifestyle Products) has started yielding significant results. With 14 major Consumer and Digital Lifestyle brands in its portfolio and a partner base of over 5000, your Company has carved out a strong presence in this space with a 146% growth in revenue during the last fiscal.

The Smartphone segment in India is one of the fastest growing segments in the Indian mobile phones industry and its demand is expected to accelerate from 6 million units during FY 10-11 to more than 50 million units by FY 13-14. The strategic tie-up with brand Blackberry has enabled your Company to effi ciently tap into this rapid growth segment. Your Company has tied up with leading brands Acer, Dell and Huawei to include the Android smart phones in its portfolio and this will help it to enhance its presence and share in the smart phone segment.

The introduction of iPad by Apple has redefi ned the tablet category and has proved to be a "game changer" in other markets. Consumer demand for the iPad has in fact impacted the sales of conventional notebooks in developed markets and it is forecast that the Indian customer may not be any different. While the actual impact of iPad and other tablets is still to be measured in India, our position as Apple's leading distributor in the country will help us play a major role in fulfi lling the tablet demand in the Indian market. This category is set to revolutionize the market due to its offering of an easy and stylish user experience. Further, your company's strong relationships with vendors like RIM, HP, Lenovo, Acer, Dell and Samsung, all of whom intend to launch a slew of tablet products in India, would help it maintain its strong presence across all technology platforms, brand positions and price points.

Your Company's exclusive tie-up with Microsoft's Xbox 360 continues to have a strong presence in the Indian Gaming segment. The Launch of Microsoft Kinect in India – which holds the Guinness record for the fastest selling consumer product globally – has spurred the demand in India too, for gaming consoles and your Company is able to effectively cater to this growing demand. The Consumer Durable products revenue maintained a high growth momentum with the addition of two new vendors – Pioneer & Voltas - to the existing bouquet of products from LG, Whirlpool and Godrej.

The continued exclusive tie-up with HP's "Indigo" Digital Printing Solutions has helped your Company maintain a share in the fast growing "Digital Photo Printing" segment. The overall Digital printing industry is showing signs of growth and the sizable installed base of Indigo machines in the country now enables your company to earn a healthy annuity income by way of "usage based payments".

Support Services Business

The fast growth in the IT hardware market is supplemented by an adequate support system to sustain the growth. Understanding the value of support services, your Company capitalized on the demand for good service providers. After-sales service has become an integral part of your Company's overall strategy when it comes to building loyalty, improving customer satisfaction and discovering new marketing opportunities. Your Company's service function has world class facilities and systems to provide Warranty and Post Warranty Support Services across the country through Remote, Carry-in and Onsite service delivery models. While competitors in a similar business space have faced challenges in achieving operational excellence, your Company exceeded committed targets accepted with vendors.

Through a network of 73 owned service centers and 273 Partner service centres your Company is poised to address a widespread market touching every nook and corner of the country. Your Company supported by the Spare Parts Management System (SPMS) and the Call Management System and Service On Line (SOL) seamlessly manages complex operations with more than 100,000 part transactions per month. Your Company's High Level Repair Centres (HLRCs) are strategically positioned at Delhi, Mumbai and Chennai to carry out component level repairs for smart phones, other mobile phones and fi xed wireless devices. During the financial year under review, your company started providing pre-sales support services to Partners and customers of Cisco, Avaya, EMC and RSA for Networking, Storage and Security products. Netapp, a leading Storage products brand has appointed your company as Authorized Implementation and Support Partner.

Your company has been appointed by HP as an exclusive Neutral Support Partner for TSD Dispatch Support for the East Zone of India. As part of this support agreement your company opened 20 dedicated service centers in East and North East India.

Keeping in line with the rapid growth of Blackberry Smart Phone sales and customer requirements, your company opened 9 new exclusive Service Centers in major cities, apart from 73 centres spread across the country. Apple appointed your company as an authorized service partner to support iPhone, iPad, iPod and Mac Books.

Third Party Logistics (3PL) Services

The economic slowdown compelled many vendors to resort to effective ways of handling inventory and its related cost. There is an increased preference for Third Party Logistics (3PL) service providers like your Company for effectively fulfi lling their logistics requirements in a cost effective manner. Being a supply chain service provider, your Company understands the varied requirements of different clients and has successfully offered its services to several new customers like EC Media International, Socomec UPS, Dorma India, Tower Vision, Lenovo and Ncomputing during the year under review.

Automated Distribution Centres (ADC)

The ADC at Chennai has been operational since Q2 of FY 09-10 (last financial year). It facilitates an extensive inventory of products with improved operational effi ciency to meet the requirements of the company and its 3PL clients throughout the year by keeping their products on the move without any delay. The construction of the ADC in Kolkata will commence during the current financial year. In recognition of your Company's unmatched service, TUV NORD has awarded ISO 9001 2008 Certifi cation for the Chennai ADC for deploying the best management system for providing warehousing and distribution for various products.

The Automated Distribution Center (ADC) at Dubai (second in the company's history, after Chennai ADC) has started functioning effective September 2010. With a 95,000 sq. ft. warehouse space, the ADC is strategically located just 20 minutes from the upcoming Al Maktoum International Airport in Jebel Ali Free Zone. The ADC is fully equipped with 16 metre High Racking System with Very Narrow Aisle Technology (VNA) and Material Handling Equipments (MHE). The new Logistics Centre has many advanced features like Radio Frequency Identifi cation (RFID) and is completely WiFi enabled. Your Company is the fi rst company in the Middle East to implement the Task Resource Management (TRM), an integrated module of SAP.

Subsidiary Companies

The Financial year 2011 has been a favourable year for your Company's subsidiaries not only in India but also abroad. Despite diffi culties posed by the economic recession around the world, your Company's Indian and Overseas subsidiaries contributed remarkably to the overall growth of your Company.

Indian Subsidiaries

Easyaccess Financial Services Limited (EAFSL), the Non-Banking Finance Company (NBFC) is engaged in providing trade fi nance to your Company's channel partners. EAFSL has posted good results registering a 48% growth in Profits. The company enjoys 'P1 ' (read as P one plus) rating for short term debt from CRISIL. During the course of the year the company also provided trade fi nance to certain other verticals other than IT.

Nook Micro Distribution Limited (Nook Micro), is focused on addressing the "Last mile of Distribution" with Regional Distribution as its key thrust area. During FY 11, Nook Micro has embarked on its journey with in-depth distribution across South India. In Tamil Nadu it addresses over 500 Channel Partners in 75 towns across 29 districts.

With increasing demand for digital devices there is a growing opportunity to reach these products effi ciently at a competitive supply chain cost. Nook Micro is positioned to be the preferred intermediary to bridge the gap between national distributors, vendors, retailers and assemblers. To strengthen the financial position of Nook Micro, your Company has invested a sum of Rs. 3.95 Crores in the equity of the Company.

Cadensworth (India) Limited (Cadensworth), engaged in the business of Support Services has shown improved performance during the financial year under review. Cadensworth has tied up with Kodak India Private Limited for Scanner Board Repair Services and Parts Logistics Services for its document imaging solution. The support service business for critical parts being provided on behalf of M/s. Flash Global Logistics for their clients in India, looks promising. Cadensworth has retained the ISO 9001: 2008 Certifi cation this year.

Overseas Subsidiaries

Your Company's overseas subsidiaries had another year of good growth in revenues and Profitability. Your Company's Middle East, Turkey and Africa operations which constitute over 45% of the consolidated revenue faced social and political upheavals in some of their markets. There were security issues in the North Africa region, pitched battles in the streets and regime changes in certain countries. Despite these challenging circumstances your Company's Middle East and Africa Subsidiary once again demonstrated strong performance with a revenue growth of 27% and a PAT growth of 19% as compared to the previous year. The company's subsidiary in Singapore and South Asia delivered significant growth of 49% in sales revenue and 48% in PAT year on year.

For the 4th year in succession Redington Gulf was judged the No.1 Distributor in the Middle East, by Channel Middle East - a respectable IT Trade publication in Middle East. Redington Gulf is almost twice the size of its nearest competitor.

As part of its strategy to explore opportunities in newer markets, your Company's overseas investment holding company in Cayman Islands viz. Redington International Holdings Limited (RIHL) has through its subsidiary invested in a 49.4% stake in ARENA BILGISAYAR SANAYI VE TICARET ANONIM SIRKETI (Arena), a company listed on the Istanbul Stock Exchange and the second largest distributor of information technology products in Turkey. Arena is a broad line distributor with an impressive bouquet of global brands in their portfolio. This investment is expected to enhance your company's overseas presence and will be value accretive for the company's shareholders. We are happy to share that post the investment, our Dell tie-up in MEA got extended to Turkey also.

Your company's MEA subsidiary distributes 27 global brands with in-country operations in 14 countries and addresses 22 markets. Amongst some new tie-ups are Sony for some markets in Africa and ASUS for the Gulf region. The subsidiary helps your company build a commanding presence in the distribution space in new markets as well as hold a strong representation for new brands in existing markets.

Particulars of Subsidiary Companies

The Ministry of Corporate Affairs, Government of India, vide their General Circular No: 2 /2011 dated February 8, 2011 granted general exemption from annexing the accounts of the subsidiary companies with the accounts of the Company.

The detailed annual accounts of the Company and its subsidiaries are available to the shareholders of the Company requiring such information on any working day at the Registered Offi ce of the Company. The annual accounts of the subsidiary companies are also available at the Registered Offi ce of the respective subsidiary companies.

Credit Rating

Your Company's financial discipline and fiscal prudence is refl ected in the strong credit ratings ascribed by India's leading credit rating agencies, viz. CRISIL, a Standard and Poor's company and ICRA, an associate of Moody's Investors Services.

CRISIL has upgraded its ratings on the long term bank facilities of your Company to 'AA-/Stable' (read as double A minus) from 'A / Stable' (read as A plus) and reaffi rmed its rating on the short-term bank facilities and short term debt program at 'P1 ' (read as P one plus). ICRA has also upgraded its ratings for the Fund based and Non-fund based credit facilities to 'LAA-' (read as L double A minus) from 'LA ' ( read as LA plus) and reaffi rmed its rating on the short term debts at 'A1 ' (read as A one plus).

Employee Stock Option Plan 2008

With an intention of retaining the talent pool, your Company decided to give Stock Options to the Employees and has granted 23,35,973 options. No fresh ESOP options were issued during the financial year ended March 31, 2011.

Details of the options granted and options in force as required to be disclosed under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 and are set out in Annexure "A" of this Report.

During the year under review, pursuant to the exercise of options under Employee Stock Option Scheme, 2008, the Share capital of the Company has increased to Rs. 7926.60 Lacs from Rs. 7863.60 Lacs and the Share Premium Account has also increased to Rs.34,489.26 Lacs from Rs. 33,726.64 Lacs.

Additional Information relating to Conservation of Energy, Technology Absorption and Expenditure in R & D

As your Company is not engaged in manufacturing activities, the reporting requirement on these matters is not applicable.

Utilization of the Initial Public Issue Proceeds

In the financial year 2006-07, your Company went to the Indian capital market with an Initial Public Offer (IPO) and mobilized funds (net of issue expenses) aggregating to Rs. 138.99 Crore for meeting its various objectives, which included setting up of Automated Distribution Centres in four Metros in India and one in Dubai. Your Company in the Financial Year under review has completed spending the unutilized money for the objectives stated in the Prospectus.

Shares in Demat Suspense Account

Post IPO in January 2007 the shares were credited to the shareholders demat account through corporate action. Out of the data submitted for credit of shares through electronic mode, certain shares could not be credited to the respective demat accounts due to "Invalid Client Status". Your company sent frequent reminders to the allottees and as a result of constant follow up, your Company was able to credit all the shares in the suspense account to the respective allottees' account after proper verifi cation of the identity of the allottee. At present there are no shares in the Demat suspense Account and the account will be closed shortly.

Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Mr. N. Srinivasan and Mr. Tu, Shu-Chyuan, Directors would retire by rotation at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment.

At the Annual General Meeting held on July 24, 2009, Mr. M. Raghunandan was re-appointed as the Whole-time Director of your Company for a period of two years from March 1, 2009. The tenure of his appointment as Whole-time Director ended on February 28, 2011. Mr. M. Raghunandan, has been re-appointed as Whole-time Director of the Company by the Board of Directors subject to the approval of members at the ensuing Annual General Meeting for a period of two years with effect from March 1, 2011.

The tenure of appointment of Mr. R. Srinivasan as Managing Director ends on June 30, 2011. The Board of Directors at their meeting held on May 19, 2011 have re-appointed Mr. R. Srinivasan as Managing Director for a period of fi ve years with effect from July 1, 2011 subject to the approval of shareholders in the ensuing Annual General Meeting and the approval of the Central Government.

Director's Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confi rm:

a. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

b. that appropriate accounting policies have been selected and applied consistently, and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2011 and of the Profit for the said year;

c. that proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d. that the annual accounts have been prepared on a going concern basis.

Corporate Governance

Our governance practices are described separately in this annual report. We have obtained a certifi cation from our Statutory Auditors on our compliance with clause 49 of the listing agreement with Indian Stock Exchanges. This certifi cate also forms part of our Annual Report.

Sub Division of Shares

For enhancing the liquidity of the shares of your Company in the market, the Board of Directors approved sub-division of shares at their Board Meeting held on May 21, 2010. Members approval was obtained at the Annual General Meeting held on July 20, 2010 for this purpose. The record date was fi xed as August 23, 2010 and subsequently the shares of face value of Rs. 10/- each were sub-divided into fi ve Equity Shares of face value of Rs. 2/- each. Post sub- division of shares, the liquidity of trading of the shares improved and the total traded quantity in the Stock Exchanges increased.

Increase in FII's, NRI's, and PIO's Limit under Portfolio Investment Scheme

For the purpose of enabling Foreign Institutional Investors to invest in your Company, the Board of Directors enhanced the investment limit of Foreign Institutional Investors (FIIs) up to 100% and Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) up to 24% on the paid up share capital of the Company under the portfolio scheme. For this purpose, the Members' approval was sought through Postal Ballot and the resolution was approved with requisite majority. It enabled your Company to ensure that the investments by the FIIs, NRIs, and PIOs are as per the RBI's regulatory requirements.

Particulars of Employees

The recent circular from the Ministry of Corporate Affairs (MCA) enhanced the amount of remuneration required to be disclosed under section 217 (2A) from Rs. 24 Lakhs per annum to Rs. 60 Lakhs per annum. Likewise, the monthly limit has been enhanced from Rs. 2 Lakhs to Rs. 5 Lakhs for part of the year of employment.

In terms of Section 219(1)(b)(iv) of the Act, the Directors Report is being sent to the Members excluding the information required under Section 217(2A) of the Companies Act, 1956 and the Rules there under.For the financial years under review none of the employees fall under the revised ceiling limits.

Auditors

The Statutory Auditors of your Company, M/s Deloitte Haskins & Sells (DHS) retire at the ensuing Annual General Meeting and have confi rmed their eligibility under Section 224(1B) of the Companies Act 1956 and willingness to accept offi ce, if re-appointed. The proposal for their re-appointment is included in the notice for Annual General Meeting sent herewith.

Foreign Exhange

Your Company's earnings / outgo in foreign currencies are outlined in the notes to the Annual Accounts.

Acknowledgements

The significant growth in revenue refl ects the increased number of transactions being handled. The higher volume has resulted in many complex and time and resource consuming commitments throughout the supply chain comprising of import clearance, warehousing and delivery services. Your Company's strong warehouse infrastructure, back-end support, processes and IT system helped weather the challenges and support the overall business growth.

Your Directors wish to convey their appreciation to all the employees of the Company and its subsidiaries and step down subsidiaries for their collective contribution to the Company's performance. Their dedication and competence has ensured that the Company continues to be a significant and leading player in the distribution industry.

Your Directors also take this opportunity to thank its customers, shareholders, suppliers, bankers, business partners, financial institutions and all other business associates for the on-going support and the encouragement given by them to the Company.

On behalf of the Board of Directors

Place : Chennai J. Ramachandran

Date : May 19, 2011 Chairman


Mar 31, 2010

The Directors are delighted to present their Seventeenth Annual Report on the business and operations of the Company along with the abridged standalone and consolidated accounts for the year ended March 31,2010. Copies of the unabridged accounts are available on written request to the Company Secretary at the Registered Office and at the venue of the Annual General Meeting.

Financial Highlights (Rs. In Crore)

Particulars Consolidated Standalone 2009-10 2008-09 2009-10 2008-09

Net Sales/Income from operations 13757.75 12668.27 6449.61 6066.16

Other Income 20.90 14.82 10.27 5.28

Total Revenue 13778.65 12683.09 6459.88 6071.44 Total Expenditure

a) Cost of goods sold 13033.14 12005.69 6085.26 5720.55

b) Trading Expenditure 34.93 32.48 19.55 17.43

c) Staff Cost 165.50 150.27 79.78 75.81

d) Other Expenditure 179.36 165.08 73.69 83.78

Profit before Interest, Depreciation and Tax (EBIDTA) 365.72 329.57 201.60 173.87

Interest 66.37 97.82 33.04 44.91 Depreciation 23.43 12.73 15.40 4.71 Profit before Tax (PBT) 275.92 219.02 153.16 124.25 Provision for Taxation 63.90 49.98 53.70 43.56 Profit after Tax (PAT) 212.02 169.04 99.46 80.69 Minority Interest 27.69 9.38 NIL NIL Net Profit for the year 184.33 159.66 99.46 80.69

During the year under review, there has been a moderate growth in terms of turnover by 9%, EBIDTA by 11% and an interesting growth in PAT by 15% over the previous year on consolidated basis.

Your Directors have made the following appropriations out of the above profits:-

(Rs. in Crore)

Balance in Profit and Loss Account brought forward : 189.70

Less: Dividend for the year 2008-09 including Dividend Distribution Tax for additional equity shares allotted under the ESOP Scheme after the closure of the financial year 0.28 189.42

Add: Profit for the year 2009-10 99.46

Profit available for appropriation 288.88

Less: Proposed Dividend @ Rs.5/- per share ( i.e. 50%) for the year ended 31st March 2010 : 39.42

Dividend Distribution Tax thereon : 6.55

Transfer to General Reserve : 9.95 55.92

Balance in the Profit and Loss Account to be carried forward : 232.96

DIVIDEND

Considering your Companys financial performance, the Directors have recommended a dividend of Rs. 5/- per share (i.e. 50%) for the year under review as compared to Rs. 4/- per share (i.e.40%) in the previous year.

PERFORMANCE

FY10 was the 17th year of your Companys Indian operations and in all these 17 years the company has shown significant growth in revenue and profit year on year. The members would be happy to note that even in the difficult year under review, the growth was maintained.

The Consolidated revenue of your Company was Rs. 13,778.65 Crore as against Rs. 12,683.09 Crore in the previous year with a CAGR of 19% for five years. The Consolidated net profit for the year under review was Rs. 184.33 Crore as against Rs. 159.66 Crore in the previous year with a CAGR of 25% for the last five years.

The Stand alone revenue of your Company was Rs. 6,459.88 Crore as against Rs. 6,071.44 Crore in the previous year with a CAGR of 15% for five years and the profit after tax was Rs. 99.46 Crore as against Rs. 80.69 Crore in the previous year with CAGR of 36% for the last five years.

The Earnings Per Share (EPS) on consolidated basis (based on weighted average number of shares) increased to Rs. 23.51 in the year under review as compared to Rs. 20.50 in the previous year. EPS on standalone basis has increased to Rs. 12.68 from Rs. 10.36 in the previous year.

DISTRIBUTION BUSINESS

INFORMATION TECHNOLOGY PRODUCTS

Following the global meltdown, there was slowdown in the sale of IT products until the first half of the year under review. On the back of gradual recovery of business sentiments during the second half of the year under review, the sales growth picked up and enabled your Company to show positive growth for the full year.

Your Company has adopted various strategies to maintain its overall growth objectives by adding key vendors to its portfolio and intensifying its focus in tier II cities and towns setting the base for accelerated growth in the ensuing years.

The aggressive pace of both the Central and State Governments to drive their e-governance projects and increased budgetary allocation for the education and health sector is expected to stimulate, demand for IT products. Strong traction in desktop sales, continued consumer confidence and a revival in IT spend spurred personal computer (PC) sales during the January-March 2010 quarter, recording 33% year-on-year growth (IDC Research).

It is expected when most budget announcements are translated into actual expenditure, it would trigger huge demand for IT products. Your Company is poised to exploit all these opportunities to its advantage with a clear focus on growth areas.

Tie-up with key vendors to complement the product bouquet has always been an important growth strategy for your Company and last fiscal was significant from this point of view, with the addition of Oracle, D-Link, LG-Nortel, RSA Security, Iomega, Citrix, Lifesize Communications, NComputing, NetApp, Array Network, Ricoh and Fujitsu.

Your Companys overseas subsidiaries have signed new distribution contracts with vendors like Dell, Fujitsu and Lenovo in the Systems space for select countries in Middle East and Africa and also signed new contracts with vendors like Juniper Networks, Check point Software, Netgear, Coral Telecom, Ascom and Molex in the value added distribution space.

During the financial year under review, your Company has added more than 2,000 channel partners in India. As of 31st March 2010, your Company along with its subsidiaries has more than 75 brands, 23,600 channel partners, 78 warehouses and 68 sales offices.

NON-INFORMATION TECHNOLOGY PRODUCTS

In the NON-IT products space, your Company currently has presence in Digital Lifestyle, Telecom, Consumer Electronics and Digital Printing industry. Your Companys decision to venture into verticals other than IT products had enabled it to grow its revenue even during a difficult and challenging year. Today, your Company is a Supply Chain Solutions player for many products, though IT products currently constitute a major share to the Companys total revenue.

Digital Lifestyle Products

Until previous year, your Company was distributing products like Apple Mac Notebooks, Apple Ipods, Microsoft Xbox gaming consoles and gaming contents.

During the year under review, your Company has added Mapmylndias navigation devices & Jabras wireless telecom accessories. With the highway travel becoming increasingly popular in the country, Mapmylndias navigation GPS devices loaded with Indias best maps and satellite based voice guided navigation ensuring safe travel, would be in high demand in future.

Telecom

During the year under review, telecom products such as Blackberry smart phone in India and inclusion of more territories for distributing Nokia hand sets in Middle East and Africa, enabled the Company to sustain its growth strategy.

India is now the second largest mobile market in the world after China, with about 400 million mobile users. According to Cellular Operators Association of Indias (COAI) projection, there will be 1240 Million mobile users in 2015 - which means one phone for every Indian.

The demand for Blackberry Smartphones has been encouraging in the year under review. Your Companys strong relationship with large retail store customers has enabled it to show consistent monthly growth both in terms of units sold and sales revenue.

Your Company has recently tied up with LG electronics for distribution of their mobile phones in the Tamilnadu market. This gives us entry into the high growth mobile handset space.

Your Companys MEA operations have obtained a new distribution contract from Nokia for Ghana market. The volumes have been scaled up significantly in Nigeria and Kenya through better reach and coverage. Your Companys subsidiary, Redington Gulf FZE, has been honoured with the No.1 distributor position for Nokia products in Sub-Saharan Africa and has also been awarded the best distributor for Nokia products in East and West Africa.

Consumer Electronics

India, being a vast market with a strong consumer base and a growing interest in life-style products, the Company has extended its experience in distribution of technology products to Consumer Electronics products as well.

The sale of Consumer Electronics products has shown an increased growth percentage every year. When the Industry has grown by 15% during the year under review, compared to previous year, the revenue from sale of consumer electronics products to your Company has grown by 65%. This was possible with the immense support received from the trade partners and the vendors.

Within a short span from the start of consumer durable business your Company has expanded its branch network for sale of consumer electronics products to 14 cities with a market base of about 2,500 channel partners.

With an objective to become a one-stop shop for retailers, your Company has entered into partnerships with vendors like LG, Whirlpool, Godrej etc in the Consumer Electronics space.The addition of Godrej consumer appliances during this year under review is a welcome addition in this segment.

Digital Printing

In early 2005, your Company, joined hands with HP Indigo and started distribution and after sales service of Digital Printing machines. Currently your Company has about 80 HP Indigo printing machines operating in India in the Commercial and Industrial printing segments and continues to grow with printing turning Digital.

For short-run jobs, Digital Printing Machines are more cost effective compared to conventional offset printing machines, while providing much quicker "turn-around-time" for such jobs.

The unique establishment of Redingtons "HP Indigo Digital Press Demo Centre" and its "Indigo Training Facility" in Chennai demonstrates your Companys strong commitment to its customers in the graphic arts and digital publishing industry in India. The Demo centre is the fifth such centre for HP Indigo globally.

AFTER SALES SERVICES BUSINESS

Your Company enhanced its after sales service support from existing warranty and post warranty support for IT and Telecom products to pre-sale and post sale support for enterprise products. These services include pre sale technical support, design, installations, remote technical support and 24x7 on-site support. Your Company could carve out more business from existing customers and vendors by providing superior services and ensuring customer satisfaction. Your Company extended and strengthened its support network by adding more locations. Your Company delivers services to customers through 48 owned service centres (Previous Year - 43) and 220 partner service centres (Previous Year - 211) in India. In MEA markets, your Companys subsidiaries have 20 owned service centres (Previous Year 18) and 15 partner service centres (Previous Year 15).

Complementing the new initiative in the distribution space, your Companys service unit extended its support services to new telecommunication vendors as well. Today, Blackberry customers can avail services at 27 locations across the Country and efforts are on to extend these services from more locations. To provide a new experience to the customers of Blackberry smart phones, your Company is planning to invest in Blackberry exclusive service centres in large cities. One such centre is already operational at Chennai during the year under review.

Your Companys Service Division started their Remote Infrastructure Management Services from their new Network Operations Centre (NOC) at Chennai. Through this facility we can remotely manage services of our corporate customers using advanced technology. Your Company will extend this support to IT as well as Telecom enterprise customers.

Your Company also provides L1 ,L2,L3 and L4 services and offer warranty and post warranty repair support for Mobile Handsets(GSM and CDMA), Fixed Wireless Phones (FWP), Fixed Wireless Terminals (FWTs) and Personal Digital Assistant (PDA).

The Companys strong forward and reverse logistics capabilities enable spare parts to reach nook and corners of India on time and timely return of defective units to the supplier. Certification Body of TUV SUO Management Service GmbH has certified that your Companys After Sales Services has established and applied a Quality Management System for its services.

Your Companys overseas subsidiary in MEA has established 3 new service centers in that region. All these service centers in the region have been accredited ISO 9001:2008 quality rating. The subsidiary has been given "The Best After Sales Service Provider Award" by Value Added Reseller (VAR), a leading channel magazine in the Middle East.

SUPPLY CHAIN SOLUTIONS Automated Distribution Centre

The first ADC in Chennai has started operations effective last fiscal. In Dubai, the work on the state-of-the-art 100,000 sq ft ADC at Jebel Ali Free Zone is nearing completion and is expected to be operational by middle of the current year 2010-11. Your.Company has initiated steps to set-up an ADC in Kolkata and is expected to be operational by early part of 2011.

Commencing operations from these network of ADCs is expected to enhance productivity in throughput and enable tie-up for third party logistics services.

The transition to the new automated warehousing facility at Chennai has been smooth with zero variance in stocks and minimal loss of operations time.

Third Party Logistics (3PL) Services

The year under review was a challenging one for the 3PL business. Economic slow down resulted in reduced inventories and volume for the companies in various industries with a corresponding impact in 3PL operations. Many Corporates looked at cutting down supply chain related cost in order to maintain margins. The cost assumed higher importance than the quality of service and speed of delivery.

However, your Company was able to maintain an edge over competition to retain contracts with leading brands like Cadbury, Sonicwall, Vodafone and Kuehne+Nagel and established its presence in the market place. During the year under review, the Company signed up with IFB and Girias (Large Format Retailer) for 3PL services.

SUBSIDIARY COMPANIES

The Company has 29 subsidiary companies as on March 31, 2010.

During the year under review, your Companys Indian and Overseas direct and step down subsidiary companies have made excellent contribution to the consolidated revenue and earnings growth.

a. Indian Subsidiaries:

M/s. Easyaccess Financial Services Limited, a Non-Banking Finance Company which predominantly provides finance to your Companys Channel partners in the IT Distribution Industry, commenced undertaking a significant factoring business for non-Redington related customers widening its horizons and reach as a good value proposition initiative.

Your Company has increased its investment in this wholly owned subsidiary from Rs. 83 Crore to Rs. 221 Crore during the year under review in order to comply with the minimum capitalisation requirement prescribed in Foreign Direct Investment (FDI) guidelines. Under FDI guidelines, it is mandatory for an FDI company to invest a minimum of USD 50 Million in its wholly-owned NBFC before completion of two years from the start of NBFC operations.

The company has shown an excellent growth of 83% by earning post tax profits of Rs. 12.90 Crore during 2009-10 (previous year post tax profits Rs. 7.03 Crore) and is showing great potential going forward.

M/s. Nook Micro Distribution Limited has changed its name from M/s.Nook Holdings Limited in line with the object of the company to engage in Micro Distribution of IT and Non-IT products in smaller cities and towns.

b. Overseas Subsidiaries:

Your Companys step down subsidiary M/s. Redington Gulf FZE incorporated three subsidiaries viz. M/s. Redington Morocco Ltd, Morocco, M/s. Redington Tanzania Ltd, Tanzania and M/s. Cadensworth UAE LLC, Dubai, UAE. Your Companys wholly owned subsidiary in Singapore, M/s. Redington Distribution Pte Ltd., has incorporated a subsidiary in Srilanka in the name of M/s. Redington (SL) Private Ltd.

Your Companys overseas operations, which are being carried out by the subsidiary companies, are in tune with their business plans and they have enabled your Company to continue with its growth momentum.

As required under the Listing agreement with the Stock Exchanges, the Company has prepared the Consolidated Financial Statements, according to the applicable Indian Accounting Standards. Your Company provides the consolidated financial statements alongwith the standalone financial statements to the investors.

An application made by the Company under Section 212(8) of the Companies Act, 1956, to the Central Government for exempting the Company from attaching a copy of the Balance Sheet and the Profit and Loss Account of the subsidiary companies and other documents to be attached under Section 212(1) of the Act to the Annual Report of the Company. A statement containing salient financial figures of the subsidiary companies is contained in the report.

CREDIT RATING

Your Company continues to enjoy the highest rating P1 + (read as P one plus) and A1 + (read as A one plus) for short term borrowings from CRISIL and ICRA (Credit Rating Agencies) respectively for Rs. 600 Crore, indicating very strong financial position. As part of the rating requirements under the Basel II norms for working capital facilities from banks, your company is rated P1 + and A+/Stable by CRISIL and A1 + and LA+ from ICRA for its short term debt instruments and cash credit facilities respectively.

EMPLOYEE STOCK OPTION PLAN 2008

With an objective to attract and retain talent, your Company instituted an Employee Stock Option Plan in February 2008 and granted 23,35,973 options to the employees of the Company and its subsidiaries. The details of the options granted under Redington (India) Limited - Employee Stock Option Plan - 2008 are given in Annexure - A.

ADDITIONAL INFORMATION RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND EXPENDITURE IN R & D

As your Company is not engaged in manufacturing activities, the reporting requirement on these matters is not applicable.

UTILIZATION OF THE INITIAL PUBLIC ISSUE PROCEEDS

In the financial year 2006-07, your Company went to the Indian capital market with an Initial Public Offer (IPO) and mobilized funds (net of issue expenses) aggregating to Rs. 138.99 Crore for meeting its various objectives, which includes setting up Automated Distribution Centres and High Level Repair Centres.

A sum of Rs. 132.46 Crore has so far been utilized for the objectives stated in the offer document and the balance amount is expected to be deployed within the next two years, for which the Company is approaching the shareholders for approving the extension of time.

SHARES IN DEMAT SUSPENSE ACCOUNT:

During the Companys Initial Public Offer, 120 shares allotted to two shareholders, inter alia, got rejected by the Depositories due to want of sufficient/ correct information. These shares are lying unclaimed by the shareholders and kept in a Demat Suspense Account maintained with a Depository Participant. The Company has been making efforts to get the details from the investors and credit these shares to their accounts.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of your Company, Prof. J. Ramachandran and Mr. William Adamopoulos, Directors would retire by rotation as Directors at the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm:

a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b. that appropriate accounting policies have been selected and applied consistently, and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March 2010 and of the profit of your Company for the said year;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d. that the annual accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCE

A separate section on Corporate Governance forming part of the Directors Report and the certificate from the Companys auditors confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Indian Stock Exchanges is included in the Annual Report.

PARTICULARS OF EMPLOYEES

As per the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to all the members excluding the statements of particulars under section 217(2A). Any member interested in obtaining a copy of the statement may write to the company.

AUDITORS

M/s Deloitte Haskins & Sells (DHS), who are the Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting. It is proposed to re-appoint them for the Financial Year 2010-11. Deloitte Haskins & Sells have, under Section 224(1 )(B) of the Companies Act, 1956, furnished a certificate of their eligibility for re-appointment and also a confirmation that they have been peer reviewed by the Institute of Chartered Accountants of India.

FOREIGN EXCHANGE

Your Companys earnings / outgo in foreign currencies are outlined in the notes to the Annual Accounts.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all the employees of the Company and its subsidiaries and step down subsidiaries for their collective contribution to the Companys performance. The Directors would also like to thank the employees, shareholders, customers, channel partners, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company.

On behalf of the Board of Directors

Place: Chennai J. Ramachandran

Date : May 21, 2010 Chairman

Find IFSC