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Notes to Accounts of D-Link (India) Ltd.

Mar 31, 2015

1. Background of the Company

D-Link (India) Limited (the Company) is a subsidiary of D-Link Holding Mauritius Inc. and is a part of D-Link Corporation, Taiwan. The Company is primarily engaged in marketing and distribution of D-Link branded Networking products in India and neighbouring countries. The Company operates through a distribution network with a wide range of product portfolio and solutions with a nationwide reach across India.

2. Rights, preferences and restrictions attached to each class of shares

The Company has only one class of Equity shares having a par value of Rs. 2/- per share. Each holder of Equity shares is entitled to one vote per share and each Equity share carries an equal right to dividend and in case of repayment of capital. Further, 5,500,000 Equity shares issued during the year on preferential allotment basis are subject to a lock-in-period of one year, i.e., up to 28th July, 2015

3. Contingent liabilities

Contingent liabilities, in respect of Custom duty paid under protest. The same is included under "customs duties recoverable" in note no.14 pending resolution of the dispute. 6,312,963 6,312,963

The trading material/software imported are subjected to different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted for certain items and has demanded additional duty for the same. The differential duty has been paid under protest. The matter is pending with Central Excise and Service Tax Appellate Tribunal for hearing.

Disputed demand from commercial tax officer Margao, Government of Goa, towards value added tax (VAT) / central sales tax (CST) 10,435,455 10,435,455

The Company had filed appeal against the assessment order dated 22nd March, 2013 before the Addl. Commissioner of Commercial Taxes, Panaji- Goa requesting for Stay of the recovery of disputed amount of tax, demanded for the Assessment Year 2009-10. The Company is awaiting personal hearing from the Addl. Commissioner of Commercial Taxes.

b) In addition to the above, the company has disputed the demands from the commercial tax office Margao, Government of Goa towards VAT / CST, mainly relating to 'C' forms from customers, aggregating Rs. 4,237,323 (Previous year Rs.2,484,009), including interest aggregating Rs. 1,528,525 (Previous year Rs. 730,742). The Company, out of abundant caution has provided for the aforesaid demands (Refer note 10), but is pursuing the matter in appeal with the authorities and is hopeful of succeding in the appeal.

4. The Company enters into foreign exchange forward contracts to offset the foreign currency risk arising from the amounts denominated in currencies other than the Indian rupee. The counter party to the Company's foreign currency forward contracts is generally a bank. These contracts are entered into to hedge the foreign currency risks of firm commitments.

5. The contributions expected to be made by the Company during the financial year 2015-16 is Rs. 4,954,356/-.

The plan assets are managed by the Gratuity trust formed by the Company. The funds are held in the Bank Account of the gratuity trust as on March 31, 2015.

Subsiquently the funds are invested in "Bajaj Allianz group debt fund" managed by Bajaj Allianz Life Insurance Company.

B The disclosure as required under AS-15 regarding the Company's defined contribution plans is as follows : i) Contribution to provident fund Rs. 4,192,714/-. (Previous year Rs.1,589,543/-)

6. Lease transactions

Operating leases

The company has taken premises on cancellable operating lease basis. The tenure of the agreement ranges from 33/60 months. There are no renewal or purchase options and escalation clauses in these agreements.

The lease rentals for the year charged to revenue are Rs. 30,964,350/- (Previous year Rs. 19,803,302/-)

a) Name of related parties where control exists

D-Link Holding Mauritius Inc. Holding Company

D-Link Corporation, Taiwan Ultimate Holding Company

TeamF1 Networks Private Limited Subsidiary Company (w.e.f. 29th May 2014)

b) List of related parties with whom transactions have taken place during the year and nature of relationship

Name of the related parties Nature of relationship

D-Link Corporation Ultimate Holding Company

D-Link (Europe) Ltd Fellow Subsidiary

D-Link International (Singapore) Fellow Subsidiary

D-Link Canada Inc. Fellow Subsidiary

D-Link Middle East - FZCO Fellow Subsidiary

D-Link Japan K K (DJP) Fellow Subsidiary

D-Link International Pte. Ltd Fellow Subsidiary

D-Link Latin America Fellow Subsidiary

D-Link Brasil LTDA Fellow Subsidiary

D-Link Australia Pty Limited Fellow Subsidiary

D-Link Latin America - DLABR Fellow Subsidiary

TeamF1 Networks Private Limited Subsidiary Company (w.e.f. 29th May 2014)

Mr. Yao Chuan Yang (Gary Yang) Key management person

Mr. Chandrashekhar M. Gaonkar Key management person (upto 23rd August 2014)

Mr. Tushar Sighat Key management person (w.e.f. 30th September 2014)

7. Segment information

(A) Segment information for primary reporting (by business segment)

The Company has its operations in marketing and distribution of networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEM's) and System Integrators (SI). The primary reporting segment for the Company, therefore, is the business segment, viz., networking products.

(B) Segment information for secondary segment reporting (by geographical segments)

The secondary reporting segment for the Company is the geographical segment based on location of customers, which is as follows:

i) Domestic

ii) Export

Cash Credit accounts with banks are secured by charge ranking pari passu, by way of hypothecation of stock and book debts both present and future.

8. During the year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from 1st April 2014, the Company revised the estimated useful life of its assets to align the useful life with those specified in Schedule II. Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on 1st April, 2014, and has adjusted an amount of Rs. 620,828/- (net of deferred tax of Rs. 319,678/-) against the opening Surplus balance in the Statement of Profit and Loss. The depreciation expense in the Statement of Profit and Loss for the year is lower by Rs. 1,246,504/- and profit for the year is higher by the like amount consequent to the change in the useful life .

9. As per the provisions of section 135 of the Companies Act, 2013, the company is required to spend Rs. 3,201,047/- towards Corporate Social Responsibility (CSR) activities. The Company has not spent any amount during the year and intends to do so in coming financial years in line with the CSR policy of the company.

10. During the year, the Company has changed its leave encashment policy, reducing the maximum leave accumulation per employee from 45 days to 10 days. As a result of this change, there is a reduction in the amount of provision required for leave encashment as at the year end. Accordingly, employee benefits expense for the year ended 31st March 2015 is lower by Rs. 13,763,156/- and the profit before tax for the year is higher by a like amount.

11. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification.


Mar 31, 2014

For the year ended For the year ended 31st March, 2014 31st March, 2013

Note 1: Contingent liabilities

Contingent liabilities, in respect of Custom duty paid under protest. The same is included

under customs duties recoverableow in note no.12 pending resolution of the dispute. 6,312,963 6,312,963

The trading material/software imported are subjected to different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted for certain items and has demanded additional duty for the same. The differential duty has been paid under protest. The matter is pending with CESTAT for hearing.

Disputed demand from commercial tax officer Margao, Government of Goa, towards value added tax (VAT)/central sales tax (CST). 10,435,455 10,435,455

The Company had filed appeal against the assessment order dated March 22, 2013 before the Addl. Commissioner of Commercial Taxes, Panaji - Goa requesting for Stay of the recovery of disputed amount of tax, demanded for the Assessment Year 2009-10. The Company is awaiting for personal hearing from the Addl. Commissioner of Commercial Taxes.

Note 2:

a) The Company enters into foreign exchange forward contracts to offset the foreign currency risk arising from the amounts denominated in currencies other than the Indian rupee. The counter party to the Company''s foreign currency forward contracts is generally a bank. These contracts are entered into to hedge the foreign currency risks of firm commitments.

VI. The assumptions of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment.

VII. The contributions expected to be made by the Company during the financial year 2014-15 is Rs.739,240/-.

The plan assets are managed by the Gratuity trust formed by the Company. The funds are invested in "Bajaj Allianz group debt fund" managed by Bajaj Allianz Life Insurance Company.

B The disclosure as required under AS-15 regarding the Company''s defined contribution plans is as follows : i) Contribution to provident fund Rs.1,589,543/-.( Previous year Rs.1,108,216/-)

Note 3: Lease transactions

Operating leases

The company has taken premises on cancellable operating lease basis. The tenure of the agreement ranges from 33/60 months. There are no renewal or purchase options and escalation clauses in these agreements. The lease rentals for the year charged to revenue are Rs.19,803,302/- (Previous year Rs.17,453,101/-)

Note 4: Segment information

(A) Segment information for primary reporting (by business segment)

The Company has its operations in marketing and distribution of networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEM''s) and System Integrators (SI). The primary reporting segment for the Company, therefore, is the business segment, viz., networking products.

(B) Segment information for secondary segment reporting (by geographical segments)

The secondary reporting segment for the Company is the geographical segment based on location of customers, which is as follows: i) Domestic ii) Export

Note 5:

The Shareholders have, in the Extraordinary General Meeting held on 20th January, 2014, approved the following:

i) Issue of 5,500,000 Equity shares of the Company to the shareholders and promoters of TeamF1 Networks Private Limited (TeamF1) on preferential allotment basis for consideration other than cash (share swap of 10,499 shares held by them in TeamF1) towards acquisition preferential allotment basis for consideration other than cash (share swap of 10,499 shares held by them in TeamF1) towards acquisition of TeamF1 by the Company;

ii) Raising of funds by way of issue of Equity shares for cash not exceeding Rs.600,000,000 on Rights basis.

Note 6:

Prepaid expenses includes an amount of Rs.2,106,750/- paid to consultants as legal and professional charges in relation to the proposed issue of rights shares and shares on preferential allotment basis and will be set off against share premium.

Note 7:

Cash Credit accounts with banks are secured by charge ranking pari passu, by way of hypothecation of stock and book debts both present and future.

Note 8:

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification.


Mar 31, 2013

Note 1: Background of the Company

D-Link (India) Limited (the ''Company'') is a subsidiary of D-Link Holding Mauritius Inc. and is a part of D-Link Corporation, Taiwan. The Company is engaged in Marketing and Distribution of D-Link branded Networking products in India and SAARC Countries. The Company operates through a distribution network with a wide range of products portfolio and solutions with a nationwide reach across India.

Note 2: Contingent liabilities

Contingent liabilities, in respect of Custom duty paid under protest.

The trading material/software imported are subjected to different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted for certain items and has demanded additional duty for the same. The differential duty has been paid under protest. The matter is pending with CESTAT for hearing.

Disputed demand from commercial tax officer Margao, Government of Goa, towards value added tax ( VAT ) / central sales tax (CST)

The Company is in the process of filing an appeal against the demand and is confident of defending the claim for input tax credit / lower charge of CST against ''C'' forms.

Note 3:

a) The Company enters into foreign exchange forward contracts to offset the foreign currency risk arising from the amounts denominated in currencies other than the Indian rupee. The counter party to the Company''s foreign currency forward contracts is generally a bank. These contracts are entered into to hedge the foreign currency risks of firm commitments.

Note 4: Lease transactions

Operating leases

The company has taken premises/vehicles on cancellable operating lease basis. The tenure of the agreement ranges from 33/60 months. There are no renewal or purchase options and escalation clauses in these agreements.

The lease rentals for the year charged to revenue are Rs.17,453,101/- (Previous year Rs. 16,824,404/-)

Note 5: Related party disclosures

a) Name of related parties where control exists

D-Link Holding Mauritius Inc. Holding Company

D-Link Corporation, Taiwan Ultimate Holding Company

Note 6: Segment information

(A) Segment information for primary reporting (by business segment)

The Company has its operations in marketing and distribution of networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEM''s) and System Integrators (SI). The primary reporting segment for the Company, therefore, is the business segment, viz., networking products.

(B) Segment information for secondary segment reporting (by geographical segments)

The secondary reporting segment for the Company is the geographical segment based on location of customers, which is as follows: i) Domestic ii) Export

Other than the above, the Company has not remitted any amount in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividend have been made by non-resident shareholders.

Note 7:

As per information available with the Company, none of the creditors have confirmed that they are registered under the Micro, Small and Medium enterprises Development Act, 2006. Accordingly, disclosure as required by the said Act is made on that basis.

Note 8:

Cash Credit accounts with banks are secured by a charge ranking pari passu, by way of hypothecation of stock and book debts, both present and future.

Note 9:

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification.


Mar 31, 2012

Note 1: Background of the Company

D-Link (India) Limited (the 'Company') is a subsidiary of D-Link Holding Mauritius Inc. and is a part of D-Link Corporation, Taiwan. The Company is engaged in Marketing and Distribution of D-Link branded Networking products in India and SAARC Countries. The Company operates through a distribution network with a wide range of products portfolio and solutions with a nationwide reach across India.

Note 2: Contingent liabilities and commitments (to the extent not provided for)

Contingent Liabilities

Contingent liabilities, in respect of Custom duty paid under protest.

The same is included under "customs and other duties recoverable",

pending resolution of the dispute. 6,312,963 6,312,963

The trading material/software imported are subjected to different rates of customs duty based on classification under respective Tariff Head.

The Customs department has objected to the classifications adopted for certain items and has demanded additional duty for the same. The differential duty has been paid under protest.

VII The contributions expected to be made by the Company during the financial year 2012-13 is Rs. 1,000,000/-.

The plan assets are managed by the Gratuity trust formed by the Company. The management of funds is entrusted with MetLife India Insurance Co. Ltd. The details of investments made by them are not available.

B The disclosure as required under AS-15 regarding the Company's defined contribution plans is as follows:

i) Contribution to provident fund Rs.1,116,859/-. (Previous year Rs.1,189,412/-)

Note 3: Lease transactions

Operating leases

The company has taken premises / vehicles on cancellable operating lease basis. The tenure of the agreement ranges from 33/60 months. There are no renewal or purchase options and escalation clauses in these agreements.

The lease rentals for the year charged to revenue are Rs.16,824,404/- (Previous year Rs. 21,626,380/-)

Note 4: Related party disclosures

a) Name of related parties where control exists

D-Link Holding Mauritius Inc. Holding Company

D-Link Corporation, Taiwan Ultimate Holding Company

Note 5: Segment information

(A) Segment information for primary reporting (by business segment)

The Company has its operations in marketing and distributing networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEM's) and System Integrators (SI). The primary reporting segment for the Company, therefore, is the business segment, viz., networking products.

(B) Segment information for secondary segment reporting (by geographical segments)

The secondary reporting segment for the Company is the geographical segment based on location of customers, which is as follows:

i) Domestic

ii) Export

Note 6:

As per information available with the Company, none of the creditors have confirmed that they are registered under the Micro, Small and Medium enterprises Development Act, 2006. Accordingly, disclosure as required by the said Act is made on that basis.

Note 7:

During the previous year, the Company had changed the policy for providing for slow moving and obsolete inventory having regard to the nature of items in inventory and movements thereof by rationalising the criterias for provision which is based on ageing, saleability, actual sales etc. As a result of this change, the provision for the previous year was lower by Rs. 8,333,683/- and the profit was higher by the like amount.

Note 8:

Cash Credit account with the bank is secured by hypothecation of stock and book debts both present and future.

Note 9:

Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification in line with the Revised Schedule VI to the Companies Act, 1956.


Mar 31, 2011

As at As at

31st March, 2011 31st March, 2010

Rupees Rupees

1 Contingent liabilities, in respect of Custom duty paid under protest.

The same is included under advances recoverable in cash or in kind in Schedule 8 pending resolution of the dispute. 6,312,963 6,312,963

The trading material/software imported are subjected to different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted for certain items and has demanded additional duty for the same. The differential duty has been paid under protest.

During the previous year, the company had agreed to the classification done by the customs department and had withdrawn the protest with respect to one of the products as a result of which an amount of Rs. 4,424,173/- had been debited to Profit and Loss Account of the previous year.

2 The Company has obtained the approval of the shareholders through voting by postal ballot dated 28th October 2010 in terms of provisions of Section 192A of the Companies Act, 1956 read with the provisions of Companies (Passing of Resolutions by Postal Ballot) Rules, 2001, to amend/alter the main object clause of the Memorandum of Association of the Company for trading in "passive networking copper and fiber structured cabling products". Accordingly, the Company is now trading in passive networking copper and fiber structured cabling products.

VII The contributions expected to be made by the Company during the financial year 2011-12 have not been ascertained.

The plan assets are managed by the Gratuity trust formed by the Company. The management of funds is entrusted with MetLife India Insurance Co. Ltd. The details of investments made by them are not available.

VIII The disclosure as required under AS-15 regarding the Companys defined contribution plans is as follows :

i) Contribution to provident fund Rs.1,189,412/-. ( Previous year Rs.1,089,167/-)

3 As per information available with the Company, none of the creditors have confirmed that they are registered under the Micro, Small and Medium enterprises Development Act, 2006. Accordingly, disclosure as required by the said Act is made on that basis.

4 Lease transactions Operating leases

The company has taken premises/vehicles on cancellable operating lease basis. The tenure of the agreement ranges from 33/60 months. There are no renewal or purchase options and escalation clauses in these agreements. The lease rentals for the year charged to revenue are Rs.21,626,380/- (Previous period Rs.23,493,427/-)

5 Related party disclosures

Name of related parties where control exists

D-Link Holding Mauritius Inc. Holding Company

D-Link Corporation, Taiwan Ultimate Holding Company

List of related parties with whom transactions have taken place during the year and nature of relationship

Name of the related parties Nature of relationship

D-Link Corporation Ultimate Holding Company

D-Link (Europe) Ltd Fellow Subsidiary

D-Link International (Singapore) Fellow Subsidiary

D-Link International (Hong Kong) Fellow Subsidiary

D-Link Middle East-FZCO Fellow Subsidiary

D-Link Japan K K (DJP) Fellow Subsidiary

D-Link International Pte. Ltd Fellow Subsidiary

D-Link Latin America Fellow Subsidiary

D-Link Systems, Inc Fellow Subsidiary

Smartlink Network Systems Limited Enterprise over which key management person and

(previous year upto 15th July 2009) his relatives are able to exercise significant influence.

Mr. Yao Chuan Yang (Gary Yang) (From 15th July 2009) Key management person

Mr. Chandrashekhar M. Goankar (From 1st March, 2010) Key management person

Mr.Kamalaksha R.Naik (previous year upto 15th July 2009) Key management person

6 Segment information

(A) Segment information for primary reporting (by business segment)

The Company has its operations in marketing and distributing networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEMs) and System Integrators (SI). The primary reporting segment for the Company, therefore, is the business segment, viz., networking products.

(B) Segment information for secondary segment reporting (by geographical segments)

The secondary reporting segment for the Company is the geographical segment based on location of customers, which is as follows:

i) Domestic

ii) Export

7 Cash Credit account with the bank is secured by hypothecation of stock and book debts both present and future.

8 During the year, the Company has changed the policy for providing for slow moving and obsolete inventory having regard to the nature of items in inventory and movements thereof by rationalising the criterias for provision which is based of ageing,saleability,actual sales, etc. As a result of this change, the provision for the year is lower by Rs.8,333,683/- and the profit for the year is higher by the like amount.

9 Previous years figures have been regrouped , wherever necessary, to conform to the classification of the current year.


Mar 31, 2010

Contingent Liability

These, if any, are disclosed in the notes on accounts. Provision is made in the accounts if it becomes probable that an out flow of resources embodying economic benefits will be required to settle the obligation.

As at 31st March,

Rupees Rupees

1 Estimated amount of contracts remaining to be executed on capital account and not provided for - 1,021,896

2 Contingent liabilities, in respect of Custom duty paid under protest.

The same is included under advances recoverable in cash or in kind in Schedule 8 pending resolution of the dispute. 6,312,963 10,737,136

The trading material/software imported are subjected to different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted for certain items and has demanded additional duty for the same. The differential duty has been paid under protest.

During the year, the company has agreed to the classification done by the customs department and have withdrawn the protest with respect to one of the products as a result of which an amount of Rs. 4,424,173/- (Previous period Nil) has been debited to Profit and Loss Account

3. The Company was incorporated on 26th May, 2008 with the object of carrying on the business of sales and marketing of active networking products.

Pursuant to the Scheme of Arrangement (Scheme) entered into by Smartlink Network Systems Limited (Smartlink) [formerly known as D-Link (India) Limited] with the Company, the Marketing Business of Smartlink, consisting of marketing and selling of "D-Link" branded active networking products etc. was transferred to the Company with effect from 1st April, 2008, the Appointed Date. In accordance with the Scheme, the relevant Assets, Liabilities and Reserves and Surplus were accounted in the books of the Company w.e.f 1st April 2008. The said Scheme, under section 391 to 394 of the Companies Act, 1956, had been approved by the Honble High Court of Judicature of Bombay at Goa, vide its Order dated 27th February, 2009.

The Scheme provided that it shall become effective upon satisfaction of the conditions set out in the Scheme therein, including receipt of necessary approvals from Government Authorities. Accordingly, upon receipt of the requisite approvals, as aforesaid, the Effective Date of the Scheme was 10th June, 2009.

The Scheme provided, inter alia, the transfer of the Marketing Business of Smartlink on a going concern basis to the Company in consideration for which, each shareholder of Smartlink whose name appeared in the Register of Members of Smartlink on the record date, shall receive one fully-paid Equity Share, of the face value Rs.2/- each in the Company aggregating to 30,004,850 Equity Shares of Rs.2/- each. The Company has completed the allotment of such shares on 26th June 2009.

As an integral part of the scheme, upon the effective date, the Authorised Share Capital of the Company was enhanced to Rs.70,000,000/- divided into 35,000,000 Equity Shares of Rs.2/- each.

As an integral part of the Scheme, upon the Effective Date, 250,000 Equity Shares of the face value Rs. 2/-aggregating to Rs.500,000/- held by the existing shareholders in the Company were extinguished and the amount paid thereon has been refunded to each of the said shareholders and the paid up Equity Share Capital of the Company was reduced accordingly. The reduction of Share Capital was undertaken in accordance with provisions of Sections 100 to 103 of the Act and the Order of the High Court sanctioning the Scheme was deemed to be also the Order under Section 102 of the Act for the purpose of confirming the reduction.

Smartlink carried on the business of the Company for the period from the Appointed Date to the Effective Date, in trust as per the requirements of the Scheme.

The Scheme further provided that, as an integral part of the Scheme, the foreign promoters of Smartlink viz. D-Link Holding Mauritius Inc. shall swap 7,216,166 Equity Shares of Rs. 2/- each in the Company held by Mr. K. R. Naik and his family members, the Indian promoters of Smartlink, in exchange for: (I) 10,898,497 Equity shares of Rs. 2/- each held by D- Link Holding Mauritius Inc. in Smartlink; and (ii) the payment of an additional cash consideration of USD 5,000,000 by D- Link Holding Mauritius to Mr. K. R. Naik and his family members.

The Share exchange as contemplated in the Scheme has been completed on 7th July 2009, as a result of which the Company has become a subsidiary of D-Link Holding Mauritius Inc.

VII The contributions expected to be made by the Company during the financial year 2010-11 have not been ascertained.

The plan assets are managed by the Gratuity trust formed by the Company. The management of funds is entrusted with MetLife India Insurance Co.Ltd. The details of investments made by them are not available.

VIII The disclosure as required under AS-15 regarding the Companys defined contribution plans is as follows : i) Contribution to provident fund Rs.l,089,167/-.( Previous period Rs.857,199/-)

4 As per information available with the Company, none of the creditors have confirmed that they are registered under the Micro, Small and Medium enterprises Development Act, 2006. Accordingly, disclosure as required by the said Act is made on that basis.

5 Lease transactions

Operating leases

The company has taken premises / vehicles on cancellable operating lease basis. The tenure of the agreement ranges from 33/60 months. There are no renewal or purchase options and escalation clauses in these agreements.

The lease rentals for the period charged to revenue are Rs. 23,493,427/- (Previous period Rs.222,780/-)

6 Related party disclosures

Name of related parties where control exists

D-Link Holding Mauritius Ltd Holding Company

D-Link Corporation.Taiwan Ultimate Holding Company

List of related parties with whom transactions have taken place during the period and nature of relationship

Name of the related parties

D-Link Corporation

D-Link International (Singapore)

D-Link Middle East-FZCO

D-Link Latin America

Nature of relationship

Ultimate Holding Company

Fellow Subsidiary

Fellow Subsidiary

Fellow Subsidiary

Name of the related parties

D-Link (Europe) Ltd

D-Link International (Hong Kong)

D-Link International Pte.Ltd

D-Link Systems, Inc

Nature of relationship

Fellow Subsidiary

Fellow Subsidiary

Fellow Subsidiary

Fellow Subsidiary

Smartlink Network Systems Limited ( Formerly known as D-Link (India) Ltd.) ( Upto 15th July 2009 )

Mr. Yao Chuan Yang (Gary Yang) (From 15th July 2009 ) Mr. Chandrashekhar M. Goankar (From 1st March, 2010) Mr. Kamalaksha R. Naik ( Upto 15th July 2009 ) Mr. Jangoo Dalai ( Upto 30th March 2009 )

Enterprise over which key management person and his relatives are able to exercise significant influence.

Key management person

Key management person

Key management person

Key management person

7 Segment information

(A) Segment information for primary reporting (by business segment)

The Company has its operations in marketing and distributing networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEMs) and System Integrators (SI). The primary reporting segment for the Company, therefore, is the business segment, viz., networking products.

8 Cash Credit account with the bank is secured by hypothecation of stock and book debts both present and future.

9 Hitherto, the Company followed the policy of providing depreciation on computer software in accordance with Schedule XIV of the Companies Act, 1956. During the year, the Company, in order to have more appropriate presentation of the fixed assets and having regard to the extent of usage of the asset and its estimated useful life, has changed this policy and now follows the policy of depreciating it over its estimated useful life of five years. As the result of the change in the method.of providing for depreciation, the charge for the year is higher by Rs.83,625/- and the profit for the year is lower by the like amount.

10 The figures in the Profit and Loss Account and in the Cash Flow Statement are for the year ended on 31st March, 2010 whereas the figures for the previous period are from 26th May, 2008 to 31st March, 2009, hence, they are not strictly comparable.

11 Previous periods figures have been regrouped , wherever necessary, to conform to the classification of the current year.




Mar 31, 2009

1 Contingent liabilities, in respect of Custom duty paid under protest.

The same is included under advances recoverable in cash or in kind in Schedule 8 pending resolution of the dispute. 10,737,136

The trading material/software imported are subjected to different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted for certain items and has demanded additional duty for the same. The differential duty has been paid under protest.

2 The Company was incorporated on 26th May, 2008 with the object of carrying on the business of sales and marketing of active networking products.

Pursuant to the Scheme of Arrangement (Scheme) entered into by D-Link (India) Limited (D-Link) with the Company, the Marketing Business of D-Link, consisting of marketing and selling of "D-Link" branded active networking products etc. was transferred to the Company with effect from 1 st April, 2008, the Appointed Date.

The said Scheme, under section 391 to 394 of the Companies Act, 1956, has been approved by the Honble High Court of Judicature of Bombay at Goa, vide its Order dated 27th February, 2009.

The Scheme provides, inter alia, the transfer of the Marketing Business of D-Link on a going concern basis to the Company in consideration for which, each shareholder of D-Link whose name appears in the Register of Members of D-Link on the record date, shall receive one fully-paid Equity Share, of the face value Rs 21- each in the Company, aggregating to 30,004,850 Equity Shares of Rs.2/-each.

The Scheme provides that it shall become effective upon satisfaction of the conditions set out in the Scheme therein, including receipt of necessary approvals from Government Authorities. Accordingly, upon receipt of the requisite approvals, as aforesaid, the Effective Date of the Scheme was 10th June, 2009.

As an integral part of the scheme, upon the effective date, the Authorised Share Capital of the Company shall stand enhanced to Rs.70,000,000/- divided into 35,000,000 Equity Shares of Rs.2/- each.

As an integral part of the Scheme, upon the Effective Date, 2,50,000 Equity Shares of the face value Rs. 2/-aggregating to Rs.500,000/- held by the existing shareholders in the Company shall be extinguished and the amount paid thereon shall be refunded to each of the said shareholders and the paid up Equity Share Capital of the Company shall stand reduced accordingly.

The reduction of Share Capital shall be undertaken in accordance with provisions of Sections 100 to 103 of the Act and the D-Link carried on the business of the Company for the period from the Appointed Date to the Effective Date, in trust as per the requirements of the Scheme.

The Scheme further provides that, as an integral part of the Scheme, the foreign promoters of D-Link viz. D-Link Holding Mauritius Inc. shall swap 7,216,166 Equity Shares of Rs. 21- each in the Company held by Mr. K. R. Naik and his family members, the Indian promoters of D-Link, in exchange for: (i) 10,898,497 Equity shares of Rs. 21- each held by D-Link Holding Mauritius Inc. in D-Link; and (ii) the payment of an additional cash consideration of USD 5,000,000 by D-Link Holding Mauritius to Mr. K.R.Naikand his family members.

Upon the swap of shares as above, and subject to receipt of necessary approvals, per the Scheme, D-Link shall be re-named as"Smart Link NetworkSystemsLimited"and the Company shall be re-named as"D-Link (India) Limited".

V The assumptions of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other re levant factors, such as supply and demand in the employment.

VI This being the first period of operations of the Company, the question of disclosure pertaining to the amount of the presentvalueof the obligation, experience adjustments arising on plan liabilities for the previous four annual periods does notarise.

VII The contributions expected to be made by the Company during the financial year 2009-10 have not been ascertained.

VIII The disclosure as required under AS-15 regarding the Companys defined contribution plans is as follows: i) Contribution to providentfund Rs.8,57,199/-.

3 The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure requirement in this regard as per the Schedule VI of the Companies Act,! 956 is given accordingly.

4 a) The Company enters into foreign exchange forward contracts to offset the foreign currency risk arising from the amounts denominated in currencies other than the Indian rupee. The counter party to the Companys foreign currency forward contracts is generally a bank.These contracts are entered into to hedge the foreign currency risks of firm commitments.

5 Lease transactions Operating leases

The company has taken premises/vehicles on cancellable operating lease basis.The tenure of the agreement ranges from 33/60 months.There are no renewal or purchase options and escalation clauses in these agreements. The lease rentals for the year charged to revenue are Rs. 222,780/-.

6 Related party disclosures

List of related parties with whom transactions have taken place during the period and nature of relationship Name of the related parties Nature of relationship

Mr.KamalakshaR.Naik Key management person

Mr. Jangoo Dalai (upto 30th March 2009) Key management person

D-Link(lndia)Ltd Enterprise over which key management person and his relatives are able to exercise significant influence.

7 Segment information

(A) Segment information for primary reporting (by business segment)

The Company has its operations in marketing and distributing networking products.These networking products are sold to distributors, Original Equipment Manufacturers (OEMs) and System Integrators (SI).The primary reporting segment for the Company, therefore, is the business segment, viz., networking products.

8 The Company was incorporated on 26th May, 2008 and this being the First Financial Period of operations of the Company, there are no figures for the previous year.

 
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