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

Mar 31, 2018

1 Background of the Company

D-Link (India) Limited (“The Company”) was incorporated on May 26, 2008. The Company is a subsidiary of D-Link Holding Mauritius Inc. and is primarily engaged in marketing and distribution of Networking products. The Company operates through a distribution network with a wide range of product portfolio and solutions with a nationwide reach across India. The equity shares of the Company are listed on BSE Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE).

The registered office of the Company is “Plot no. U02B, Verna Industrial Estate, Verna, Salcette, Goa - 403 722, India” and the corporate office is at Unit no. 24, 2^nd Floor, Kalpataru Square, Kondivita lane, Andheri-East, Mumbai - 400059.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on May 29, 2018.

ii. Terms and Rights attached

The Company has a single class of equity shares. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

v. Shares alloted as fully paid-up pursuant to contracts without payment being received in cash during the period of five years immediately preceding the date of the Balance Sheet are as under :

5,500,000 Equity shares fully paid up issued to the shareholders and promoters of TeamF1 Networks Private Limited (TeamF1) on preferential allotment basis on May 29, 2014 pursuant to a share swap agreement.

Notes :

(i) The general reserve is credited from time to time to transfer profits from retained earnings for appropriation purposes.

(ii) Security premium account is created when shares are issued at premium. Company can use it only in accordance with the provisions of the Companies Act, 2013.

(iii) On September 1, 2017, in respect of financial year 2016-17, a dividend of Rs.0.50 per share (total dividend Rs.177.55 Lakhs ) was approved by the shareholders at the Annual General Meeting and subsequently paid to the holders of fully paid equity shares.

Disclosures relating to amounts payable as at the year end together with interest paid/payable to Micro, Small and Medium Enterprises have been made in the accounts, as required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company determined on the basis of intimations received from suppliers regarding their status and required disclosures are given below :

2. Earnings per share

Earnings per share is calculated by dividing the profit attributable to the Equity shareholders by the weighted average number of Equity shares outstanding during the year, as under:

3. Employee benefit plans

i. Defined contribution plans

The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.61.06 Lakhs (Previous Year ended March 31, 2017 Rs.64.30 Lakhs) for Provident Fund contributions in the Statement of profit & loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

ii. Defined benefit plan

The gratuity scheme is a defined benefit plan that provides for a lump sum payment to the employees on exit either by way of retirement, death, disability or voluntary withdrawal. Under the scheme, the employees are entitled to a lump sum amount aggregating to 15 days final basic salary for each year of completed service payable at the time of retirement/resignation, provided the employee has completed 5 years of continuous service. The defined benefit plan is administered by a third-party insurer. The third-party insurer is responsible for the investment policy with regards to the assets of the plan.

Under the plan, the employees are entitled to a sum amounting to 15 days final basic salary for each year of completed service payable subject to maximum of Rs.20 Lakhs (Rs. 10 Lakhs upto previous year) at the time of retirement/resignation provided the employee has completed 5 years of continuous services.

The Plan exposes the Company to the following risks:

Salary Escalation Rate

The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. Amounts recognised in statement of profit and loss in respect of these defined benefit plans are as follows.

The current service cost and the net interest expense for the year are included in the ‘Employee benefits expense’ line item in the statement of profit and loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

The amount included in the balance sheet arising from the entity’s obligation in respect of its defined benefit plans is as follows.

4. Financial instruments

i. Capital management

The company manages its capital to ensure that it will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The company is not subject to any externally imposed capital requirements.

ii. Categories of financial instruments

5. Financial risk management objectives

The Company’s principal financial liabilities, comprise short term borrowings, trade and other payables. The main purpose of these financial liabilities is to support its operations. The Company’s principal financial assets include investment in subsidiary, trade and other receivables, current investments and cash that are derived directly from its operations.

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including foreign currency and interest rate risk). The Company’s Board of Directors reviews and sets out policies for managing these risks and monitors suitable actions taken by management to minimize potential adverse effects of such risks on the company’s operational and financial performance.

i. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company. The Company has adopted a policy of dealing with only credit worthy counterparties and the credit risk exposure for them is managed by the Company by credit worthiness checks. The Company also takes an credit risk insurance policy.

The credit risk on liquid funds and investments in Mutual funds is limited because the counterparties are banks / Mutual funds with high credit-ratings assigned by international credit-rating agencies.

ii. Liquidity risk management

The Company’s principal sources of liquidity are cash and cash equivalents, cash flow generated from operations and by churning of current investments. The Company does not have any significant borrowing. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

Liquidity risk tables

The following tables detail the company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay.

The table below provides details regarding the contractual maturities of financial liabilities as at March 31, 2018.

iii. Market risk

The Company is exposed to market risks associated with foreign currency rates.

Foreign currency risk management

The company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

Foreign currency sensitivity analysis

The company is mainly exposed to the US Dollar currency.

The Company’s exchange risk arises from its foreign currency purchases and revenues, (primarily in U.S. Dollars). “As a result, if the value of the Indian Rupee appreciates relative to these foreign currencies, the Company’s purchases measured in Indian Rupees will decrease. The exchange rate between the Indian Rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Due to lesser quantum of revenue from foreign currencies, the Company is not significantly exposed to foreign currency risk in receivables. The following table details the company’s sensitivity to a 5% increase and decrease in the ‘ against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the ‘ strengthens 5% against the relevant currency. For a 5% weakening of the ‘ against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Forward foreign exchange contracts

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 a bank. These contracts are entered into hedge the foreign currency risks of firm commitments.

The following table details the forward foreign currency (FC) contracts outstanding at the end of the reporting period:

6. Fair value measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

The directors are of the belief that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.

7.Operating lease arrangements

The Company as lessee

The company has taken premises on cancellable operating lease basis. The tenure of the agreement ranges from 24 to 60 months. There are no renewal and escalation clauses in these agreements.

The lease rentals for the year charged to revenue are Rs.331.53 Lakhs (Previous year Rs.359.46 Lakhs)

8. Segment information

The principal business of the Company is marketing and distribution of D-Link branded Networking products. All other activities of the Company revolve around its main business. The CEO & Managing Director of the Company, has been identified as the chief operating decision maker (CODM). The CODM evaluates the Company’s performance, allocates resources based on analysis of the various performance indicators of the Company as a single unit. Therefore, directors have concluded that there is only one operating reportable segment as defined by Ind AS 108 - Operating Segments.

9. Corporate Social Responsibility

(a) Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof: Rs.47.97 Lakhs (Previous year: Rs.16.01 Lakhs)

(b) Gross amount required to be spent during the period: Rs.63.87 Laks (Previous year: Rs.58.03 Lakhs).

10.Explanation to Transition to Ind AS

These financial statements for the year ended March 31, 2018 are the first financial statements prepared by the Company in accordance with Ind AS. The Company had prepared its financial statements for periods up to and including the year ended March 31, 2017 in accordance with statutory reporting requirements in India (‘previous GAAP’) immediately before adopting Ind AS. Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ended as on March 31, 2018 together with the comparative data as at and for the year ended March 31, 2017. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 1, 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating the previous GAAP financial statements, including the balance sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

Notes to reconciliation between Previuos GAAP and Ind AS

1. Dividends

Under previous GAAP until 2017 dividend payable was recorded as a liability in the period to which it related. Whereas, under Ind AS, dividend to shareholder is recognised as a liability in the period in which the obligation to pay is established. This has resulted in increase in equity by Rs.299.13 Lakhs (including corporate tax on proposed dividend) as on April 1, 2016.

2. Employee benefits

Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the return on plan asset and actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognised in other comprehensive income. This resulted in a reclassification between profit or loss and other comprehensive income.

3. Forward Contract Liability

Under Previous GAAP in respect of forward exchange contracts the company has recognised the mark to market loss by comparing the spot rates on booking date with the reporting date and also amortised forward premium over the life of the contract. Under Ind AS, the Company has fair valued the forward contracts. The effect of these is reflected in total equity and / or profit or loss, as applicable.

4. Investments

Under Previous GAAP Investments in mutual funds were measured at lower of cost or fair value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition. The effect of these is reflected in total equity and/or profit or loss, as applicable.

5. Cash credit account with Bank

Under IND AS, Cash credit account with bank which is payable on demand and form an integral part of an entity’s cash management system is included in cash and cash equivalents for the purpose of presentation of statement of cashflows. Whereas under previous GAAP there was no similar guidance and hence, Cash credit account with bank were considered similar to other borrowings and the movement therein were reflected in cash flows from financing activities. The effect of these is reflected in cashflows from financing activities and Cash and cash equivalents.

11.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

TeamF1 Networks Private Limited Subsidiary Company

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 International Pte. Ltd. (DILA) Fellow Subsidiary

D-Link Latin America Company Ltd. Fellow Subsidiary

D-Link Brazil LTDA Fellow Subsidiary

D-Link Australia Pty Limited Fellow Subsidiary

D-Link Systems Inc. Fellow Subsidiary

TeamF1 Networks Private Limited Subsidiary Company

Mr. Yao Chuan Yang (Gary Yang) Key management person [Upto November 1, 2017]

Mr. Tushar Sighat Key management person

Mr. Douglas Hsiao Director [Upto August 7, 2017]

Mr. Rajaram Ajgaonkar Director

Mr. Satish Godbole Director

Mr. Anil Bakshi Director [Upto November 1, 2017]

Ms. Madhu Gadodia Director [w.e.f August 27, 2016]

Mr. Mukesh Lulla Director [w.e.f February 4, 2016]

12. Events after the reporting period

In respect of the year ended March 31, 2018, The Board of Directors proposed that a dividend of Rs.0.50/- (i.e. 25% ) per share be paid on fully paid equity shares. This equity dividend is subject to approval by shareholders at the Annual General meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is Rs.177.53 Lakhs.

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Mar 31, 2016

Note 1: 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. 5,676,097/- (Previous year Rs.4,237,323/-), including interest aggregating Rs. 2,229,372/- (Previous year Rs. 1,528,525/-). 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 succeeding in the appeal.

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 a bank. These contracts are entered into to hedge the foreign currency risks of firm commitments.

VII The contributions expected to be made by the Company during the financial year 2016-17 is Rs 5,000,000/-.

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. 5,887,493/-. (Previous year Rs.4,192,714/-)

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. 33,451,121/- (Previous year Rs. 30,964,350/-)

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

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 Company Ltd. Fellow Subsidiary

D-Link Brazil LTDA Fellow Subsidiary

D-Link Australia Pty Limited Fellow Subsidiary

D-Link Systems Inc. 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)

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 5: 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 6: During the previous 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 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 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 previous year is lower by Rs. 1,246,504/- and profit for the previous year is higher by the like amount consequent to the change in the useful life.

Note 7: As per the provisions of section 135 of the Companies Act, 2013, the company is required to spend Rs. 4,872,636/- (Previous year 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.

Note 8: During the previous year, the Company 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 was a reduction in the amount of provision required for leave encashment as at the previous year end. Accordingly, employee benefits expense for the previous year ended 31st March 2015 was lower by Rs. 13,763,156/- and the profit before tax for the previous year was higher by a like amount.

Note 9: Particulars of loans given as required under Section 186 (4) of the Companies Act, 2013

Note 10: Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification.

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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.

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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.

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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.

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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.

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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.

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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.

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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.