Notes to Accounts of Smartlink Holdings Ltd.

Mar 31, 2025

(b) Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having a par value of INR 2/- per share. Each shareholder is entitled for one vote per share held. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in the case of interim dividend. In the event of liquidation of company, the equity shareholders are entitled to receive the remaining assets of the company after distributions of all preferential amounts, in proportion to their shareholding.

NOTE 39: BUSINESS COMBINATION

i) During the year, the Honâble National Company Law Tribunal (NCLT), Mumbai Bench vide its order dated January 09, 2025 has approved the âScheme of Amalgamation (âSchemeâ)â of a Subsidiary namely Synegra EMS Limited (Synegra) (Transferor Company) with the Company (Transferee Company) with appointed date April 01,2024. The Company has filed the certified copy of the said order along with the requisite form with the Registrar of Companies, Goa on January 31,2025 (effective date). There is no consideration towards the âSchemeâ.

ii) The âSchemeâ has accordingly been given effect in the financial statements of the Company from the appointed date. Accordingly, the figures presented in the financial statements are after giving effect to the said Scheme. The âSchemeâ being a common control transaction, as per the requirement of Appendix C of Ind AS 103 on Business Combinations, the pooling of interest method has been applied and the comparative figures have been restated for the accounting impact of the Scheme.

iii) The difference between the consideration and the value of net assets and reserves and surplus of Synegra transferred to the Company has been adjusted against the capital reserves account of the Company, in accordance with the âSchemeâ.

iv) The effects of the âSchemeâ has been accounted for in the books of accounts of the Company in accordance with the Scheme and is in accordance with the Indian Accounting Standards.

v) Scheme related cost amounting to I NR 19.98 Lakhs has been included in note no. 37 under â Legal and Professional expensesâ. b) The financial statements for the earlier periods were prepared in accordance with Division III of Schedule III to the Companies Act,

2013, applicable to Non-Banking Financial Companies (NBFCs). Pursuant to the merger, the Company no longer meets the criteria of an NBFC. Accordingly, the financial statements for the current period have been prepared in accordance with Division II - Ind AS Schedule III to the Companies Act, 2013.

NOTE 40: EARNINGS/ LOSS PER SHARE

Basic earnings /(loss) per share amounts are calculated by dividing the profit/loss for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

The weighted average number of ordinary shares outstanding during the period is the number of ordinary shares outstanding at the beginning of the period, adjusted by the number of ordinary shares bought back or issued during the period multiplied by a time-weighting factor. The time-weighting factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year.

NOTE 41: CONTINGENT LIABILITIES
Particulars	As at March 31,2025	As at March 31,2024
(i) Disputed demands of custom duty INR 10.30 lakhs pending before the Customs Appeals (Amount deposited under protest INR 10.30 lakhs) in connection with classification of networking products. Appeal is decided against Company and in process of filing Appeal in CESTAT	10.30	10.30
(ii) Disputed demand of income tax INR 12.20 lakhs pending before Income Tax Appeals in connection with disallowance of business expenditure of INR 58.16 lakhs. (Pre Deposit paid against the same INR 2.45 lakhs)	12.20
(iii) Bank guarantees given in favour of Electricity Department - Government of Goa	65.61	65.61
(iv) Corporate guarantees given in favour of banks on behalf of Digisol Systems Limited (Wholly owned subsidiary)
HDFC Bank Limited	3,000.00	3,000.00
Bajaj Finance Limited	-	2,000.00
(v) Mutual Fund pledged against overdraft facility obtained by Digisol Systems Limited (wholly owned subsidiary) for an amount not exceeding INR 500 lakhs. (refer note 13)	500.00	300.00
(vi) Mutual Fund pledged against overdraft facility obtained by The Company.	-	200.00
Total	3,565.61	5,565.61

The Executive-Chairman of the Company acts as the chief operating decision maker (CODM) of the Company in accordance with Operating Segment (Ind AS 108), for purpose of assessing the financial performance and position of the Company, and make strategic decisions. During the year the company has surrendered its NBFI - non deposit taking license to the Reserve Bank of India, subsequent to merger of its Subsidiary. Accordingly, the Companyâs business activities are mainly related to developing, manufacturing, marketing, distributing and servicing networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEMâs) and System Integrators (SI) ,which are primarily assessed as a single reportable operating segment in accordance with Ind As 108 by the CODM.

NOTE 48: FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair value

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash, bank balances, short-term deposits, trade and other short-term receivables, trade payables, other current liabilities and other financial liabilities approximate their carrying amounts largely due to short-term maturities of these instruments.

2. The fair value of non-current financial assets comprising of term deposits at amortised cost using Effective Interest Rate (EIR) are not significantly different from the carrying amount.

3. The fair value of Lease liabilities are calculated based on cash flows discounted using a current lending rate. They are classified at level 3 in the fair value hierarchy due to the inclusion of unobservable inputs including own and counterparty credit risk.

NOTE 49: FAIR VALUE HIERARCHY

The fair value of financial instruments as referred to above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

â¢ Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

â¢ Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The fair value of Mutual funds and FVOCI bonds and preference shares are based on published net assets values or other observable market data. They are classified at level 2 in the fair value hierarchy.

â¢ Level 3 - If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Companyâs risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.

(A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of interest rate risk, price risk and currency risk.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimise the Companyâs position with regards to interest income, treasury team manages the interest rate risk by diversifying its portfolio across tenures. The Company does not have exposure to the risk of changes in market interest rates as the Companyâs long-term debt obligations are with fixed interest rates.

(ii) Price risk

The Companyâs exposure to securities risk arises from investments held by the Company and classified in the Balance Sheet as fair value through OCI.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a different currency from the Companyâs functional currency).

(B) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk primarily arises from cash equivalents, trade receivables, financial assets measured at amortised cost and financial assets measured at fair value through profit or loss or other comprehensive income. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets.

For other financial assets and investments, the Company has an investment policy which allows the Company to invest only with counterparties having a good credit rating. The Company reviews the credit worthiness of these counterparties on an on-going basis. Counterparty limits may be updated as and when required subject to approval of Board of Directors.

The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a monthâs operational costs. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts.

Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables.

The Companyâs maximum exposure to credit risk for the components of the balance sheet at March 31,2025 and March 31,2024 is the carrying amounts as mentioned in Note 8, 9, 13,14,15,16,17 and 18.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar profile thereby ensuring safety of capital and availability of liquidity as and when required. Hence, the Company carries a negligible liquidity risk.

The Company has not given Loans or Advances in the nature of loans to Promoters, Directors, Key Management Personnel and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person.

NOTE 52: INTANGIBLE ASSETS UNDER DEVELOPMENT

The Company does not have any Intangible assets under development during the current year and the previous year.

NOTE 53: DETAILS OF BENAMI PROPERTY HELD

The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

NOTE 54: RECONCILIATION OF QUARTERLY RETURNS OR STATEMENTS OF CURRENT ASSETS FILED WITH BANKS OR FINANCIAL INSTITUTIONS

Monthly returns / statements filed with such Banks/ financial institutions are in agreement with the books of account.

NOTE 55: WILFUL DEFAULTER

The Company has not been declared a wilful defaulter by any bank or financial Institution.

NOTE 56: RELATIONSHIP WITH STRUCK OFF COMPANIES UNDER SECTION 248 OF THE COMPANIES ACT, 2013 OR SECTION 560 OF COMPANIES ACT, 1956.

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

NOTE 57: REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES

The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

NOTE 58: COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES

The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

NOTE 59: UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE 61: UNDISCLOSED INCOME

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

NOTE 62: DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in Crypto currency or Virtual Currency during the years ended March 31, 2025 and March 31,2024.

NOTE 63: CAPITAL MANAGEMENT

For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to safeguard the Companyâs ability to remain as a going concern and maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans, long term and other strategic plans and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust its dividend payment ratio to shareholders, return capital to shareholders or issue fresh shares.

The Company monitors capital using a ratio of âadjusted net debtâ to âequityâ. For this purpose, adjusted net debt is defined as liabilities, comprising interest-bearing loans and borrowings less cash and cash equivalents. Equity comprises all components of equity including share premium and all other equity reserves attributable to the equity share holders.

NOTE 64: GOVERNMENT GRANTS

The company had received approval under the Production Linked Incentive (PLI) to promote Telecom and Networking Products manufacture in India (the PLI scheme) on October 31,2022 from the Competent Authority. During the year ended March 31,2025 on fulfilment of the conditions for eligibility of incentive under the PLI scheme, the Company has recognised incentive of INR 426.65 lakhs (Previous year INR 431.53 lakhs).

There are no amounts towards unfulfilled conditions and other Contingencies attached to the grant that have been recognised during the financial year ended March 31,2025 (Previous year INR NIL).

As at March 31,2025, the Company did not have any outstanding long term derivative contracts (previous year INR NIL).

NOTE 68:

There were no whistleblower complaints received during the FY 2024-25.

NOTE 69:

The Company does not have any scheme of arrangement which has an accounting impact on current or previous financial year.

As per the Ministry of Corporate Affairs (MCA) notification, proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, for the financial year commencing April 1,2023, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. The interpretation and guidance on what level edit log and audit trail needs to be maintained evolved during the year and continues to evolve.

The Company uses an accounting software and a payroll application for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the accounting software and the payroll application, except that the audit trail feature is not enabled at the database level for the accounting software. Further no instance of audit trail feature being tampered with was noted in respect of the accounting software and payroll application. The audit trail of prior year has been preserved by the service provider as per the statutory requirements for record retention.

NOTE 72: EVENT AFTER REPORTING DATE

There have been no events after the reporting date that require disclosure in these financial statements.

Mar 31, 2024

2.11 Provisions and contingent liabilities

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. In the event the time value of money is material, provision is carried at the present value of the cash flows required to settle the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events, where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

2.12 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits net of bank overdraft with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of cash flow statement, cash and cash equivalents include cash on hand, cash in bank and short-term deposits net of bank overdraft.

2.13 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(a) Investment in subsidiaries

Interest in subsidiaries are recognised at cost and not adjusted to fair value at the end of each reporting period. Cost represents amount paid for acquisition of the said investments.

The Company assesses at the end of each reporting period, if there are any indications that the said investments may be impaired. If so, the Company estimates the recoverable value/amount of the investment and provides for impairment, if any i.e. the deficit in the recoverable value over cost.

(b) Financial assets

(i) Initial recognition and measurement

At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

(ii) Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

a) at amortized cost; or

b) at fair value through other comprehensive income; or

c) at fair value through profit or loss.

The classification depends on the entityâs business model for managing the financial assets and the contractual terms of the cash flows.

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in interest income using the effective interest rate method (EIR).

Fair value through other comprehensive income (FVTOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assetsâ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVTOCI). Movements in the carrying amount are taken through other comprehensive income (OCI), except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to Statement of Profit and Loss and recognized in other gains/ (losses). Interest income from these financial assets is included in interest income using the effective interest rate method.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVTOCI are measured at fair value through profit or loss. Interest income from these financial assets is included in Interest income.

Equity instruments: All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.

(iii) Impairment of financial assets

The Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets.

For recognition of impairment loss on financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent years, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12 month ECL.

Life time ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the year end. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original effective interest rate (EIR). When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payment is more than 30 days past due.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/expense in the statement of profit and loss. In balance sheet ECL for financial assets measured at amortized cost is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount.

(iv) Derecognition of financial assets

A financial asset is derecognized only when

a) the rights to receive cash flows from the financial asset is transferred or

b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the financial asset is transferred then in that case financial asset is derecognized only if substantially all risks and rewards of ownership of the financial asset is transferred. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.

(i) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss and at amortized cost, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs.

(ii) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the Statement of Profit and Loss.

(iii) Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss as finance costs.

(d) Financial Guarantee Contracts

Financial guarantees are initially recognised in the financial statements (within âother liabilitiesâ) at fair value. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation. Any increase in the liability relating to financial guarantees is recorded in the statement of profit and loss in credit loss expense. The premium received is recognised in the statement of profit and loss in net fees and commission income on a straight line basis over the life of the guarantee.

(e) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

2.14 Employee Benefits

(a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the year in which the employees render the related service are recognized in respect of employeesâ services up to the end of the year and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(b) long-term employee benefit obligations

(i) Defined contribution plan

Provident Fund: The Companyâs contributions to statutory provident fund in accordance with the Employees Provident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan, are charged to the Statement of Profit and Loss in the period of accrual. The Company has no obligation, other than the contribution payable to the provident fund.

Employeeâs State Insurance Scheme: Contribution towards employeesâ state insurance scheme is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution plan as the Company does not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the Statement of Profit and Loss.

(ii) Defined benefit plans Gratuity:

The Company provides for gratuity, a defined benefit plan (the âGratuity Planââ) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) at the end of each year.

Remeasurements, comprising of actuarial gains and losses and the return on plan assets (excluding net interest) is reflected immediately in the balance sheet with a charge/credit recognised in Other Comprehensive Income ("OCIâ) in the period in which they occur. Remeasurements recognised in OCI is reflected immediately in surplus in statement of profit and loss account and is not reclassified to profit or loss in subsequent periods.

Companyâs liabilities towards compensated absences to employees which are expected to be availed or encashed beyond 12 months from the end of the year are accrued on the basis of valuations, as at the Balance Sheet date, carried out by an independent actuary using Projected Unit Credit Method.

Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the statement of profit and loss.

2.15 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Companyâs earnings per share is the net profit or loss for the year after deducting preference dividends and any attributable tax thereto for the year. The weighted average number of equity shares outstanding during the year and for all the years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

2.16 Borrowing Costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.

All borrowing costs are charged to the Statement of Profit and Loss except:

a) Borrowing costs directly attributable to the acquisition or construction of assets that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of such assets.

b) Expenses incurred on raising long term borrowings are amortised using effective interest rate method over the period of borrowings. Investment Income earned on the temporary investment of funds of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

2.17 Dividend on ordinary shares

The Company recognises a liability when the distribution is authorised by the shareholders. A corresponding amount is recognised directly in equity.

2.18 Rounding off amounts

All amounts disclosed in financial statements and notes have been rounded off to the nearest lakhs, unless otherwise stated.

NOTE 3: SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

In the preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively. Information about assumptions, judgements and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending March 31,2024 are as below:

(a) Useful life of Property, plant and equipment, Investment Property and intangible assets and its expected residual value

Property, plant and equipment, Investment Property and other intangible assets represent a significant proportion of the assets of the Company. Depreciation and amortisation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

(b) Fair value measurements and valuation processes

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates include considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty), funding value adjustments, correlation and volatility for further details about determination of fair value.

The determination of Companyâs liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in Other Comprehensive Income. Such valuation depend upon assumptions determined after taking into account discount rate, salary growth rate, expected rate of return, mortality and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. Information about such valuation is provided in notes to the financial statements.

(d) Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

(e) Effective Interest Rate (EIR) method

The Companyâs EIR methodology, recognises interest income / expense using a rate of return that represents the best estimate of a constant rate of return over the expected behavioural life of loans given / taken and recognises the effect of potentially different interest rates at various stages and other characteristics of the financial instruments.

This estimation, by nature, requires an element of judgement regarding the expected behaviour and life-cycle of the instruments, as well expected changes to Indiaâs base rate and other fee income/expense that are integral parts of the instrument.

(f) Impairment of financial asset

The Company recognizes loss allowances for Expected Credit Losses (ECL) on its financial assets measured at amortized cost and Fair Value through Other Comprehensive Income (FVTOCI) except investment in equity instruments. At each reporting date, the Company assesses whether the above financial assets are credit- impaired. A financial asset is âcredit- impairedâ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

NOTE 4: RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs ("MCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31,2024, MCA had not notified any new standards or amendments to the existing standards applicable to the Company.

NOTE 38: SEGMENT REPORTING

NOTE 39: FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

A. Accounting classification and fair values

B. Measurement of fair value

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash, bank balances, short-term deposits, trade and other short-term receivables, trade payables and other financial liabilities approximate their carrying amounts largely due to short-term maturities of these instruments.

2. The fair value of non-current financial assets comprising of term deposits at amortised cost using Effective Interest Rate (EIR) are not significantly different from the carrying amount.

NOTE 40: FAIR VALUE HIERARCHY

â¢ Level 3 - If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

NOTE 41: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

(A) Market risk

(i) Interest rate risk

(ii) Price risk

The Companyâs exposure to securities risk arises from investments held by the Company and classified in the Balance Sheet as fair value through OCI.

(B) Credit risk

The Companyâs maximum exposure to credit risk for the components of the balance sheet at March 31,2024 and March 31,2023 is the carrying amounts as mentioned in Note 5, 6, 7, 8 and 10.

The Companyâs principal sources of liquidity are âcash and cash equivalentsâ and cash flows that are generated from operations. The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. The Company has no borrowings. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar profile thereby ensuring safety of capital and availability of liquidity as and when required. Hence, the Company carries a negligible liquidity risk.

NOTE 42: (Amount in INR Lakhs, unless otherwise stated)

NOTE 43: INTANGIBLE ASSETS UNDER DEVELOPMENT

The Company does not have any Intangible assets under development during the current year and the previous year.

NOTE 44: DETAILS OF BENAMI PROPERTY HELD

The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

NOTE 45: RECONCILIATION OF QUARTERLY RETURNS OR STATEMENTS OF CURRENT ASSETS FILED WITH BANKS OR FINANCIAL INSTITUTIONS

The Company has not availed any overdraft facility / loan during the current year and the previous year.

NOTE 46: WILFUL DEFAULTER

The Company has not been declared a wilful defaulter by any bank or financial Institution.

NOTE 47: RELATIONSHIP WITH STRUCK OFF COMPANIES UNDER SECTION 248 OF THE COMPANIES ACT, 2013 OR SECTION 560 OF COMPANIES ACT, 1956.

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

NOTE 48: âREGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES

The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

NOTE 49: COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES

The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

NOTE 50: UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

NOTE 51:

The Company is a Non Banking Financial Company classified in Base layer as per the Master direction DOR.FIN.REC.NO. 45/03.10.119/2023-24 Dated October 19,2023 Reserve Bank of India (Non-Banking Financial Company Scale Based regulation) Direction, 2023. Thus, the following analytical ratios are not applicable to the Company.

1. Capital to risk-weighted assets ratio (CRAR)

2. Tier I CRAR

3. Tier II CRAR

4. Liquidity Coverage Ratio.

NOTE 53: UNDISCLOSED INCOME

NOTE 54: DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in Crypto currency or Virtual Currency during the years ended March 31, 2024 and March 31,2023.

NOTE 55: CAPITAL MANAGEMENT

For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The Company operates as an Investment Company and consequently is registered as a Non-Banking Financial Institution - (Non Public Deposit Accepting) with Reserve Bank of India (RBI).

The Company does not have any borrowings in the nature of loans and advances from Banks, financial institutions and others and is cash surplus. The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with investment policy set by the Management. Safety of capital is of prime importance to ensure availability of capital for operations. Objective of investment policy is to provide safety and adequate return on the surplus funds.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2024 and March 31,2023.

NOTE 56:

The provisions of section 135 of Companies Act 2013, was not applicable to the Company and as such it was not required to spend 2% of average net profits made during the three immediately preceding financial years (March 31,2023: INR 7.40 lakhs). The Company has spent INR NIL (March 31,2023: INR 7.89 lakhs) towards Corporate Social Responsibility activities as under:

NOTE 62:

NOTE 63:

The Board of Directors of the Company at their meeting on February 09, 2024 has considered and approved the Scheme of Amalgamation (pursuant to Sections 230 to 232 and other applicable provisions of the Companies Act, 2013) of Synegra EMS Limited, subsidiary company with the Company, subject to the requisite statutory and regulatory approvals. The appointed date for the Scheme shall be April 1,2024. The Company has filed the the Scheme with the National Company Law Tribunal, Mumbai on April 30, 2024.

NOTE 64: EVENT AFTER REPORTING DATE:-

There have been no events after the reporting date that require disclosure in these financial statements.

As per my report of even date For and on behalf of the Board of Directors of

Smartlink Holdings Limited

For Shridhar & Associates CIN: L67100GA1993PLC001341

Chartered Accountants

ICAI Firm Registration No.: 134427W K. R. Naik Arati Naik

Executive Chairman Executive Director

Abhishek Pachlangia DIN: 00002013 DIN: 06965985

Partner

Membership No. 120593 K. G. Prabhu Urjita Damle

Chief Financial Officer Company Secretary

ICSI Membership No: 24654

Ghaziabad, dated: May 09, 2024 Mumbai, dated: May 09, 2024

Mar 31, 2018

NOTE 37: DISCONTINUED OPERATIONS

The Board of Directors of the Company at its meeting held on 04th August, 2016 had approved the sale of its "Digisol Business" comprising of Selling and Marketing of various categories of Networking and Information Technology (IT) Products sold under brand name "DIGISOL!'', hereinafter referred to as ("Digisol Business") and "EMS Business" comprising mainly of manufacture of various categories of electronic and IT products, to Digisol Systems Limited ("Digisol") and SynegraEMS Limited ("Synegra") respectively both 100% subsidiaries of the Company.

The Digisol Business and EMS Business together with its respective assets and liabilities, were transferred to Digisol and Synegra on a ''slump sale'' basis as a going concern, for a cash consideration of ?190,000,000/- and ?33,000,000/- respectively adjusted for net working capital changes as on the closing date.

In this connection, the Company obtained the shareholder''s approval through postal ballot on 16th September, 2016 and signed the Business Transfer Agreement dated 24th September, 2016. The closing date for the transfer as per the Business Transfer Agreement was 10th October, 2016. Subsequently, the Company had received the aforesaid amount on 15th November, 2016.

Accordingly, the Digisol Business and EMS Business is considered as a ''discontinued operation'' in terms of Accounting Standard 24 on ''Discontinued Operations'' (AS 24).

The disclosures required under AS 24 are as under:

a. Details of revenue and expenses and assets and liabilities of continuing and discontinued operations:

Amount in Rs.

		2016-2017
Particular	Continuing Operation	Discontinued Operation	Total
Turnover (net)	216,421,183	453,925,286	670,346,469
Other Income	25,230,748	5,896,201	31,126,949
Total Income	241 ,651 ,931	459,821 ,487	701,473,418
Total Expenditure	123,401,940	508,403,415	631,805,355
Profit / (Loss) before tax	118,249,991	(48,581 ,928)	69,668,063
Provision for taxation	82,735,633	(33,494,832)	49,240,801
Profit / (Loss) after tax	35,514,358	(15,087,096)	20,427,262
Assets	3,433,011,517	399,656,299	-
Liabilities	37,101,680	143,460,367	-

b. Cash flow from continuing and discontinued operations:

Particulars		2016-2017	Amount in
	Continuing Operation	Discontinued Operation	Total

Net cash from operating activities	(89,025,570)	(83,776,433)	(172,802,003)
Net cash (used in) /from investing activities	976,187,345	9,730,211	985,917,556
Net cash (used in) financing activities	(821,615,061)	197	(821,614,864)

NOTE 38: DISCLOSURE REQUIRED UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013

a) Particulars of Guarantees given

Amount in Rs

Sr. No	Name of the entity	Opening Balance	Guarantees Given	Guarntees Dischanged	Outstanding Balance	Purpose
1	Digisol Systems Limited	40,000,000	-	-	40,000,000	To HDFC Bank, for the working capital limit availed
2	Digisol Systems Limited	50,000,000	-	-	50,000,000	To Kotak Mahindra Bank, for working capital limit availed

b) Particulars of Investments made during the year

Sr. No.	Name of the Investee	Investment made	Purpose
1	Telesmart SCS Limited	23,800,000	In Equity Shares as Strategic Investment

NOTE 39: OTHER DISCLOSURE

a. In light of section 135 of the Companies Act 2013, the company has incurred expenses on Corporate Social Responsibility (CSR) aggregating to ?18,73,8377- (Previous year ?1,194,7757-) for CSR activities carried out during the current year.

	Particulars	For the year ended 31st March 2018	For the year ended 31st March 2017
a)	Gross amount required to be spent by the company during the year	1 ,864,672	1,068,548
b)	Amount spent during the year on the following
	1 . Construction / acquisition of any asset	-	-
	2. On purpose other than (1 ) above
	Installation of Networking products in various schools	1,328,837	-
	Prime Minister''s National Relief Fund	345,000	600,000
	- Aspiring Entrepreneurs Workshop/ mentoring sessions for educational institutions	200,000	594,755
		1,873,837	1,194,755

NOTE 40:

The information provided in Note no. 25 to 28,30 includes information pertaining to Discontinued Operations.

NOTE 41:

Previous year''s figures have been regrouped , wherever necessary, to correspond with those of the current year.

Signature to notes 1 to 41

For and on behalf of the Board
K. R. Naik	K. M. Gaonkar
Executive Chairman	Director
DIN: 000020 13	DIN: 00002425
Urjita Damle	K. G. Prabhu
Company Secretary	Chief Financial Officer

Mar 31, 2017

1: DISCONTINUED OPERATIONS

The Board of Directors of the Company at its meeting held on 04th August,2016 approved the sale of its âDigisol Businessâ comprising of Selling and Marketing of various categories of Networking and Information Technology (IT) Products sold under brand name âDIGISOLâ, hereinafter referred to as (âDigisol Businessâ) and âEMS Businessâ comprising mainly of manufacture of various categories of electronic and IT products, to Digisol Systems Limited (âDigisolâ) and Synegra EMS Limited (âSynegraâ) respectively both 100% subsidiaries of the Company.

The Digisol Business and EMS Business together with its respective assets and liabilities, were transferred to Digisol and Synegra on a âslump sale'' basis as a going concern, for a cash consideration of Rs. 190,000,000/- and Rs. 33,000,000/- respectively adjusted for net working capital changes as on the closing date.

In this connection, the Company had obtained the shareholder''s approval through postal ballot on 16^th September, 2016 and signed the Business Transfer Agreement dated 24^th September, 2016. The closing date for the transfer as per the Business Transfer Agreement was 10^th October, 2016. Subsequently, the Company has received the aforesaid amount on 15^th November, 2016.

Accordingly, the Digisol Business and EMS Business is considered as a âdiscontinued operation'' in terms of Accounting Standard 24 on âDiscontinued Operations'' (AS 24).

2: OTHER DISCLOSURE

3. Employee benefits expense for the previous year includes compensation to employees pursuant to a employee separation scheme of Rs. 16,835,510/-.

4. In light of section 135 of the Companies Act 2013, the company has incurred expenses on Corporate Social Responsibility (CSR) aggregating to Rs. 1,194,775/- (Previous year Rs. 405,225/-) for CSR activities carried out during the current year.

5. The information provided in Note no. 26 to 30, 32 and 36 includes information pertaining to Discontinued Operations.

6.Previous year''s figures have been regrouped , wherever necessary, to correspond with those of the current year.

Mar 31, 2016

NOTE 28: SEGMENT INFORMATION

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

The Company has its operations in developing, manufacturing, marketing, distributing and servicing 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

1 In the previous year deferred tax impact in respect of transitional provisions upon application of Schedule II of the Companies Act, 2013 has been given in the reserves.

NOTE 31: RELATED PARTY DISCLOSURES

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

Mr. Kamalaksha R. Naik Key management person

Ms. Arati K. Naik (Director / Chief Operating Officer) Key management person w.e.f. 09-Sep-14. (Relative of key management person

till 08-Sep-14)

Mr. Kamalaksha R. Naik (HUF) Enterprise over which key management person is able to exercise significant

influence.

Mrs. Sudha K. Naik Relative of key management person

Mrs. Lakshana A. Sharma Relative of key management person

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.

g) In the previous year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014, the Company revised the estimated useful lives of some of its fixed assets to align the useful lives with those specified in Schedule II.

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company fully depreciated the carrying value of fixed assets, where the remaining useful lives of the assets were determined to be nil as on April 1, 2014, and adjusted an amount of Rs, 1,570,625/- (net of deferred tax of Rs, 808,752/-) against the opening previous years Surplus in the Statement of Profit and Loss under Reserves and Surplus.

Previous year depreciation expense in the Statement of Profit and Loss was higher by Rs, 2,675,104/- consequent to the change in the useful lives of the assets.

h) The Company had instituted âEmployee Stock Option Planâ (ESOP) for its employees in the year 2000. To administer the ESOP the Company had created a Trust viz. D-Link (India) Limited ESOP Trust (the Trust) in September 2000. The said Trust was allotted 6,50,000 Equity Shares of Rs, 2/- each. In terms of the said ESOP the Trust had granted options to the employees in the form of Equity Shares which vest at the rate of 25% on each successive anniversary of the grant date. The Trust had been renamed as Smart link Network Systems Limited ESOP Trust. ESOP Compensation Committee had also re-priced the unexercised options granted to employees to compensate for reduction in the intrinsic value of the company pursuant to the Scheme of arrangement with D-link (India) Limited. The accounting of ESOP''s granted by the Trust to the employees of the Company was done in accordance with The SEBI (ESOS and ESPS) Guidelines, 1999. These Guidelines were amended in July 2004 for all accounting periods commencing after 30^th June 2003. The amendment required the Company to prepare its accounts as if the ESOS / ESPS scheme was administered by itself (rather than by the Trust). The Company had accordingly considered all the options granted by the Trust on or after 1^st April 2004. The difference between the Market price of the share (intrinsic value) and the exercise price of the option, on the date of grant, had been amortized over the vesting period. The annual amortization was included under âEmployee benefit expensesâ and the cumulative charge disclosed in the Balance sheet under âEmployee Stock Optionsâ

There are no further options outstanding to be granted.

During the year balance in Employee Stock Options has been transferred to Surplus in Statement of Profit and Loss.

i) Employee benefits expense for the year ended 31^st March, 2016 includes compensation to employees pursuant to a employee separation scheme of Rs, 168,35,510.

j) In light of section 135of the Companies Act 2013, the company has incurred expenses on Corporate Social Responsibility (CSR) aggregating to Rs, 405,225/- for CSR activities carried out during the current year.

Particulars Rupees

a) Gross amount required to be spent by the company during the year 462,444

b) Amount spent during the year on the following

1. Construction / acquisition of any asset -

2. On purpose other than (1) above

- Aspiring Entrepreneurs Workshop / mentoring sessions for educational institutions 405,225

k) Excise duty collected from customers against sales has been disclosed as a deduction from turnover . The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the statement of profit and loss as âExcise Dutyâ

l) Previous year''s figures have been regrouped, wherever necessary, to correspond with those of the current year.

Mar 31, 2015

NOTE 1 : BACKGROUND OF THE COMPANY

Smartlink Network Systems Limited ("Company") was originally incorporated on 31st March, 1993. The Company is in the business of developing, manufacturing, marketing, distributing and servicing of networking products.

a) Terms / rights attached to equity 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.

NOTE 2 : CONTINGENT LIABILITIES AND COMMITMENTS

Contingent liabilities in respect of As at 31st As at 31st 31st march,2015 March, 2014 (Rs) (Rs)

a. Show cause notices received from - 238,259 customs authorities relating to imports made in earlier years.

The Company has received order from Commissioner (Appeals) Nos. GOA-EXCUS-000-043 & 044-14-15 dated 12-Aug-2014 dropping the less charge demand notices

b. Disputed demands of custom duty 2,414,221 2,414,221 pending before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) (Amount deposited as pre-deposit Rs.900,000/-) in connection with classification of networking products.

c. Disputed demand of excise duty 38,715,672 38,715,672 in connection with valuation of products manufactured by the Company pending before CESTAT (Amount deposited as pre-deposit Rs.11,400,000/-)

d. Disputed penalty demands of Excise 39,880,674 39,880,674 Authorities with regard to (c) above, pending before the CESTAT

e. Custom duty paid under protest

The raw material / trading material / 3,883,884 3,883,884 software imported by the Company are subjected to different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted by the Company for certain items and has demanded additional duty for the same.

The Company has paid such differential duty under protest, which is included under Long term loans and advances in Note 12, pending resolution of the dispute.

The Company is confident of successfully contesting the demands and does not expect any significant liability to crystallise.

f. SEBI had filed a criminal case, in the Metropolitan Magistrate court, in June, 2006 under Section 77A(4) r/w Section 621 for alleged contravention of provisions of the Companies Act, 1956 for failing to complete the process of buy back of shares as provided under the said section.

The Company had filed an application in the Hon'ble High Court of Bombay and the Hon'ble High Court has passed the order on 03-Mar-2015 quashing the order of Metropolitan Magistrate.

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.

VIII. The contribution expected to be made by the Company during the financial year 2015-16 is Rs. 4,500,000/-.

IX. The plan assets are managed by the Gratuity trust formed by the Company. The management of funds is entrusted with Life Insurance Corporation of India. 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. 5,170,288/- (previous year Rs. 5,431,967/-).

NOTE 3 : SEGMENT INFORMATION

A Segment information for primary reporting (by business segment)

The Company has its operations in developing, manufacturing, marketing, distributing and servicing 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

1 In previous year deferred tax asset had been recognised to the extent of deferred tax liability on prudence. Other deferred tax assets had not been recognised in the absence of virtual / reasonable certainty supported by convincing evidence that future taxable income would be available against which such deferred tax asset would be recognised.

2 Deferred tax impact in respect of transitional provisions upon application of Schedule II of the Companies Act, 2013 has been given in the reserves.

NOTE 4 : RELATED PARTY DISCLOSURES Names of related parties where control exists

Smartlink Middle East FZE has been liquidated w.e.f. 23-Oct-2014.

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

Mr. Kamalaksha R. Naik Key management person

Ms. Aarti K. Naik Key management person w.e.f. (Director / Chief 09-Sep-14. (Relative of key Operating Officer) management person till 08-Sep-14)

Mr. Kamalaksha R. Naik (HUF) Enterprise over which key management person is able to exercise significant influence.

Mrs. Sudha K. Naik Relative of key management person

Mrs. Lakshana A. Sharma Relative of key management person

NOTE 5 : The Company had instituted "Employee Stock Option Plan" (ESOP) for its employees in the year 2000. To administer the ESOP the Company had created a Trust viz. D-Link (India) Limited ESOP Trust (the Trust) in September 2000. The said Trust was allotted 6,50,000 Equity Shares of Rs. 2/- each. In terms of the said ESOP, the Trust had granted options to the employees in the form of Equity Shares which vest at the rate of 25% on each successive anniversary of the grant date. The Trust had been renamed as Smartlink Network Systems Limited ESOP Trust. ESOP Compensation Committee had also re-priced the unexercised options granted to employees to compensate for reduction in the intrinsic value of the company pursuant to the Scheme of arrangement with D-link (India) Limited.

The accounting of ESOP's granted by the Trust to the employees of the Company was done in accordance with The SEBI (ESOS and ESPS) Guidelines, 1999. These Guidelines were amended in July 2004 for all accounting periods commencing after 30th June 2003. The amendment required the Company to prepare its accounts as if the ESOS/ESPS scheme was administered by itself (rather than by the Trust). The Company had accordingly considered all the options granted by the Trust on or after 1st April 2004. The difference between the Market price of the share (intrinsic value) and the exercise price of the option, on the date of grant, had been amortised over the vesting period. The annual amortization was included under "Employee benefit expenses" and the cumulative charge disclosed in the Balance sheet under "Employee stock options" There are no further options outstanding to be granted.

NOTE 6 : Excise duty collected from customers against sales has been disclosed as a deduction from turnover. The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the statement of profit and loss as "Excise Duty".

NOTE 7 : Previous year's figures have been regrouped, wherever necessary, to correspond with those of the current year.

Mar 31, 2014

NOTE 1 : SEGMENT INFORMATION

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

The Company has its operations in developing, manufacturing, marketing, distributing and servicing 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 2 : LEASE TRANSACTION Operating leases

The Company had taken premises / vehicles on cancellable operating lease basis. The tenure of the agreement ranged from 33/60 months. There were no renewal or purchase options and escalation clauses in these agreements. The lease rentals for the year charged to revenue are Rs. Nil/- (previous year Rs. 18,160/-)

g) The Company had instituted "Employee Stock Option Plan" (ESOP) for its employees in the year 2000. To administer the ESOP the Company had created a Trust viz. D-Link (India) Limited ESOP Trust (the Trust) in September 2000. The said Trust was allotted 6,50,000 Equity Shares of Rs. 2/- each. In terms of the said ESOP, the Trust had granted options to the employees in the form of Equity Shares which vest at the rate of 25% on each successive anniversary of the grant date. The Trust had been renamed as Smartlink ESOP Trust.

ESOP Compensation Committee had also re-priced the unexercised options granted to employees to compensate for reduction in the intrinsic value of the company pursuant to the Scheme of arrangement with D-Link (India) Limited. The accounting of ESOP''s granted by the Trust to the employees of the Company was done in accordance with The SEBI (ESOS and ESPS) Guidelines, 1999. These Guidelines were amended in July 2004 for all accounting periods commencing after 30th June 2003. The amendment required the Company to prepare its accounts as if the ESOS/ESPS scheme was administered by itself (rather than by the Trust). The Company had accordingly considered all the options granted by the Trust on or after 1st April 2004. The difference between the Market price of the share (intrinsic value) and the exercise price of the option, on the date of grant, had been amortised over the vesting period. The annual amortization was included under "Employee benefit expenses" and the cumulative charge disclosed in the Balance sheet under "Employee stock options" There are no further options outstanding to be granted.

h) Excise duty collected from customers against sales has been disclosed as a deduction from turnover. The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the statement of profit and loss account as "Excise Duty".

i) Previous year''s figures have been regrouped, wherever necessary, to correspond with those of the current year.

Mar 31, 2013

NOTE 1 : BACKGROUND OF THE COMPANY

Smartlink Network Systems Limited ("Company") was originally incorporated on 31st March, 1993. The Company is in the business of developing, manufacturing, marketing, distributing and servicing of networking products.

NOTE 2: SEGMENT INFORMATION

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

The Company has its operations in developing, manufacturing, marketing, distributing and servicing 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 3 : LEASE TRANSACTION

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. 18,160/- (previous year Rs. 645,740/-)

Note : *During the current year other items have given rise to a net deferred tax asset of Rs. 25,221,503/-. However, in view of the loss incurred the Company as a matter of prudence has not recognised deferred tax asset arising out of the same. (Previous year the unabsorbed business loss, depreciation and other items had given rise to net deferred tax asset amounting to Rs. 54,826,287/-. However, in the absence of virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized, the Company had not accounted for the same.)

NOTE 4 : RELATED PARTY DISCLOSURES

Names of related parties where control exists

Smartlink Middle East FZE

NOTE 5 : DISCONTINUING OPERATIONS

The Board of Directors of the Company at its meeting held on 31st March, 2011 approved the sale of the Structured cabling business comprising of manufacture, sale and marketing of structured cabling products carried under the brand name "DIGILINK", hereinafter referred to as ("Digilink Business"), to Schneider Electric India Private Limited (" Schneider"). The Digilink Business together with its respective assets and liabilities, was transferred to Schneider on a ''slump sale'' basis as a going concern, for a cash consideration ofRs. 5,030,000,000/- to be adjusted for any net working capital changes as on the closing date.

In this connection, the Company had signed the Business Transfer Agreement dated 31st March, 2011 and had obtained the shareholders approval through postal ballot on 11th May, 2011. The consideration was received on 13th May, 2011, the Closing date. The balance consideration on account of net working-capital adjustments was received during the quarter ending 30th September, 2011. The profit on account of the above transaction was disclosed as an exceptional item in the previous year.

Accordingly, the ''DIGILINK'' business was considered as a ''discontinued operation'' in terms of Accounting Standard 24 on ''Discontinued Operations'' (AS 24).

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.

a) The Company had instituted "Employee Stock Option Plan" (ESOP) for its employees in the year 2000. To administer the ESOP the Company had created a Trust viz. D-Link (India) Limited ESOP Trust (the Trust) in September 2000. The said Trust was allotted 6,50,000 Equity Shares of Rs. 2/-each. In terms of the said ESOP, the Trust had granted options to the employees in the form of Equity Shares which vest at the rate of 25% on each successive anniversary of the grant date. The Trust had been renamed as Smartlink ESOP Trust. ESOP Compensation Committee had also re-priced the unexercised options granted to employees to compensate for reduction in the intrinsic value of the company pursuant to the Scheme of arrangement with D-link (India) Limited. The accounting of ESOP''s granted by the Trust to the employees of the Company was done in accordance with The SEBI (ESOS and ESPS) Guidelines, 1999. These Guidelines were amended in July 2004 for all accounting periods commencing after 30th June 2003. The amendment required the Company to prepare its accounts as if the ESOS/ESPS scheme was administered by itself (rather than by the Trust). The Company had accordingly considered all the options granted by the Trust on or after 1st April 2004. The difference between the Market price of the share (intrinsic value) and the exercise price of the option, on the date of grant, had been amortised over the vesting period. The annual amortization was included under "Employee benefit expenses" and the cumulative charge disclosed in the Balance sheet under "Employee stock options outstanding". There are no further options outstanding to be granted.

b) Excise duty collected from customers against sales has been disclosed as a deduction from turnover. The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the statement of profit and loss account as "Excise Duty".

c) Previous year''s figures have been regrouped, wherever necessary, to correspond with those of the current year.

Mar 31, 2012

BACKGROUND OF THE COMPANY

Smartlink Network Systems Limited ("Company") was incorporated on 31st March, 1993. The Company is in the business of developing, manufacturing, marketing, distributing and servicing of networking products.

1. Leasehold land / premises include:

(i) Plots of land of the aggregate gross value of Rs. 14,036,535- (previous year Rs. 14,036,538/-), taken on lease from the Goa Industrial Development Corporation (GIDC) for an initial period of thirty years with an option to extend the lease to ninety/ ninety-five years.

(ii) Land and premises of the aggregate gross value of Rs. 1,686,000/- (previous year Rs.1,686,000/-), taken on lease from Maharashtra Industrial Development Corporation (MIDC) for an initial period often years with an option to extend the lease to ninety-five years.

Title deeds in respect of the above are in the names of GIDC and MIDC respectively.

2. Goodwill represents the difference between the net assets of erstwhile Virtual Computers Private Limited taken over pursuant to scheme of amalgamation and the cost of shares held by the Company in the erstwhile Virtual Computers Private Limited.

3. Buildings comprises of a building given on operating lease for a period of 12 months.

NOTE 24: CONTINGENT LIABILITIES AND COMMITMENTS as at as at Contingent liabilities in respect of 31 st 31 st March 2012 March 2012

a. Show cause notices received from customs authorities relating to imports 709,043 242,015,325 made in earlier years. The Company has filed replies to these notices.

b. Disputed demands of custom duty pending before the Customs, 2,414,221 2,414,221 Excise and Service Tax Appellate Tribunal (CESTAT)

c. Disputed penalty demands of Custom Authorities with respect to (b) above, 2,412,221 2,412,221 pending before theCustoms, Excise and Service Tax Appellate Tribunal (CESTAT)

d. Disputed demand of excise duty in connection with valuation of products 38,715,672 38,715,672 manufactured by the Company pending before CESTAT

e. Disputed penalty demands of Excise Authorities with regard to (d) above, 39,517,713 39,517,713 pending before theCESTAT

f. Custom duty paid under protest The raw material / trading material / software imported by the Company are subjected 4,487,728 4,487,728 to different rates of customs duty based on classification under respective Tariff Head.

The Customs department has objected to the classifications adopted by the Company for certain items and has demanded additional duty for the same.

The Company has paid such differential duty under protest, which is included under Long term loans and advances in Note 12, pending resolution of the dispute.

g. Disputed demand of Income-tax for Assessment Year 2008-09 pending before 40,297,980 - Commissioner of Income-taxax (Appeals), Panaji.

h. SEBI had filed a criminal case, in the Metropolitan Magistrate court, in June, 2006 under Section 77A(4) r/w Section 621 for alleged contravention of provisions of the Companies Act, 1956 for failing to complete the process of buy back of shares as provided under the said section. The Company had filed an application in the Hon'ble High Court of Bombay and the Hon'ble High Court has passed Orders staying the proceedings in the Metropolitan Magistrate court. The stay is continuing.

The Company does not expect any liability on this account at this stage.

Capital commitments

Estimated amount of contracts remaining to be executed on capital account 14,246,950 231,960 and not provided for

VIII. The company has made contribution of Rs. 1,500,000/- for the FY 2012-13.

IX. The plan assets are managed by the Gratuity trust formed by the Company. The management of funds is entrusted with Life Insurance Corporation of India. 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. 4,062,473/- (previous year Rs. 3,224,639/-).

NOTE 28: SEGMENT INFORMATION

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

The Company has its operations in developing, manufacturing, marketing, distributing and servicing 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 29: 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. 645,740/- (previous year Rs. 1,138,304/-)

NOTE 33: DISCONTINUING OPERATIONS

The Board of Directors of the Company at its meeting held on 31st March, 2011 approved the sale of the Structured cabling business comprising of manufacture, sale and marketing of structured cabling products carried under the brand name "DIGILINK", hereinafter referred to as ("Digilink Business"), to Schneider Electric India Private Limited ("Schneider"). The Digilink Business together with its respective assets and liabilities, was transferred to Schneider on a 'slump sale' basis as a going concern, for a cash consideration of Rs. 5,030,000,000/- to be adjusted for any net working capital changes as on the closing date.

In this connection, the Company had signed the Business Transfer Agreement dated 31st March, 2011 and had obtained the shareholders approval through postal ballot on 11th May, 2011. The consideration was received on 13th May, 2011 , the Closing date. The balance consideration on account of net working capital adjustments was received during the quarter ending 30th September, 2011. The profit on account of the above transaction is disclosed as an exceptional item.

Accordingly, the 'DIGILINK' business is considered as a 'discontinued operation' in terms of Accounting Standard 24 on 'Discontinued Operations' (AS 24).

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.

i. The Company had instituted "Employee Stock Option Plan" (ESOP) for its employees in the year 2000. To administer the ESOP the Company had created a Trust viz. D-Link (India) Limited ESOP Trust (the Trust) in September 2000. The said Trust was allotted 6,50,000 Equity Shares of Rs. 2/- each. In terms of the said ESOP, the Trust had granted options to the employees in the form of Equity Shares which vest at the rate of 25% on each successive anniversary of the grant date. The Trust had been renamed as Smartlink Network Systems Limited ESOP Trust. The accounting of ESOP's granted by the Trust to the employees of the Company was done in accordance with The SEBI (ESOS and ESPS) Guidelines, 1999. These Guidelines were amended in July 2004 for all accounting periods commencing after 30th June, 2003. The amendment required the Company to prepare its accounts as if the ESOS/ESPS scheme was administered by itself (rather than by the Trust). The Company had accordingly considered all the options granted by the Trust on or after 1st April 2004. The difference between the Market price of the share (intrinsic value) and the exercise price of the option, on the date of grant, had been amortised over the vesting period. The annual amortization was included under "Employee benefit expenses" and the cumulative charge disclosed in the Balance sheet under "Employee stock options outstanding" There are no further options outstanding to be granted.

j. Excise duty collected from customers against sales has been disclosed as a deduction from turnover. The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the profit and loss account as "Excise Duty".

k. Remuneration to an Executive chairman aggregating to Rs. 3,761,250/- initially paid which is in excess of limits specified in Schedue XIII of the Companies Act, 1956 is being recovered from the said Director and is accordingly disclosed in Note 17 Short Term Loans and Advances. The said amount is recovered subsequent to the year end.

l. Previous year's figures have been regrouped, wherever necessary, to correspond with those of the current year.

Mar 31, 2011

Current Year Previous Year Rupees Rupees

1.Estimated amount of contracts remaining to be executed on capital account and not provided for 231,960 7,289,807

2.Contingent liabilities, in respect of

a.Show cause notices received from customs authorities relating to imports made in earlier 242,015,325 242,733,026 years. The Company has filed replies to these notices and does not expect any demand to materialize

b.Disputed demands of custom duty pending before the Customs, Excise and Service Tax 2,414,221 2,414,221 Appellate Tribunal (CESTAT)

c.Disputed penalty demands of Custom Authorities with respect to (b) above, pending before 2,412,221 2,412,221 the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)

d.Disputed demand of excise duty in connection with valuation of products manufactured by 38,715,672 38,715,672 the Company pending before CESTAT

e.Disputed penalty demands of Excise Authorities with regard to (d) above, pending before 39,517,713 39,517,713 the CESTAT

f.Custom duty paid under protest The raw material/trading material/ software imported by the Company are subjected to 4,487,728 4,487,728 different rates of customs duty based on classification under respective Tariff Head. The Customs department has objected to the classifications adopted by the Company for certain items and has demanded additional duty for the same. The Company has paid such differential duty under protest, which is included under Advances recoverable in cash or in kind or for value to be received in Schedule 8, pending resolution of the dispute.

g.SEBI had filed a criminal case, in the Metropolitan Magistrate court, in June, 2006 under Section 77A(4) r/w Section 621 for alleged contravention of provisions of the Companies Act, 1956 for failing to complete the process of buy back of shares as provided under the said section. The Company had filed an application in the HonÃble High Court of Bombay and the HonÃble High Court has passed Orders staying the proceedings in the Metropolitan Magistrate court. The stay is continuing. The Company does not expect any liability on this account at this stage.

3. The Board of Directors of the Company at its meeting held on 31st March, 2011 approved the sale of the Structured cabling business comprising of manufacture, sale and marketing of structured cabling products carried under the brand name ÃDIGILINKÃ, hereinafter referred to as ("Digilink Business"), to Schneider Electric India Private Limited (Ã SchneiderÃ). The Digilink Business together with its respective assets and liabilities, shall be transferred to Schneider on a 'slump sale' basis as a going concern, for a cash consideration of Rs. 5,030,000,000/- to be adjusted for any net working capital changes as on the closing date.

In this connection, the Company has signed the Business Transfer Agreement dated 31st March, 2011 and has obtained the shareholder's approval subsequent to the year-end.

Subsequently, the Company has received the aforesaid amount on 13th May, 2011, the closing date, and has taken steps to complete the transaction with Schneider.

Accordingly, the 'DIGILINK' business is considered as a 'discontinued operation' in terms of Accounting Standard 24 on 'Discontinued Operations' (AS 24).

The disclosures required under AS 24 are as under:

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. 1,334,624/- (previous year Rs. 1,345,178/-)

5. Related party disclosures

Names of related parties where control exists

Digilink Middle East (FZE) (w.e.f. 07th April 2010)

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

Digilink Middle East (FZE) (w.e.f. 07th April 2010) Subsidiary company

Mr.Kamalaksha R. Naik Key management person

Mr. Jangoo Dalal (previous year upto 31.05.2009) Key management person

Mrs.Sudha K. Naik Relative of key management person

Mrs. Lakshana A. Sharma Relative of key management person

Ms. Arati K. Naik Relative of key management person

D-link India Limited (formerly known as Smartlink Enterprise over which key management person and his relatives are

Network Systems Limited) (previous year upto 15-07-2009) able to exercise significant influence

Notes

1) There are no provisions for doubtful debts or amounts written off or written back for debts due from or due to related parties.

2) Figures in brackets are those of the previous year.

6. Segment information

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

The Company has its operations in developing, manufacturing, marketing, distributing and servicing networking products. These networking products are sold to distributors, Original Equipment Manufacturers (OEMÃs) 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

Information about secondary segments

7. Excise duty collected from customers against sales has been disclosed as a deduction from turnover . The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the profit and loss account as "Excise Duty".

8. The Company had instituted ÃEmployee Stock Option PlanÃ (ESOP) for its employees in the year 2000. To administer the ESOP the Company had created a Trust viz. D-Link (India) Limited ESOP Trust (the Trust) in September 2000. The said Trust was allotted 6,50,000 Equity Shares of Rs 2/- each. In terms of the said ESOP, the Trust has been granting options to the employees in the form of Equity Shares which vest at the rate of 25% on each successive anniversary of the grant date. The Trust has been renamed as Smartlink ESOP Trust. The accounting of ESOP's granted by the Trust to the employees of the Company is done in accordance with the SEBI (ESOS and ESPS) Guidelines, 1999. These Guidelines were amended in July 2004 for all accounting periods commencing after 30th June 2003. The amendment required the Company to prepare its accounts as if the ESOS/ESPS scheme was administered by itself (rather than by the Trust). The Company has accordingly considered all the options granted by the Trust on or after 1st April 2004. The difference between the Market price of the share (intrinsic value) and the exercise price of the option, on the date of grant, is being amortised over the vesting period. The annual amortization is included under ÃPayments to and Provisions for EmployeesÃ in Schedule-13 and the cumulative charge is disclosed in the Balance sheet under ÃEmployee stock options outstandingÃ.

9. Cash credit account with the bank was secured by hypothecation of movable assets, stock, stores, work-in-process, book debts both present and future. The aforesaid charge has been released by the bank during the year.

10. Previous year's figures have been regrouped , wherever necessary, to conform to those of the current year.

Mar 31, 2010

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

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

The Scheme provided, inter alia, the transfer of the Marketing Business of the Company on a going concern basis to Smartlink in consideration for which, each shareholder in the Company whose name appeared in the Register of Members of the Company on the record date, received one fully-paid Equity Share, of the face value Rs. 21- each in Smartlink, aggregating to 30,004,850 Equity Shares of Rs. 21- each.

The Scheme became effective upon satisfaction of the conditions set out in the Scheme therein, including receipt of necessary approvals from Government Authorities and accordingly the Effective Date of the Scheme was 10th June, 2009.

In accordance with the Scheme, the following have been given effect to in the books of, account of the Company during the previous year:

The Company carried on the business of Smartlink for the period from the Appointed Date to the Effective Date, in trust as per the requirements of the Scheme. Accordingly, the amount payable to Smartlink as at 31st March 2009 aggregated to Rs. 13,803,065/-, which was net of investments aggregating to Rs. 244,223,688/- (including dividend earned there on Rs. 2,784,568/-) transferred to Smartlink in connection with the said business.

Further as an integral part of the Scheme, the foreign promoters of the Company viz. D-Link Holding Mauritius Inc. swapped 7,216,166 Equity Shares of Rs. 21- each in Smartlink held by Mr. K. R. Naik and his family members, the Indian promoters of the Company, in exchange for: (i) 10,898,497 Equity shares of Rs. 21- each held by D-Link Holding Mauritius Inc. in the Company; 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. Upon the swap of shares as above, and on receipt of necessary approvals, as per the Scheme, the Company was re-named as "Smartlink Network Systems Limited" and Smartlink was re-named as "D-Link (India) Limited".

VIII. The Company has contributed Rs.2,000,000/- for the financial year 2010-11 (Previous year Nil).

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

B. The disclosure as required under AS-15 regarding the Companys defined contribution plans is as follows: i) Contribution to provident fund Rs. 4,565,723/- (previous year Rs. 4,601,139/-).

:. A The Company had sold certain products in earlier years to Cerebra Integrated Technologies Limited ("Cerebra"), situated at Bangalore for a sum of Rs. 6,720,000/-. Cerebra had filed for financial restructuring with the Board for Industrial and Financial Reconstruction ("BIFR"). As per the final order of the BIFR the Company received 160,000 Equity Shares of Cerebra in lieu of receivable of Rs. 3,360,000/-. The Company had provided Rs. 2,315,200/- for dimunition in value of this investment having regard to the market price of the Equity Shares of Cerebra in the previous year. During the current year, the Company has sold the entire investment for a consideration of Rs. 1,662,116/-. The resultant loss of Rs. 1,697,884/- has been disclosed under "Manufacturing and other expenses" in Schedule 13.

2. 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. 1,345,178/- (previous year Rs. 1,290,987/-)

Notes:

1 There are no provisions for doubtful debts or amounts written off or written back for debts due from or due to related parties.

2 Figures in brackets are those of the previous year.

3 The disclosures are pertaining to previous year only. 15. Segment information

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

The Company has its operations in developing, manufacturing, marketing, distributing and servicing 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

3. Excise duty collected from customers against sales has been disclosed as a deduction from turnover . The excise duty related to the difference between the opening and closing stock of finished goods is disclosed separately in the profit and loss account as "Excise Duty".

4. Hitherto, the Company followed the policy of providing depreciation on Plant and machinery, Electrical installations, Air conditioners, Computer software, Furniture fittings and office equipment 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 these assets and their estimated useful life, has changed this policy and now follows the policy of depreciating these assets over their estimated useful life. As the result of the change in the method of providing for depreciation, the charge for the year is higher by Rs.65,998,936/- and the profit for the year is lower by the like amount.

5. Cash Credit account with the bank is secured by hypothecation of movable assets, stock, stores, work-in- process, book debts both present and future.

6. The Company had instituted "Employee Stock Option Plan" (ESOP) for its employees in the year 2000. To administer the ESOP the Company had created a Trust viz. D-Link (India) Limited ESOP Trust (the Trust) in September 2000. The said Trust was allotted 6,50,000 Equity Shares of Rs 21- each. In terms of the said ESOP, the Trust has been granting options to the employees in the form of Equity Shares which vest at the rate of 25% on each successive anniversary of the grant date.

During the current year, ESOP Compensation Committee has re-priced the unexercised options granted to employees to compensate for reduction in the intrinsic value of the company pursuant to the Scheme of arrangement with D-link (India) Limited.

The accounting of ESOPs granted by the Trust to the employees of the Company is done in accordance with The SEBI (ESOS and ESPS) Guidelines, 1999. These Guidelines were amended in July 2004 for all accounting periods commencing after 30th June 2003. The amendment required the Company to prepare its accounts as if the ESOS/ESPS scheme was administered by itself (rather than by the Trust). The Company has accordingly considered all the options granted by the Trust on or after 1st April 2004. The difference between the Market price of the share (intrinsic value) and the exercise price of the option, on the date of grant, is being amortised over the vesting period. The annual amortization is included under "Payments to and Provisions for Employees" in Schedule-14 and the cumulative charge is disclosed in the Balance sheet under "Employee stock options outstanding"

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