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 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 has received the aforesaid amount on 15th 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 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 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 31st 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 Planà (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 Employeesà 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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