Smartlink Network Systems

The Board of Directors of your Company have pleasure in presenting the
 15th Annual Report together with Audited Balance Sheet and Profit &
 Loss Account for the financial year ended 31st March 2008.
 
 1.  FINANCIAL RESULTS AND APPROPRIATION
 
                                                       (Rs. in million) 
                                                 2007-08  2006-07
 
 Turnover (Gross)                                  245.06 3051.99
 Income from Services                               84.32   24.80
 Profit Before Depreciation and Tax                451.88  343.86
 Less: Depreciation for the year                    74.61   76.33
 Profit Before Tax (PBT) and                       377.26  267.53
 Exceptional items
 Add : Exceptional Items (Net)                       4.45      -
 Profit Before Tax                                 381.71  267.53
 Less: Provision for Tax
 a) Current Tax                                    104.62   52.50
 b) Deferred Tax                                   (13.32)  (0.1)
 c) Fringe Benefit Tax                               5.06    3.19
 Profit After Tax                                  285.34  211.94
 Add/(Less): Tax adjustment of
 Previous Year                                       -       7.33
 Net Profit                                        285.34  219.27
 Balance of profit brought forward                1123.73  996.68
 Amount avaifable for Appropriations              1409.07 1215.94
 Transfer to General Reserve                        29.00   22.00
 Dividend                                           60.00   60.00
 Tax on Dividend                                    10.20   10.20
 Balance carried forward to Balance Sheet         1309.86 1123.73
 Earning per Share (Rs.)                             9.51    7.31
 
 
 2.  PERFORMANCE AND SIGNIFICANT DEVELOPMENTS
 
 In the financial year 2007-08 your Company achieved a turnover of Rs.
 2945.06 million as compared to Rs. 3051.99 million in the previous
 year. The turnover for the current year from the core business of
 networking products has grown by 16.21 % to Rs. 2945.06 million as
 compared to Rs. 2534.09 million in the previous year. The Net Profit of
 the Company grew by 30.13 % and stood at Rs. 285.34 million as compared
 to Rs. 219.27 million in the previous year. Income from services grew
 from Rs.24.80 million in the previous year to Rs.84.32 million in the
 current year.
 
 The growth in turnover from core networking business was primarily led
 by growth in switches and wireless products and robust growth in all
 categories of passive networking products comprising of copper and
 fiber range.
 
 During the year, the Company completed all formalities and transferred
 the entire Sales and Marketing business of Gigabyte motherboards to M/s
 Gigabyte Technology (India) Limited for a consideration of Rs.90.42
 million. Your company is presently manufacturing motherboards on job-
 work basis to Gigabyte Technology (India) Limited. This has contributed
 to the significant growth in income from services during the current
 year.
 
 Your Company during the year inaugurated new R&D center at Bangalore to
 drive companys R&D initiatives in India by focusing on Converged IP
 solutions, Business Routers, Voice & Video over IP Products.
 
 3.  DIVIDEND
 
 Your Directors have recommended for your consideration the payment of a
 dividend for the year 2007-08 @ 100 % on the paid up equity Capital,
 i.e., Re. 21- per share, to be paid, if approved by Members at the
 Annual General Meeting.
 
 4.  EMPLOYEE STOCK OPTION PLAN
 
 The Company has an ongoing Employee Stock Option Scheme, which is being
 administered by the D-Link (India) Ltd ESOP Trust.
 
 During the year under the said Scheme D-Llink (india) Limited - Esop
 Trust granted 50,000 options to its eligible employees at Rs.60/-per
 share. The Information and details of options granted under D-Link
 (India) Limited ESOP Trust plan for the year ended 31st March 2008 are
 given in the Annexure I to this Report.
 
 The shareholders at the Annual General Meeting held on 20th August,
 2007 had approved the D-Link Employee Stock Option Plan 2007. The
 existing Compensation Committee has been reconstituted and renamed as
 ESOP Compensation Committee for implementing the Employee Stock Option
 Plan, 2007. However, no options have been given underthis Plan till
 date.
 
 5.  MANAGEMENT DISCUSSIONS ANALYSIS REPORT In accordance with Clause 49
 of the Listing Agreement with the Stock Exchanges, Management
 Discussion & Analysis Report is appended to this report.
 
 6.  CORPORATE GOVERNANCE
 
 A separate section on corporate governance as well as Certificate from
 the Auditors of the Company regarding compliance of conditions of
 Corporate Governance as stipulated under Clause 49 of the Listing
 Agreement with the stock exchanges forms part of the Annual Report.
 
 Your company had no independent Director in Gigabyte Technology (India)
 Limited, a material non-listed subsidiary company for a period of 3
 months from 1st April to 30th June, 2007. However, Gigabyte Technology
 (India) Limited, ceased to be subsidiary Company during the year.
 
 7.  AWARDS & RECOGNITION
 
 Your Company has received the following awards during the year under
 review:
 
 a) Most Popular Brand in Networking at the Gala Awards Night ceremony
 of COMPASS 2007. COMPASS is an association of more than 260 IT
 entrepreneurs of Eastern India.
 
 b) CRN Channel Champions Award 2007 for Networking. As per the survey
 by CRN, D-Link emerged as the single most popular networking vendor who
 enjoys clear cut leadership in Channel Relationship, Service & Support,
 Price-Performance, Marketing & Branding, Training & Certification:
 
 c) DQ Channel - Channels Choice Gold Award 2008 for Wired Networking
 and Wireless Networking based on the analysis done by IDC - using
 different parameters such as Brand Image, Product Quality, after sales
 support, Marketing Support and Commercial Terms etc.
 
 d) PC Quest D-Link1 Ranked in No. 1, in Indias most wanted IT brands
 for Structured Cabling. D-Link Wireless access point DWL 2100AP won
 Indias best product award form PC World Magazine.
 
 e) 360 Magazine Golden Rhino Award -2007 for Networking.
 
 8.  DIRECTORS
 
 Mr. Jangoo Dalai was appointed as the Managing Director & CEO during
 the year under review effective from 2nd July 2007.
 
 Mr. Krishnanand M. Gaonkarand Mr. Dattaraj Salgaoncar Directors of the
 Company who retire by rotation at the forthcoming Annual General
 Meeting and being eligible, offer themselves for re-appointment.
 
 9.  FIXED DEPOSITS
 
 Your Company has not accepted any fixed deposits during the year under
 review and, as such, no amount of principal or interest was outstanding
 as on the date of Balance Sheet.
 
 10. AUDITORS
 
 The Auditors, M/s Deloitte Haskins & Sells, Chartered Accountants,
 retire at the ensuing Annual General Meeting and offers themselves for
 reappointment. The Company has obtained the requisite certificate
 required under section 224 of the Companies Act 1956 to the effect that
 their re-appointment, if made, will be in conformity with limits
 specified in said section.
 
 11.  CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
 ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 1.  Conservation of Energy and Technology Absorption:
 
 Your company is constantly taking measures to improve the energy
 conservation. Your Companys manufacturing facilities at Goa are
 certified under ISO 14001: 2004 for Environmental Management System.
 Some of the initiatives during the year are as follows:
 
 Energy efficient CFL lamps have been used in production floors,
 variable frequency drives installed for motors in AHUs, Tuned
 electronic chokes are used in fluorescent tube light fittings.
 
 Automatic power factor controllers are installed.  AHU ducts have been
 modified. Major overhaul of chillers has resulted in improved
 efficiency.
 
 2.  Technology Absorption:
 
 The Company continues to use latest technologies for improving the
 productivity and quality of its products.  Imported machinery is used
 in the manufacturing process. The Company is, always, on the look out
 for ways and means to improve quality & productivity further by
 introducing/adopting new technology and constantly improving the
 existing methods of manufacturing.
 
 3.  Foreign Exchange Earnings and Outgo:
 
 Total foreign exchange earnings and outgo is stated in Notes forming
 part of the Accounts.
 
 12. PARTICULARS OF EMPLOYEES
 
 Particulars of employees as required under the provisions of Section
 217 (2A) of the Companies Act, 1956 read with the Companies
 (Particulars of Employees) Rules, 1975, as.  amended, forms part of
 this report. However, in pursuance of section 219(1) (b) (iv) of the
 Companies Act, 1956, this report is being sent to all the members of
 the company excluding the aforesaid information and the said
 particulars are made available at the registered office of the Company.
 The members desirous of obtaining such particulars may write to the
 Company Secretary at the registered office of the Company.
 
 13. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the provisions of
 Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors
 hereby state and confirm that;
 
 a) in the preparation of annual accounts, the applicable accounting
 standards have been followed
 
 b) the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give true and fair view of the state of affairs of
 the Company as at March 31, 2008 and the profit of the Company for the
 financial year ending on March 31, 2008.
 
 c) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities.
 
 d) the annual accounts have been prepared on a going concern basis
 
 14. SUBSIDIARY COMPANIES
 
 Your Company also as part of its long term strategy to focus on the
 core networking business of the company exited completely from the
 motherboard business by selling its entire investments in Gigabyte
 Technology (India) Limited for a consideration of Rs. 24.99 million to
 Gigabyte Technology, Taiwan. Consequent to the above, Gigabyte
 Technology (India) has ceased to be a subsidiary of the Company during
 the year.
 
 M/s. Intercorridor Systems Limited, during the year achieved a turnover
 of Rs. 2.89 million as compared to Rs.  3.87 million in the previous
 year. It has made a loss of Rs.0.13 million in the current year as
 compared to profit after Tax of Rs.0.87 million earned in the previous
 year.
 
 As required by Section 212 of the Companies Act, 1956, the audited
 accounts of the Subsidiary, M/s. Intercorridor Systems Limited and the
 reports thereon of the Directors and the Auditors are attached and
 forms part of the Annual Report.
 
 15. ACKNOWLEDGEMENTS
 
 Your Directors record the appreciation of the goodwill and wholehearted
 support of the valued customers, shareholders, clients, vendors,
 dealers, distributors, and bankers throughout the year.
 
 Your Directors wish to express their gratitude and record their sincere
 appreciation of the dedicated efforts of all the employees, their
 commitment and professionalism despite the challenging environment.
 
 Your Directors also thank the Goa Industrial Development Corporation,
 State Government Authorities and Electricity Departments for their
 valuable support.
 
                                   For and on behalf of the Board
 Mumbai                            K.R.NAIK
 Dated: 22nd June, 2008            Executive Chairman