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Smartlink Network Systems
BSE: 532419|NSE: SMARTLINK|ISIN: INE178C01020|SECTOR: Computers - Hardware
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Mar 12
Notes to Accounts Year End : Mar '13
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.
Source : Dion Global Solutions Limited
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