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'Notes to Accounts' D-Link India Ltd.
1. Estimated amount of contracts remaining
to be executed on capital account
& not provided for 6,491,956 40,379,278
2. Contingent liabilities, in respect of
a. Claims against the Comp. not
acknowledged as debts
- Claim filed by erstwhile distributors in
various Metropolitan / Civil Courts. - 1,091,241
The Comp. has arrived at amicable out of
Court settlement by filing deed of
settlement in Metropolitan / Civil
Courts by paying Rs.800,000/-
[previous year Nils] as compensation.
b.Show cause notices received from customs
authorities relating to imports
made in earlier years. The Comp. has filed
replies to these notices and
does not expect any demand to materialize 242,733,026 242,733,036
c.Disputed demands of custom duty pending
before the Customs, Excise and
Service Tax Appellate Tribunal [CESTATs]
{pending with Commissioner of
Customs [Appealss] in the previous year} 2,414,221 2,414,221
d.Show cause notices received from excise
authorities in connection with
valuation of products manufactured by
Company for purpose of
calculation of excise duty.
- The Comp. has filed reply to these
notices & doesn't expect any
demand to materialize 4,333,506 38,423,002
- Disputed demand of excise duty pending
before CESTAT 34,089,496 -
- Disputed penalty demands of Excise
Authorities pending before the CESTAT 34,089,496 -
e.Disputed penalty demands of Excise
Authorities pending before the CESTAT/
pending with CESTAT/ Commissioner of
Excise [Appealss]
in the previous year} 802,041 802,041
f. Custom duty paid under protest
The raw material/trading material/software
imported by Comp. are
subjected to different rates of customs duty
based on classification under
espective Tariff Head. The Customs department
has objected to the
classifications adopted by Comp. for
certain items & has demanded
additional duty for same. The Comp.
has paid such differential duty
under protest.
The same is included under advances recoverable
in cash or in kind in
Schedule 9 pending resolution of dispute. 11,196,170 8,649,626
3.a. Managerial Remuneration under section 198
of the Companies Act, 1956,
paid to the Executive Chairman & Managing
director
Salary 19,653,622 3,480,574
Contribution to Provident fund 16,380 9,360
Perquisites * - -
Commission 1,773,816 1,345,331
Total 21,443,818 4,835,265
Notes:
The above remuneration excludes:
is] contribution to gratuity fund as the
incremental liability has been accounted
for the Comp. as a whole.
iis] sitting fees of Rs 85,000/
* Does not include monetary value of non
cash perquisites as per
I ncome- tax Act, 1961.
b.Commission payable to Independent Directors 1,773,816 1,345,331
c.Computation of net profit as per section 349
read with section 309[5s] and
section 198 of Companies Act, 1956
Profit before tax as per Profit & Loss 381,709,355 267,533,354
Less:Profit on sale of current investments
[non-trades] [nets] 15,031,490 10,954,406
Provision for diminution in value of current
investments [non-trades] written back 345,494 503,074
Provision for diminution in value of long term
investments [trades] written back 8,299,300 -
Compensation for transfer of business to
Gigabyte Technology India Limited 90,420,000 -
Provision for doubtful debts written back 17,547,363 6,936,009
250,065,708 249,139,865
5. The Comp. has adopted the Revised Accounting Standard [Revised AS
15s] on 'Employee Benefits' w.e.f April 1, 2007. In accordance with the
transitional provision of Revised AS 15, the incremental liability at
the beginning of year amounting to Rs 453,104/- [net of deferred
tax of Rs.229,898s] in respect of compensated absence & Rs.573,315/-
[net of deferred tax of Rs.290,892s] in respect of gratuity has been
adjusted against the General reserve. The impact on the profit of the
current year due to adoption of Revised AS 15 is not ascertainable.
B. Notes on Acc. [contd.s]
VI. The assumptions of future salary increases, considered in
actuarial valuation, take Acc. of inflation, seniority, promotion
and other relevant factors, such as supply & demand in the
employment.
VII. The amounts of present value of obligation, fair value of
the plan assets, surplus or deficit in the plan, experience adjustments
arising on plan liabilities & plan assets for previous four
annual periods have not been furnished as the revised AS-15 was adopted
by the Comp. in the financial year 2007-08.
VIII. The contributions expected to be made by Comp. during the
financial year 2008-09 have not been ascertained.
IX. The plan assets are managed by 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.
X. The disclosure as required under AS-15 regarding the Companys
defined contribution plans is as follows:
i. The Comp. has in addition to above accounted for provident fund
contribution aggregating to Rs.5,105,649/-.
6. Additional information pursuant to the provisions of paragraphs 3,4C
and 4D of part II of schedule VI to the Companies Act, 1956:
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 & closing stock of finished goods is
disclosed separately in the profit & loss Acc. as 'Excise Duty'
8. Hitherto, the Comp. followed the policy of providing
depreciation on Computers @ 8.46% / @ 16.21%, in accordance with
Schedule XIV of Companies Act, 1956. During the year, the Company,
in order to have more appropriate presentation of fixed assets and
having regard to the extent of usage of computers & their estimated
useful life, has changed this policy & now follows the policy of
depreciating all computers uniformly @ 25% . As a result of this change
in the method of providing for depreciation, the charge of depreciation
for the year is higher by Rs.7,526,211/- & the profit for year is
lower by like amount.
9. Hitherto, the Comp. followed the policy of valuing inventory at
lower of cost & net realizable value for raw materials, components,
stores & spares & trading stock calculated on FIFO basis. During
the year, the Comp. has used weighted average as the basis of
calculation instead of aforesaid FIFO basis. As a result of this
change in the method of valuation, the value of related closing
stock is higher by Rs. 1,514,073/- & the profit for year is
higher by like amount.
10. Cash Credit Acc. with the bank is secured by hypothecation of
movable assets, stock, stores, work-in-process, book debts both present
and future.
11. The Comp. held investments [unquoteds] in an associate, viz.,
Lanner Electronics India Limited [Lanners] aggregating to Rs.9,599,800/-
The Comp. had made provision towards diminution in the previous year,
to the extent of Rs.4,799,900/- [being 50% of value of Investments
mades]. During the current year, the Comp. has sold the entire
investment for a consideration of Rs.700,000/-. The resultant loss of
Rs.4,099,900/-[net of provision for diminution made in the previous
year written backs] has been included in 'Exceptional items' in the
Profit & loss account.
12. The Comp. held investments [unquoteds] in Mercury Link Systems
Limited [Mercurys] aggregating to Rs.3,499,400/- The Comp. had made
provision towards diminution for entire value of Investments in the
earlier years. During the current year, the Comp. has sold the entire
investment for a consideration of Rs. 100,000/-. The resultant gain of
Rs. 100,000/-[net of provision for diminution made in the earlier years
written backs] has been included in 'Exceptional items' in the Profit
and loss account.
13. The shareholders at the Annual General Meeting held on 6th August,
2005 had approved the transfer of business in relation to the sales and
marketing of Gigabyte Motherboards to Gigabyte Technology [Indias]
Limited over a period of 3 years for such consideration as may be
arrived at by an Independent Valuer appointed for purpose. During
the year vide Agreement dated 31st August, 2007, the Comp. has
completed all formalities for said transfer for a total
consideration of Rs. 90,420,000/-. The consideration has been included
in' Exceptional items' in the Profit & loss account.
14. The Board of Directors as part of its strategy to focus on the
core networking business of Comp. had at its meeting held on 30th
July, 2007 approved the transfer & sale of shares held by Company
in Gigabyte Technology [Indias] Limited to Gigabyte Technology, Taiwan
or its Subsidiaries/Associates at a price which shall not be less than
the Net Asset Value. The necessary agreement for same was executed
on 13th September, 2007 & the shares were transferred on 26th
October, 2007 for a consideration of Rs.24,990,861/-. The resultant
loss ofRs.45,008,539/- has accordingly has been included in '
Exceptional items ' in the Profit & loss account.
15. The Comp. had instituted 'Employee Stock Option Plan' [ESOPs] for
its employees in the year 2000. To administer the ESOP the Comp. had
created a Trust viz. D-Link [Indias] Limited ESOP Trust [the Trusts] in
September 2000. The said Trust was allotted 6,50,000 Equity Shares of
Rs 2 each. In terms of 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 grant date.
The accounting of ESOPs granted by Trust to the employees of the
Company is done in accordance with The SEBI [ESOS & ESPSs] 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 Acc. as if the ESOS/ESPS scheme was
administered by itself [rather than by Trusts]. The Comp. has
accordingly considered all the options granted by Trust on or after
1st April 2004. The difference between the Market price of share
[intrinsic values] & the exercise price of option, on the date of
grant, is being amortised over the vesting period. The annual
amortization is included under 'Payments to & Provisions for
Employees' in Schedule-14 & the cumulative charge is disclosed in the
Balance sheet under 'Employee stock options outstanding'
16. Previous years figures have been regrouped , wherever necessary,
to conform to the classification of current year.
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