Note: 1 Background of the Company D-Link (India) Limited (the Company) is a subsidiary of D-Link Holding Mauritius Inc. and is a part of D-Link Corporation, Taiwan. The Company is primarily engaged in marketing and distribution of D-Link branded Networking products in India and neighbouring countries. The Company operates through a distribution network with a wide range of product portfolio and solutions with a nationwide reach across India. Note: 2 Significant Accounting Policies a Basis of brparation of financial statements The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies Accounting Rules, 2014 and the relevant provisions of the Companies Act, 2013 (the Act). b Use of estimates The brparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Differences between the actual results and estimates are recognised in the year in which the results are known/ materialise. c Fixed assets i) Tangible assets Tangible fixed assets are carried at cost of acquisition or construction less accumulated debrciation and impairment loss, if any. ii) Intangible assets Intangible assets are stated at cost less accumulated amortisation. d Debrciation and amortisation i) Tangible assets Debrciation is provided on the straight-line method as per the useful life brscribed in Schedule II to the Companies Act, 2013. Assets costing less than Rs. 5,000 each are fully debrciated in the year of acquisition. Debrciation on additions and deletions during the year are charged on pro-rata basis. ii) Intangible assets Computer software is amortised over a period of five years. e Impairment of assets At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on 'Impairment of Assets'. An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount. f Investments Long-term (non-current) investments are carried at cost. Provision for diminution, if any, is made to recognize a decline, other than temporary, in the value of investments. Current investments are carried at lower of cost and fair value. g Inventories Traded goods are valued at lower of cost and net realisable value, on weighted average basis. h Revenue recognition Revenue from sale of products is recognised net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. Revenue from services is recognized when the services are rendered. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive the same is established. Revenue (income) is recognized when no significant uncertainty as to determination/realization exists. i Employee Benefits Post-employment and other long-term benefits i) Defined contribution plan Contribution under Defined Contribution Plan in the form of Provident Fund is recognised in the Statement of Profit and Loss in the period in which the employee has rendered the service. ii) Defined benefit and other long-term benefit plans Company's liabilities towards defined benefit plans and other long term benefits viz. gratuity and compensated absences are determined using the Projected Unit Credit Method. The liability is determined as a differential amount on the basis of actuarial valuation being carried out at each balance sheet date using Projected Unit Credit Method and fund balance. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period of occurrence of such gains and losses. Past service cost is recognised as an expense on a straight line basis over the average period until the benefits become vested. To the extent the benefits are already vested immediately following the introduction of, or changes to, a defined benefit plan, past service cost is recognised immediately. iii) Short-term employee benefits Short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised undiscounted during the period employee renders services. These benefits include performance incentives. j Foreign currency transactions Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected. In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the brmium or discount arising at the inception of the contract is amortised as expense or income over the life of contract. Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognised as income or expense. At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange. Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year. k Borrowing costs Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue. l Taxes on income Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act,1961. Deferred income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed debrciation and losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same. m Provisions and contingencies Provision is recognised in the accounts when there is a brsent obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any are disclosed in the notes to the financial statements. Note 3: Cash Credit accounts with banks are secured by charge ranking pari passu, by way of hypothecation of stock and book debts both brsent and future. Note 4: During the year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from 1st April 2014, the Company revised the estimated useful life of its assets to align the useful life with those specified in Schedule II. Pursuant to the transitional provisions brscribed in Schedule II to the Companies Act, 2013, the Company has fully debrciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on 1st April, 2014, and has adjusted an amount of Rs. 620,828/- (net of deferred tax of Rs. 319,678/-) against the opening Surplus balance in the Statement of Profit and Loss. The debrciation expense in the Statement of Profit and Loss for the year is lower by Rs. 1,246,504/- and profit for the year is higher by the like amount consequent to the change in the useful life . Note 5: As per the provisions of section 135 of the Companies Act, 2013, the company is required to spend Rs. 3,201,047/- towards Corporate Social Responsibility (CSR) activities. The Company has not spent any amount during the year and intends to do so in coming financial years in line with the CSR policy of the company. Note 6: During the year, the Company has changed its leave encashment policy, reducing the maximum leave accumulation per employee from 45 days to 10 days. As a result of this change, there is a reduction in the amount of provision required for leave encashment as at the year end. Accordingly, employee benefits expense for the year ended 31st March 2015 is lower by Rs. 13,763,156/- and the profit before tax for the year is higher by a like amount. Note 7: Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification. In terms of our report attached For Deloitte Haskins & Sells LLP Chartered Accountants For and on behalf of the Board of Directors Gary Yang Managing Director Tushar Sighat Executive Director & CEO A. B. Jani Partner C. M. Gaonkar Chief Financial Officer Shrinivas Adikesar Company Secretary Place : Mumbai, dated: 19th May, 2015 |