SMARTLINK Accounting Policy


Smartlink Network Systems Limited (“Company”) was incorporated on 31st March, 1993. The Company was in the business of developing, manufacturing, marketing, distributing and servicing of networking products.

During the year the Board of Directors of the Company at its meeting held on 04th August, 2016 approved transfer of “Digisol Brand” Business of the Company related to Selling and Marketing of DIGISOL branded active Networking Products and the Electronic Manufacturing Services Business, (“EMS Business”) together with its respective assets and liabilities, as a going concern on a slump sale basis to its wholly owned subsidiaries i.e. M/s Digisol Systems Limited (Digisol) and Synegra EMS Limited (Synegra) respectively. The same was given effect pursuant to entering into a Business Transfer Agreements signed on 24th September, 2016 by the Company with Digisol and Synegra respectively.

Thus pursuant to completion of transfer of Digisol brand business and Electronic Manufacturing Services Business to Digisol and Synegra respectively on 10th October, 2016, the Company''''s Income consists mainly of income from investments.


(a) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013, and the relevant provisions of the Act. The financial statements have been prepared on accrual basis under the historical cost convention except for building acquired through amalgamation, that is carried at revalued amounts.

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of estimates

The preparation of 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 reported year. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized.

(c) Inventories

Items of inventory are valued at lower of cost and net realizable value, on the following basis:

(i) Raw materials, components, stores and spares - on weighted average basis.

(ii) Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

(d) Depreciation & Amortization

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:

Motor Vehicle - 5 years

Plant and equipment - 8 years

Furniture and Fixture - 8 years

Leasehold Land is amortized over the duration of the lease.

Intangible assets are amortized over their estimated useful life on straight line method as follows:

Acquired Goodwill - 5 years

Computer Software (ERP) - 3 years

Computer Software (Other Software’s) - 4 years

(e) Revenue recognition

Income from debentures and bonds is accrued over the maturity of the security.

Profit / Loss on sale of investments is recognized on the contract date.

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.

Revenue from sale of products is recognized 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. Sales include excise duty but exclude sales tax and value added tax.

Revenue from services is recognized when the services are rendered. Revenue from maintenance contracts are recognized pro-rata over the period of contract. Interest income is accounted on accrual basis.

(f) Fixed assets

i) Property, plant and equipment

Tangible assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any.

ii) Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment losses, if any.

(g) Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are affected.

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 premium or discount arising at the inception of the contract is amortized as expense or income over the life of contract.

Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognized 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.

(h) Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter''''s contribution are treated as Capital reserve.

(i) Investments

Long-term (non-current) investments are carried at cost. However when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

(j) Employee Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute / rules and when services are rendered by the employees.

ii. The Smartlink Group Gratuity Trust has taken a Group Gratuity cum Life Assurance policy from the Life Insurance Corporation of India (LIC). Provision is made in respect of difference between the actuarially determined gratuity liability and the fund available with LIC at the year end.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

(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) Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 1st April 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on “Leases”, (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

(m) Taxes on income

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax rates and the provisions of the Income Tax Act,1961 and other applicable tax laws.

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 recognized 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 depreciation and losses are recognized if there is virtual certainty that supported by convincing evidence sufficient future taxable income will be available to realize the same (Refer note 38 below).

(n) 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 recognized in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(o) Provisions and contingencies

Provision is recognized in the accounts when there is a present 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.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at

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