D-Link India announces demerger

Mumbai : The Board of
Directors of D-Link (India) have approved the proposal of restructuring the
business of the company by a 'Scheme of Arrangement' at its Board Meeting
held on October 5, 2008.

The scheme provides for
demerger of the business of sales and marketing of

D-Link branded active
networking products into one company (D-Link (India)) and the residual business
of structured cabling systems, R&D, manufacturing and service operations
into another company (Smartlink Network Systems). The scheme is subject to the
approval of shareholders, creditors and other approvals as may be required
including that of stock exchanges, High Court of Mumbai, Foreign Investment
Promotion Board and Reserve Bank of India. 

Each shareholder of D-Link
(India) shall receive one equity share (of face value Rs 2) in Smartlink Network
Systems Ltd for each equity share (of face value Rs 2) presently held in the
company. 

Post completion of the steps
involved in the demerger process, the new D-Link (India) will have the business
of sales and marketing of D-Link branded active networking products and the new
company Smartlink Network Systems will have the business of manufacturing,
R&D, sales and service of networking products and sales and marketing of SCS
products.

The board believes that the
demerger will result in focused business operations of the two companies and
allow them increased flexibility in taking advantage of the huge growth
opportunities in their respective business segments. 

Smartlink will drive both
captive and contract manufacturing businesses at its ISO 9000 certified factory
in Goa; R&D at its world-class center in Bangalore with specific focus on
VoIP and routing products; design and development, manufacturing, marketing and
sales of branded Digi-Link Passive Structured Cabling Systems and provide
nationwide service and support for networking products. 

Speaking on the occasion, KR
Naik, Executive Chairman, D-Link (India) said, " The demerger will bring
sharper focus to the two distinct set of activities and allow both companies to
chart independent long term strategies. This will lead to accelerated growth of
the businesses of both companies resulting in enhanced shareholder value."

AP Chen, CFO and Executive VP,
D-Link Corp said, "We are excited by the growth potential in the India market
for active networking products and believe that further focused approach
resulting out of this demerger would help us accelerate our growth in India."

Pursuant to the demerger, the
shares of Smartlink Network Systems Ltd shall be listed on Bombay Stock Exchange
and National Stock Exchange.