The Board of Directors of D-Link (India) Ltd. have approved the proposal of restructuring the business of the company by a ‘Scheme of Arrangement’ at its Board Meeting held on Sunday, 5th October, 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) Ltd.) and the residual business of structured cabling systems, R&D, manufacturing and service operations into another company (Smartlink Network Systems Ltd.). 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) Ltd. 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.

D-Link is one of the leading networking product brands globally. In India, besides sales and marketing of active networking products, the company is also engaged in other activities that are unique compared to D-Link operations globally. These include manufacturing, R&D and service of networking products as well as sales and service of SCS products.

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 Ltd. 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.

India represents one of the fastest growing markets for networking products and a strong focus on development of this business will further accelerate the growth in the healthy market share that D-Link branded active networking products enjoy in India.

Smartlink will drive both captive and contract manufacturing businesses at its ISO 9000 certified factory in Goa; R&D at its world-class centre 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, Mr. K.R. Naik, Executive Chairman of D-Link (India) Ltd. 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”

Speaking on the occasion, Mr. A. P. Chen, CFO and Executive VP D-Link Corporation. 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.

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