RELATED PARTY TRANSACTIONS

12 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 15 – RELATED PARTY TRANSACTIONS

TRADE

During Fiscal 2012 and 2011 we sold approximately $1,686,000 and $1,659,000, respectively of product to Star Light Electronics Company, Ltd. (“Star Light”) a related company, for direct shipment to Cosmo Communications of Canada, Ltd (“Cosmo”), another related company, at discounted pricing granted to major distributors. In addition, we sold and additional $87,000 in Fiscal 2012 and $234,000 in Fiscal 2011 of product to Cosmo from our California warehouse facility. The average gross profit margin on sales to Cosmo yielded 8.8% and 11.4%, respectively. We also sold $289,410 in Fiscal 2012 to Cosmo Communications HK, Ltd. who is also a related company. Cosmo was our primary distributor of the Company’s product to Canada in Fiscal 2012 and Fiscal 2011 and will continue in this role for Fiscal 2013.

We purchased products from Starlight USA in Fiscal 2012 and Starlight Marketing Development, Ltd., an indirect wholly-owned subsidiary of Starlight International in Fiscal 2011. The purchases from Starlight USA for Fiscal 2012 were $5,749,996 and purchases from Starlight Marketing Development, Ltd. (‘Starlight Marketing”) were $7,338,322 for Fiscal 2011. In Fiscal 2012, we also purchased products from Star Fair Electronics Co., Ltd. (“Star Fair”) in the amount of $922,524, Starlight R&D, Ltd (“Starlight R&D”) in the amount of $9,240, Cosmo USA in the amount of $23,000 and Cosmo in the amount of $137,376. All of these companies were indirectly wholly-owned subsidiaries if Starlight International. We also received charges for repair defective products from Starlight Marketing Development Ltd. (an indirect wholly-owned subsidiary of Starlight International) in the amounts of $114,561 for Fiscal 2012 and $0 for Fiscal 2011.

On August 1 2011, our subsidiary SMC-L entered into a service and logistics agreement with Starlight Consumer Electronics (USA), Inc. (“Starlight USA”), an indirect wholly-owned subsidiary of Starlight International, Cosmo USA, Inc. (“Cosmo USA”) and Starlight Electronics USA, Inc. (“Starlight Electronics USA”) to provide logistics, fulfillment, and warehousing services for Starlight USA, Cosmo USA and Starlight Electronic USA’s domestic sales. For these services, Starlight USA, Cosmo USA and Starlight Electronics USA have agreed to pay us an annual service fee totaling approximately $1,000,000 payable monthly beginning August 1, 2011. This agreement generated approximately $665,000 for Fiscal 2012 and is projected to generate $331,000 in fees for Fiscal 2013. This agreement terminates on July 31, 2012 at which time another annual agreement is expected to be signed for approximately the same amount.

On August 1 2010, our subsidiary SMC-L entered into a service and logistics agreement with Starlight USA, and Cosmo USA to provide logistics, fulfillment, and warehousing services for Starlight USA and Cosmo USA’s domestic sales. For these services, Starlight USA and Cosmo USA have agreed to pay us an annual service fee of approximately $1,000,000 payable monthly beginning August 1, 2010. This agreement generated approximately $665,000 for Fiscal 2011 and generated $331,000 in fees for Fiscal 2012. This agreement terminated on July 31, 2011 at which time another annual agreement is was signed for approximately the same amount.

In May 2008, our subsidiary SMC-L entered into a service and logistics agreement with Starlight USA, and Cosmo USA to provide logistics, fulfillment, and warehousing services for Starlight USA and Cosmo USA’s domestic sales. For these services, Starlight USA and Cosmo USA paid us an annual service fee of $1,137,501, paid monthly beginning July 1, 2008. The agreement generated approximately $333,333 for Fiscal 2010 and $804,168 in fees for Fiscal 2009. The agreement was terminated June 30, 2010 and replaced by the new logistics agreement on August 1, 2010. 

On August 1, 2006, our subsidiary SMC Macao entered into a service agreement with Star Light Electronics Company Limited, an indirect wholly-owned subsidiary of Starlight International, to provide shipping and engineering services to us for a fee of $25,000 per month. This amount increased to $29,000 per month effective July 1, 2008 however, due to a decrease in services provided to us, the fee was reduced for a period of time. Effective July 1, 2009 this amount was reduced to $14,000 per month. Effective August 1, 2010 the amount was again reduced to $8,000 per month due to decreased services provided to us. For Fiscal 2012 and Fiscal 2011, this service charge was $96,000 and $120,000, respectively.