Exhibit 13.1
REDIFF.COM INDIA LIMITED
18TH ANNUAL REPORT
2012-2013
(UNDER COMPANIES ACT, 1956)
(INDIAN LAWS)
Rediff.com India Ltd.
Board of Directors
Ajit Balakrishnan (Chairman & Managing Director)
Arun Nanda
Sunil Phatarphekar
Ashok Narasimhan
Sridar Iyengar
Rashesh Shah
M. Madhavan Nambiar
Statutory Auditors
M/s. Deloitte Haskins & Sells
Chartered Accountants
Indiabulls Finance Centre, Tower 3,
27th - 32nd Floor, Elphinstone Mill
Compound, Senapati Bapat Marg,
Elphinstone (West), Mumbai – 400013
India.
Registered Office
First Floor,
Mahalaxmi Engineering Estate
L. J. First Cross Road
Mahim (West)
Mumbai 400 016, India
Contents
Sr. no. | Particulars | Page Nos. | ||
Documents as required under Companies Act, 1956 (Indian law) | ||||
1. | Notice of Annual General Meeting | 5-8 | ||
2. | Directors Report of Rediff.com India Ltd. | 9-13 | ||
3. | Auditors’ Report of Rediff.com India Ltd. | 14-16 | ||
4. | Balance Sheet and Statement of Profit and Loss, Notes thereto of Rediff.com India Ltd. | 17-43 | ||
5. | Statement pursuant to Section 212 of the Companies Act 1956 | 44 | ||
6. | Directors Report of Vubites India Pvt. Ltd. | 45-47 | ||
7. | Auditors’ Report of Vubites India Pvt. Ltd. | 48-49 | ||
8. | Balance Sheet and Statement of Profit and Loss, Notes thereto of Vubites India Pvt. Ltd. | 50-65 | ||
9. | Directors Report of Rediff Holdings Inc. | 66 | ||
10. | Auditors’ Report of Rediff Holdings Inc. | 67-68 | ||
11. | Balance Sheet and Statement of Profit and Loss, Notes thereto of Rediff Holdings Inc. | 69-77 | ||
12. | Directors Report of India Abroad Publications Inc. | 78 | ||
13. | Auditors’ Report of India Abroad Publications Inc. | 79-80 | ||
14. | Balance Sheet and Statement of Profit and Loss, Notes thereto of India Abroad Publications Inc. | 81-90 | ||
15. | Directors Report of India in New York Inc | 91 | ||
16. | Auditors’ Report of India in New York Inc | 92-93 | ||
17. | Balance Sheet and Statement of Profit and Loss, Notes thereto of India in New York Inc | 94-100 | ||
18. | Directors Report of India Abroad Publications (Canada) Inc. | 101 |
19. | Auditors’ Report of India Abroad Publications (Canada) Inc. | 102-103 | ||
20. | Balance Sheet and Statement of Profit and Loss, Notes thereto of India Abroad Publications (Canada) Inc. | 104-112 | ||
21. | Directors Report of Rediff.com Inc. | 113 | ||
22. | Auditors’ Report of Rediff.com Inc. | 114-115 | ||
23. | Balance Sheet and Statement of Profit and Loss, Notes thereto of Rediff.com Inc. | 116-124 | ||
24. | Directors Report of Value Communications Corporation | 125 | ||
25. | Auditors’ Report of Value Communications Corporation | 126-127 | ||
26. | Balance Sheet and Statement of Profit and Loss, Notes thereto of Value Communications Corporation | 128-134 | ||
27. | Proxy Form and Attendance Slip | 135 |
NOTICE
Notice is hereby given that the Eighteenth Annual General Meeting of the Members of Rediff.com India Limited will be held on Monday, September 30, 2013, at 10.00 a.m. (IST) at the Registered Office of the Company situated at First Floor, Mahalaxmi Engineering Estate, L. J. First Cross Road, Mahim (West), Mumbai 400016, to transact the following business:
ORDINARY BUSINESS
1. | To receive, consider and adopt the Audited Balance Sheet as at March 31, 2013 and Profit & Loss Account for the year ended as on that date and the reports of the Auditors and Directors’ thereon. |
2. | To appoint a Director in place of Mr. Sunil Phatarphekar, Director retiring by rotation and being eligible, offers himself for reappointment. |
3. | To appoint a Director in place of Mr. Sridar Iyengar, Director retiring by rotation and being eligible, offers himself for reappointment. |
4. | To appoint Auditors and fix their remuneration by passing the following resolution as an Ordinary Resolution with or without modification(s); |
“RESOLVED that M/s Deloitte Haskins & Sells, Chartered Accountants (Reg. no. 117366W), Mumbai be and are hereby re-appointed as Statutory Auditors of Rediff.com India Limited and to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting at a remuneration to be decided by the Board of Directors/Audit Committee of the Directors of the Company.”
SPECIAL BUSINESS
5. | To consider and if thought fit, to pass with or without modification, the following resolution as Ordinary resolutions: |
“RESOLVED THAT pursuant to the provisions of Section 269 read with Schedule XIII and any other applicable provisions of the Companies Act, 1956, including any statutory modification or re- enactment thereof, the approval of the members be and is hereby accorded for the re-appointment of Mr. Ajit Balakrishnan as the Managing Director of the Company for a period of 5 years commencing from 22nd August, 2013 on the same terms and conditions as set out in the draft agreement the details of which are specified in the Explanatory Statement annexed to the Notice convening this meeting.
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“RESOLVED FURTHER THAT the Board of Directors and the Company Secretary be and are hereby authorized to do all such acts, deeds and things, to execute all such documents, instruments and writings as may be required and to take all such steps as may be necessary, proper and expedient to give effect to the aforesaid resolution.”
By Order of the Board | ||||
For Rediff.com India Limited | ||||
Place: Mumbai | /s/ Jyoti Ravi Sachdeva | |||
Date: September 5, 2013 | Company Secretary and | |||
Head Legal & Govt. affairs |
NOTES:
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF AND SUCH A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXIES TO BE EFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE ANNUAL GENERAL MEETING.
The relative Explanatory Statement pursuant to the provisions of Section 173 of the Companies Act, 1956 for item Nos. 5 is enclosed and forms part of this Notice.
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REDIFF.COM INDIA LIMITED
EXPLANATORY STATEMENT PURSUANT TO THE PROVISIONS OF SECTION
173(2) OF THE COMPANIES ACT, 1956.
Pursuant to the provisions of Section 173(2) of the Companies Act, 1956, the following Explanatory Statement sets out the material facts relating to the item of Special Business mentioned in the accompanying Notice dated 23rd July, 2013 and shall be form part of the Notice
Item No. 5
Mr. Ajit Balakrishnan is the Founder of the Company and has been the Chairman and Managing Director and CEO since inception.
At the annual general meeting held on September 24, 2008, the members of the Company re-appointed Mr. Ajit Balakrishnan as the Chairman and Managing Director for a period of five (5) years w.e.f. 23rd August, 2008. Accordingly, Mr. Balakrishnan holds the office till 22nd August, 2013. The Board of Directors at their meeting held on July 23, 2013 approved the re-appointment of Mr. Balakrishnan as the Managing Director of the Company for a period of five (5) years with effect from August 22, 2013, subject to the approval of the members.
The principal terms and conditions of re-appointment of Mr. Ajit Balakrishnan are as under:
1) | Period of Appointment: 5 years with effect from August 22, 2013. |
2) | Mr. Ajit Balakrishnan shall carry out such duties and exercise such powers as may be entrusted to him from time to time by the Board. |
3) | The Managing Director shall be entitled for the reimbursement of any out-of pocket expenses, travelling and conveyance expenses that may be incurred by the Managing Director in discharge of his duties in terms of this Agreement. |
In compliance with the requirements of the Act, the terms of re-appointment specified above are now placed before the members in the General Meeting for their approval.
This may be treated as an abstract of the draft agreement between the Company and Mr. Ajit Balakrishnan pursuant to Section 302 of the Companies Act, 1956.
The draft agreement between the Company and Mr. Ajit Balakrishnan is available for inspection by the members of the Company at its Registered Office between 11.00 a.m. to 1.00 p.m. on any working day of the Company.
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The Directors, therefore, recommend the passing of the Resolution under Item no.5 of the accompanying Notice.
No Director other than Mr. Ajit Balakrishnan may be considered to be concerned or interested in the passing of this Resolution.
By Order of the Board | ||||
For Rediff.com India Limited | ||||
Place: Mumbai | /s/ Jyoti Ravi Sachdeva | |||
Date: September 5, 2013 | Company Secretary and | |||
Head Legal & Govt. affairs |
8
REDIFF.COM INDIA LIMITED
DIRECTORS’ REPORT
To,
The Members,
Rediff.com India Limited
Your Directors have pleasure in presenting to you the Eighteenth Annual Report together with the Audited Annual Accounts for the year ended March 31, 2013.
1. | REDIFF.COM INDIA LTD.’S FINANCIAL HIGHLIGHTS |
(a) | Total Revenue:- 856 million (previous year 904 million). |
(b) | Net Profit/ Loss:- After providing for depreciation and amortization of 153 million and exceptional items of 266 million net loss for the year were 540 million (previous year net loss 473 million). |
2. | DIVIDEND |
Your Board does not recommend any dividend.
3. | CORPORATE GOVERNANCE |
The various committees constituted by the Company including the Audit Committee and Compensation Committee have been functioning satisfactorily during the year. The present Board comprises of eminent professionals from various fields, in addition to Chairman and Managing Director who looks after the day to day affairs of the Company.
The composition of the Audit Committee of the Board is as follows:-
Name | Designation in the Committee | |
Sridar Iyengar | Chairman | |
Sunil Phatarphekar | Member | |
Rashesh Shah M. Madhavan Nambiar | Member Member |
The composition of the Compensation Committee of the Board is as follows:-
Name | Designation in the Committee | |
Ajit Balakrishnan | Chairman | |
Arun Nanda | Member | |
Sunil N Phatarphekar | Member |
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REDIFF.COM INDIA LIMITED
4. | FIXED DEPOSITS |
During the year under review, our Company had not accepted any Fixed Deposit from the Public.
5. | DIRECTORS |
In accordance with the provisions of the Companies Act, 1956, Sunil Phatarphekar and Sridar Iyengar, Directors retire by rotation at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
At the annual general meeting held on September 24, 2008, the members of the Company re-appointed Mr. Ajit Balakrishnan for a period of five (5) years w.e.f. 23rd August, 2008. Accordingly, Mr. Balakrishnan held the office till 22nd August, 2013. The Board of Directors at their meeting held on July 23, 2013 approved the re-appointment of Mr. Balakrishnan as the Managing Director of the Company for a period of five (5) years with effect from August 22, 2013, subject to the approval of the members.
6. | PARTICULARS OF EMPLOYEES |
The Company had employees who were in receipt of remuneration of not less than 60 lakhs during the year ended 31st March, 2013 or not less than 5 lakhs per month during any part of the said year. However, as per the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Directors Report being sent to the shareholders does not include this Annexure. Any shareholder interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Company.
7. | AUDITORS |
M/s. Deloitte Haskins & Sells, Chartered Accountants (Reg. no. 117366W), the Statutory Auditors of Company and who hold the office till the conclusion of ensuing Annual General Meeting are eligible to be re-appointed as the Statutory Auditors of the Company till the conclusion of next Annual General Meeting. The Company has received from the Auditors undertaking their eligibility to accept the office, if reappointed. The members are requested to consider their re-appointment as set out in the Notice convening the Annual General Meeting.
The observations made by the Auditors’ in their report and notes to accounts are self- explanatory and do not call for any further comments.
8. | DIRECTORS’ RESPONSIBILITY STATEMENT |
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:
a) | In the preparation of the annual accounts, the applicable accounting standards had been followed along-with proper explanation relating to material departures. |
b) | The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year on March 31, 2013 and of the loss of the company for that period. |
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REDIFF.COM INDIA LIMITED
c) | The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting the frauds and other irregularities. |
d) | The directors had prepared the annual accounts on a going concern basis. |
9. | CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO |
The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is as under:
1. | Conservation of Energy:- |
The operation of your Company is not energy intensive. Adequate measures have however been taken to reduce energy consumption by using energy efficient computer equipments incorporating latest technologies.
2. | Technologies Absorption |
Since technology related to internet portal business is constantly evolving, continuous investments and improvements are being made to the content, community and commerce offerings made to the customers. The investments are classified as deferred revenue expenditure and amortized.
3. | Foreign Exchange Earnings and outgo |
Foreign exchange earned by the Company in the fiscal year ended March 31, 2013 was 29 million (Previous year 21 million) and the foreign exchange outgo in the same period was 66 million (Previous year 78 million).
10. | ACKNOWLEDGEMENTS |
The Directors place on record their appreciation for the dedicated services rendered by the employees of our Company and acknowledge the cooperation extended by our Company’s bankers.
On behalf of Board of Directors | ||||
Place: Mumbai, India | ||||
Date : September 5, 2013 | /s/ Ajit Balakrishnan | |||
Chairman and Managing Director |
11
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF
REDIFF.COM INDIA LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements ofREDIFF.COM INDIA LIMITED(“the Company”), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (“the Act”) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) | in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013; |
(b) | in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and |
(c) | in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. |
Report on Other Legal and Regulatory Requirements
1. | As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. |
2. | As required by Section 227(3) of the Act, we report that: |
(a) | We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. |
(b) | In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. |
(c) | The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. |
(d) | In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act. |
(e) | On the basis of the written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act. |
ForDELOITTE HASKINS & SELLS | ||||
Chartered Accountants | ||||
(Firm Registration No. 117366W) | ||||
/s/ Saira Nainar | ||||
Partner | ||||
(Membership No. 40081) |
MUMBAI, September 5,2013
13
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
(i) | Having regard to the nature of the Company’s business/ activities/ results/ clauses (ii), (viii), (xiii), (xiv) of paragraph 4 of the Order are not applicable to the company. |
(ii) | In respect of its fixed assets: |
(a) | The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. |
(b) | The Company has a program of verification of fixed assets once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, fixed assets were physically verified by the Management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification. |
(c) | The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company. |
(iii) | The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. |
(iv) | In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of services and during the course of the audit we have not observed any continuing failure to correct major weakness in such internal control system. The nature of the Company’s business is such that it does not involve purchase of inventories and sale of goods. |
(v) | To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any contracts or arrangements which are required to be entered in the Register maintained pursuant to Section 301 of the Act. |
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(vi) | According to the information and explanations given to us, the Company has not accepted deposits in terms of provisions of Sections 58A and 58AA or other relevant provisions of the Companies Act, 1956. Therefore, the provisions of paragraph 4 (vi) of the Order are not applicable to the Company. |
(vii) | In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of the business. |
(viii) | According to the information and explanations given to us, in respect of statutory dues: |
(a) | The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. |
(b) | There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable. |
(c) | Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2013 on account of disputes are given below: |
Name of Statute | Nature of Dues | Forum where Dispute is Pending | Period to which the Amount Relates | Amount Involved (Rs.) | ||||
Income-tax Act, 1961 | Income Tax | Refer note below | 2009-10 and 2010-11 | 4,484,908 |
Note: The Company is in the process of filing the appeal with Commissioner of Income Tax (Appeal)
(ix) | The accumulated losses of the Company at the end of the financial year are not more than fifty percent of its net worth (determined before adjusting for accumulated losses) and the Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. |
(x) | In our opinion and according to the information and explanations given to us, there were no dues payable by the Company to financial institutions, banks and debenture holders during the year. |
(xi) | According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. |
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(xii) | In our opinion and according to the information and explanations given to us, during the year the Company has not given any guarantee for loans taken by others from banks and financial institutions. |
(xiii) | According to the information and explanations given to us, the Company has not availed any term loan. |
(xiv) | In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have,prima facie, not been used during the year for long-term investment. |
(xv) | According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year. |
(xvi) | According to the information and explanations given to us, the Company has not issued any debentures during the year. |
(xvii) | According to the information and explanations given to us, during the year the Company has not raised any money through public issue. |
(xviii) | To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year. |
ForDELOITTE HASKINS & SELLS | ||||
Chartered Accountants | ||||
(Firm Registration No. 117366W) | ||||
/s/ Saira Nainar | ||||
Partner | ||||
(Membership No. 40081) |
MUMBAI, September 5,2013
16
REDIFF.COM INDIA LIMITED
Balance Sheet as at March 31, 2013
Note | As at March 31, 2013 | As at March 31, 2012 | ||||||||||
I EQUITY AND LIABILITIES | ||||||||||||
1 Shareholders’ Funds | ||||||||||||
(a) Share Capital | 3 | 74,050,890 | 74,050,890 | |||||||||
(b) Reserves and Surplus | 4 | 1,940,627,976 | 2,469,313,346 | |||||||||
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| |||||||||
2,014,678,866 | 2,543,364,236 | |||||||||||
2 Non—Current Liabilities | ||||||||||||
(a) Other Long Term Liabilities | 5 | 15,653,658 | 12,948,443 | |||||||||
(b) Long—Term Provisions | 6 | 56,804,150 | 47,553,898 | |||||||||
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| |||||||||
72,457,808 | 60,502,341 | |||||||||||
3 Current Liabilities | ||||||||||||
(a) Trade Payables (also refer Note 28) | 197,396,399 | 142,831,002 | ||||||||||
(b) Other Current Liabilities | 7 | 141,244,444 | 162,705,438 | |||||||||
(c) Short—Term Provisions | 8 | 7,444,602 | 6,365,786 | |||||||||
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| |||||||||
346,085,445 | 311,902,226 | |||||||||||
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TOTAL | 2,433,222,119 | 2,915,768,803 | ||||||||||
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II ASSETS | ||||||||||||
1 Non—Current Assets | ||||||||||||
(a) Fixed Assets | 9 | |||||||||||
(i) Tangible Assets | 141,934,911 | 189,823,760 | ||||||||||
(ii) Intangible Assets | 90,371,503 | 82,762,100 | ||||||||||
(iii) Intangible Assets under Development | 46,761,840 | 55,895,954 | ||||||||||
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| |||||||||
279,068,254 | 328,481,814 | |||||||||||
(b) Non—Current Investments | 10 | 68,075,804 | 349,259,409 | |||||||||
(c) Long—Term Loans and Advances | 11 | 789,303,932 | 669,871,869 | |||||||||
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| |||||||||
857,379,736 | 1,019,131,278 | |||||||||||
2 Current Assets | ||||||||||||
(a) Trade Receivables | 12 | 179,922,848 | 282,023,912 | |||||||||
(b) Cash and Cash Equivalents | 13 | 1,075,348,839 | 1,225,820,352 | |||||||||
(c) Short-Term Loans and Advances | 14 | 41,502,442 | 60,311,447 | |||||||||
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| |||||||||
1,296,774,129 | 1,568,155,711 | |||||||||||
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| |||||||||
TOTAL | 2,433,222,119 | 2,915,768,803 | ||||||||||
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IIINOTES FORMING PART OF THE FINANCIAL STATEMENTS | 1-33 |
In terms of our report attached. | For and on behalf of the Board of Directors | |||
ForDeloitte Haskins & Sells | ||||
Chartered Accountants | ||||
/s/ Saira Nainar | /s/ Ajit Balakrishnan | /s/ Sunil Phatarphekar | ||
Partner | Chairman & Managing Director | Director | ||
/s/ Jyoti Ravi Sachdeva | ||||
Company Secretary | ||||
Mumbai, India | Mumbai, India | |||
Date: September 5, 2013 | Date: September 5, 2013 |
17
REDIFF.COM INDIA LIMITED
Statement of Profit and Loss for the Year Ended March 31, 2013
Note | For the year ended March 31, 2013 | For the year ended March 31, 2012 | ||||||||||
I Revenue From Operations | 15 | 673,034,071 | 778,703,520 | |||||||||
II Other Income (Net) | 16 | 183,158,009 | 125,781,805 | |||||||||
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TOTAL REVENUE | 856,192,080 | 904,485,325 | ||||||||||
III Expenses: | ||||||||||||
(a) Employee Benefit Expenses | 17 | 377,620,686 | 360,001,736 | |||||||||
(b) Depreciation and Amortization Expenses | 9 | 153,416,360 | 129,904,528 | |||||||||
(c) Operation and Other Expenses | 18 | 599,027,018 | 663,542,290 | |||||||||
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TOTAL EXPENSES | 1,130,064,064 | 1,153,448,554 | ||||||||||
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IV LOSS BEFORE EXCEPTIONAL ITEMS AND TAX | (273,871,984 | ) | (248,963,229 | ) | ||||||||
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V Exceptional Items | ||||||||||||
(a) Provision for Diminution in Long Term Investment | 31 | 266,183,605 | 224,059,000 | |||||||||
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VI LOSS FOR THE YEAR | (540,055,589 | ) | (473,022,229 | ) | ||||||||
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VII Earnings Per Equity Share (Face Value of 5 each )—Basic and Diluted | (36.47 | ) | (32.02 | ) | ||||||||
VIIINOTES FORMING PART OF THE FINANCIAL STATEMENTS | 1-33 |
In terms of our report attached. | For and on behalf of the Board of Directors | |||
ForDeloitte Haskins & Sells | ||||
Chartered Accountants | ||||
/s/ Saira Nainar | /s/ Ajit Balakrishnan | /s/ Sunil Phatarphekar | ||
Partner | Chairman & Managing Director | Director | ||
/s/ Jyoti Ravi Sachdeva | ||||
Company Secretary | ||||
Mumbai, India | Mumbai, India | |||
Date: September 5, 2013 | Date: September 5, 2013 |
18
REDIFF.COM INDIA LIMITED
Cash Flow Statement for the Year Ended March 31, 2013
For the year ended March 31, 2013 | For the year ended March 31, 2012 | |||||||||||
Cash Flows from Operating Activities | ||||||||||||
(Loss) Before Taxes | (540,055,589 | ) | (473,022,229 | ) | ||||||||
Adjustments for: | ||||||||||||
Depreciation and Amortisation | 153,416,360 | 129,904,528 | ||||||||||
Employee Stock Option Expenses | 11,370,219 | 22,081,783 | ||||||||||
Provision for Diminution in Long Term Investment | 266,183,605 | 224,059,000 | ||||||||||
Interest Income | (110,446,324 | ) | (124,024,315 | ) | ||||||||
Write Back of Provision of Doubtful Receivables | (5,199,050 | ) | — | |||||||||
(Profit) / Loss on Sale of Investment | (64,200,000 | ) | 5,040,000 | |||||||||
(Profit) / Loss on Sale of Fixed Assets | (49,336 | ) | 248,131 | |||||||||
Unrealised Exchange Difference | 837,604 | 3,948,145 | ||||||||||
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Operating Loss Before Working Capital Changes | (288,142,511 | ) | (211,764,957 | ) | ||||||||
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Changes in Working Capital: | ||||||||||||
Trade Receivables | 107,143,361 | 9,549,613 | ||||||||||
Loans and Advances | (1,860,804 | ) | (7,018,081 | ) | ||||||||
Trade Payables, Current Liabilities and Provisions | 33,679,428 | (83,514,579 | ) | |||||||||
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Cash used in Operating Activities | (149,180,526 | ) | (292,748,004 | ) | ||||||||
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Taxes Paid, Net of Refund | (7,854,334 | ) | (1,855,651 | ) | ||||||||
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Net Cash used in Operating Activities (A) | (157,034,860 | ) | (294,603,655 | ) | ||||||||
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Cash Flows From Investing Activities | ||||||||||||
Payments to Acquire Fixed Assets | (94,775,793 | ) | (211,095,796 | ) | ||||||||
Proceeds from Sale of Fixed Assets | 413,962 | 864,022 | ||||||||||
Proceeds from Sale of long term Investment | 79,200,000 | 48,000,000 | ||||||||||
Loan given to Vubites India Pvt Ltd | (61,540,000 | ) | (95,000,000 | ) | ||||||||
Loan given to India aborad publication Inc. | (27,181,146 | ) | (28,106,436 | ) | ||||||||
Interest Income Received | 110,446,324 | 124,102,212 | ||||||||||
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Net Cash used in Investing Activities (B) | 6,563,347 | (161,235,998 | ) | |||||||||
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Cash Flows From Financing Activities | ||||||||||||
Net Proceeds from Issue of Equity Shares | — | 61,310,009 | ||||||||||
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Net Cash used in Financing Activities (C) | — | 61,310,009 | ||||||||||
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Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) | (150,471,513 | ) | (394,529,644 | ) | ||||||||
Cash and Cash Equivalents at the Beginning of the Year | 1,225,820,352 | 1,620,349,996 | ||||||||||
Cash and Cash Equivalents at the End of the Year | 1,075,348,839 | 1,225,820,352 | ||||||||||
Notes | ||||||||||||
Cash and Cash Equivalents Include: | ||||||||||||
Cash on Hand | 5,211 | 11 | ||||||||||
Bank Balances | 1,075,414,260 | 1,225,608,212 | ||||||||||
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Cash and Cash Equivalents | 1,075,419,471 | 1,225,608,223 | ||||||||||
Effect of Exchange Rate Changes | (70,632 | ) | 212,129 | |||||||||
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Cash and Cash Equivalents Restated | 1,075,348,839 | 1,225,820,352 | ||||||||||
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NOTES FORMING PART OF THE FINANCIAL STATEMENTS | 1-33 |
In terms of our report attached. | For and on behalf of the Board of Directors | |||
ForDeloitte Haskins & Sells | ||||
Chartered Accountants | ||||
/s/ Saira Nainar | /s/ Ajit Balakrishnan | /s/ Sunil Phatarphekar | ||
Partner | Chairman & Managing Director | Director | ||
/s/ Jyoti Ravi Sachdeva | ||||
Company Secretary |
19
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
1. | CORPORATE INFORMATION |
Rediff.com India Limited (“Rediff” or “the Company”) is in the business of providing online internet based services, focusing on India and the global Indian community. Its websites consists of matters relevant to Indian interests such as cricket, astrology, matchmaker and movies, content on various matters like news and finance, search facilities, a range of community features such as e-mail, chat, messenger, e-commerce, broadband wireless content and mobile value-added services to mobile phone subscribers in India.
2. | SIGNIFICANT ACCOUNTING POLICIES |
a) | Basis of preparation of financial statements |
The financial statements are prepared under the historical cost convention, on an accrual basis of accounting in accordance with the accounting principles generally accepted in India (‘Indian GAAP’) and comply with the Companies (Accounting Standards) Rules, 2006 (as amended) and relevant provisions of Companies Act, 1956 (‘the Act’).
b) | Use of estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Differences between actual results and estimates are recognised in the periods in which the results materialise or are known.
c) | Revenue recognition |
Revenues comprise of revenues from online advertising and fee based services. Online advertising includes advertisement and sponsorships. Fee based services include e-commerce, subscription services and mobile value-added services. E-commerce revenues primarily comprise of commission earned on sale of items to customers who shop online while subscription services comprise of subscriptions received for using e-mail, matchmaker and other subscriber services. Mobile value-added services include revenues derived from mobile operators based on value added text messages received and sent by mobile subscribers over their mobile phones.
Online advertising
Advertisement and sponsorship income is derived from customers who advertise on the Company’s website or to whom direct links from the Company’s website to their own websites are provided.
Revenue from advertisement and sponsorships is recognised ratably based on the delivery over the contractual period of the advertisement, commencing when the advertisement is placed on the website. Revenues are also derived from sponsor buttons placed in specific areas of the Company’s website, which generally provide users with direct links to sponsor websites. These revenues are recognised ratably over the period in which the advertisement is displayed, provided that no significant Company obligations remain and collection of the resulting receivable is probable. Company obligations may include guarantees of a minimum number of impressions or clicks or leads or times that an advertisement appears in pages viewed by users of the Company’s website. To the extent that minimum guaranteed impressions are not met, the Company defers recognition of the corresponding revenues until the guaranteed impression levels are achieved.
20
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
Fee based services
Online shopping revenue primarily consists of commission from the sale of books, music, apparel, confectionery, gifts and other items to retail customers who shop at the Company’s online store. The Company recognises as revenues the commission earned on these transactions and shipping costs recovered from customers.
Subscription service revenues primarily include income from various paid email, web hosting and other service products that cater to a cross section of the Company’s registered user base. The revenue for subscription based service products is deferred and recognised ratably over the period of subscription.
Subscription revenues are also derived from providing mobile value added services (MVAS) such as e-mail and other related products to mobile phone users. The Company contracts with third party mobile operators for sharing revenues from these services. SMS based revenues are recognised when the service is performed.
d) | Tangible assets, intangibles, depreciation and amortisation |
Tangible Assets
Tangible assets are stated at cost less accumulated depreciation. The Company depreciates tangible assets using the straight-line method, over the estimated useful lives of assets. The estimated useful lives of assets are as follows:
Furniture and fixtures | 10 years | |||
Computer equipment | 3 years | |||
Office equipment | 3 to 10 years | |||
Vehicles | 8 years | |||
Leasehold improvements | 6 years |
The effective rates of depreciation based on the estimated useful life of the tangible assets is higher than the rates as prescribed under Schedule XIV to the Companies Act, 1956.
Individual assets costing less than 5,000 are depreciated in full in the year of acquisition.
Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation. Software includes costs incurred in the operations stage that provides additional functions or features to the Company’s website, accounting and monitoring software. These are amortised over their estimated useful life of one to three years. Maintenance expenses or costs that do not result in new features or functions are expensed as product development costs, when incurred.
21
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
e) | Impairment of assets |
The carrying values of assets of the Company’s cash-generating units are reviewed for impairment annually or more often if there is an indication of decline in value. If any indication of such impairment exists, the recoverable amounts of those assets are estimated and impairment loss is recognised, if the carrying amount of those assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the estimated future cash flows to their present value based on appropriate discount factor.
f) | Investments |
Investments classified as long-term investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of such investments. Cost of investments in wholly owned subsidiaries comprise of purchase cost as increased by legal fees, due diligence fees and other direct expenses connected with such acquisition.
g) | Employee benefits |
(i)Short term
Short term employee benefits are recognised as an expense at the undiscounted amount expected to be paid over the period of services rendered by the employees to the Company.
(ii)Long term
The Company has both defined-contribution and defined-benefit plans.
• | Defined-contribution plans |
These are plans in which the Company pays pre-defined amounts to separate funds. These comprise of contributions to the employees’ provident fund and family pension fund. The Company’s payments to the defined-contribution plans are reported as expenses during the period in which the employees perform the services that the payment covers.
• | Defined-benefit plans |
The obligation for the unfunded defined-benefit gratuity is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gain and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur.
(iii)Other employee benefits
Compensated absences which accrue to employees and which can be carried to future periods but are expected to be encashed or availed in twelve months immediately following the year end are reported as expenses during the year in which the employees perform the services that the benefit covers and the liabilities are reported at the undiscounted amount of the benefits after deducting amounts already paid. Where there are restrictions on availment of encashment of such accrued benefit or where the availment or encashment is otherwise not expected to wholly occur in the next twelve months, the liability on account of the benefit is actuarially determined using the projected unit credit method
22
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
h) | Foreign currency transactions |
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.
Monetary items of assets and liabilities denominated in a foreign currency are translated using the exchange rates prevailing at the date of Balance Sheet. Exchange gains / losses on account of exchange difference either on settlement or translation are recognised in the Statement of Profit and Loss.
Non-monetary items such as investments denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
i) | Stock based compensation |
The Company accounts for compensation expense under the Employee Stock Option schemes using the intrinsic value method as per the Guidance Note “Accounting for Employee Share-based Payments” issued by the Institute of Chartered Accountants of India.
j) | Earnings per share |
Basic earnings per equity share is computed by dividing the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all potential equity shares on account of stock options outstanding. For the purpose of Earnings Per Share calculations, ADRs are converted to equity shares.
k) | Taxes |
Income taxes comprise both current and deferred tax.
Current income tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws. Deferred tax is accounted for by computing the tax effect of timing differences, which arise during the year and reverse in subsequent periods. Deferred tax assets on account of accumulated losses, unabsorbed depreciation and other items are recognised only to the extent that there is virtual certainty of realisation of such assets in future.
23
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and the Company intends to settle the asset and liability on a net basis.
l) | Cash and cash equivalent |
The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
Cash and cash equivalents consist of cash on hand, balances in current accounts, deposits with banks which are unrestricted as to withdrawal and use.
m) | Research and development expenses |
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product’s technological feasibility has been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.
n) | Leases |
Leasing of assets whereby the lessor essentially remains the owner of the asset is classified as operating leases. The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. Any compensation, according to agreement, that the lessee is obliged to pay to the lessor if the leasing contract is terminated prematurely is expensed during the period in which the contract is terminated.
o) | Provisions and Contingencies |
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes to the financial statement. A contingent asset is neither recognized nor disclosed.
24
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
3. | SHARE CAPITAL |
As at March 31, 2013 | As at March 31, 2012 | |||||||||||||||
Number | Number | |||||||||||||||
Authorised | ||||||||||||||||
Equity Shares of 5 each | 24,000,000 | 120,000,000 | 24,000,000 | 120,000,000 | ||||||||||||
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Issued, Subscribed and Fully Paid up | ||||||||||||||||
Equity Shares of 5 each fully paid | 14,810,178 | 74,050,890 | 14,810,178 | 74,050,890 | ||||||||||||
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a. | Reconciliation of shares outstanding at the beginning and at the end of the reporting period: |
As at March 31, 2013 | As at March 31, 2012 | |||||||||||||||
Number | Number | |||||||||||||||
At the beginning of the year | 14,810,178 | 74,050,890 | 14,615,800 | 73,079,000 | ||||||||||||
Shares issued during the year (on account of Stock Options exercised) | — | — | 194,378 | 971,890 | ||||||||||||
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Outstanding at the end of the period | 14,810,178 | 74,050,890 | 14,810,178 | 74,050,890 | ||||||||||||
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b. | Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates: |
As at March 31, 2013 | As at March 31, 2012 | |||||||||||||||
Number | Number | |||||||||||||||
Rediff.com India Limited Employee Trust, a Trust controlled by the Board of the Company. | 1,015,000 | 5,075,000 | 1,015,000 | 5,075,000 | ||||||||||||
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c. | Details of shares held by each shareholder holding more than 5% shares: |
As at March 31, 2013 | As at March 31, 2012 | |||||||||||||||
Name of shareholder | Number | % Holding | Number | % Holding | ||||||||||||
Rediffusion Holdings Private Limited | 2,200,002 | 14.85 | % | 2,200,002 | 14.85 | % | ||||||||||
Draper-India International | — | — | 2,200,002 | 14.85 | % | |||||||||||
Draper International India LP | 2,178,000 | 14.71 | % | — | — | |||||||||||
Edelwiess Finance & Investments Limited. | 1,523,000 | 10.28 | % | 1,523,000 | 10.28 | % | ||||||||||
Diwan Arun Nanda | 1,244,740 | 8.40 | % | 1,244,740 | 8.40 | % | ||||||||||
Ajit Balakrishnan | 1,100,190 | 7.43 | % | 1,100,190 | 7.43 | % | ||||||||||
Rediff.com India Limited Employee Trust | 1,015,000 | 6.85 | % | 1,015,000 | 6.85 | % |
25
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
d. | Terms / rights attached to equity shares: |
In respect of every ordinary share, voting right shall be in the same proportion as the capital paid upon such Ordinary share bears to the total paid up ordinary capital of the company.
Holders of ADRs are not entitled to attend or vote at shareholders meetings. Holders of ADRs may exercise voting rights with respect to ordinary shares represented by ADRs only in accordance with the provisions of the Company’s deposit agreement and Indian Law.
Each ADRs represents one half of an equity share.
4. | RESERVES AND SURPLUS |
Reserves and surplus consist of the following reserves:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Securities premium account | ||||||||
Opening balance | 3,430,862,460 | 3,370,524,341 | ||||||
Addition during the year (On account of Stock Options exercised) | — | 60,338,119 | ||||||
Closing balance | 3,430,862,460 | 3, 430,862,460 | ||||||
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Stock option outstanding account | ||||||||
Opening balance | 116,531,258 | 94,449,475 | ||||||
ESOP Compensation Cost | 11,370,219 | 22,081,783 | ||||||
Closing balance | 127,901,477 | 116,531,258 | ||||||
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(Deficit) in the statement of profit and loss | ||||||||
Opening balance | (1,078,080,372 | ) | (605,058,143 | ) | ||||
Deficit during the year | (540,055,589 | ) | (473,022,229 | ) | ||||
Closing balance | (1,618,135,961 | ) | (1,078,080,372 | ) | ||||
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Total | 1,940,627,976 | 2,469,313,346 | ||||||
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5. | OTHER LONG-TERM LIABILITIES (UNSECURED) |
Other long-term liabilities consist of the followings:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Income received in advance | 11,803,771 | 10,938,653 | ||||||
Deposits from employees | 3,849,887 | 2,009,790 | ||||||
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Total | 15,653,658 | 12,948,443 | ||||||
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26
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
6. | LONG – TERM PROVISIONS |
Long–term provisions consist of following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Provision for employee benefits: | ||||||||
Gratuity (unfunded) | 27,054,202 | 21,713,975 | ||||||
Compensated absence (unfunded) | 29,749,948 | 25,839,923 | ||||||
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Total | 56,804,150 | 47,553,898 | ||||||
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7. | OTHER CURRENT LIABILITIES |
Other current liabilities consist of the followings:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Capital creditors | 11,130,238 | 1,538,606 | ||||||
Advance received from customers | 9,659,003 | 50,461,890 | ||||||
Income received in advance | 55,644,647 | 50,735,433 | ||||||
Other Liabilities | 2,566,118 | 2,269,011 | ||||||
Statutory liabilities | ||||||||
Tax deducted at source Payable | 9,682,865 | 4,970,698 | ||||||
Service Tax Payable | 325,479 | 3,404,410 | ||||||
Others | 2,725,134 | 2,682,055 | ||||||
Other payables to related parties (unsecured): | ||||||||
Rediff.com Inc. | 36,051,903 | 34,017,791 | ||||||
Rediff Holding Inc. | 6,492,621 | 6,111,202 | ||||||
Value Communication Corporation | 6,966,436 | 6,514,342 | ||||||
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Total | 141,244,444 | 162,705,438 | ||||||
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8. | SHORT – TERM PROVISIONS |
Short-term provisions consist of the followings:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Provision for employee benefits: | ||||||||
Gratuity (unfunded) | 2,438,962 | 1,782,747 | ||||||
Compensated absence (unfunded) | 5,005,640 | 4,583,039 | ||||||
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Total | 7,444,602 | 6,365,786 | ||||||
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27
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
9. | FIXED ASSETS |
Fixed assets consist of the followings: (Amount in )
Description | Gross Block as at April 1, 2012 | Additions | Deletions | Gross Block as at March 31, 2013 | Accumulated Depreciation as at April 1, 2012 | Depreciation for the Year | Deletions | Accumulated Depreciation as at March 31, 2013 | Net Block Value as at March 31, 2013 | Net Block Value as at March 31, 2012 | ||||||||||||||||||||||||||||||
Tangible assets | ||||||||||||||||||||||||||||||||||||||||
Furniture and fixture | 20,542,335 | — | — | 20,542,335 | (18,082,676 | ) | (460,322 | ) | — | (18,542,998 | ) | 1,999,337 | 2,459,659 | |||||||||||||||||||||||||||
Computer | 1,368,417,009 | 46,142,770 | (172,741,859 | ) | 1,241,817,920 | (1,205,013,536 | ) | (92,246,351 | ) | 172,643,639 | (1,124,616,248 | ) | 117,201,672 | 163,403,473 | ||||||||||||||||||||||||||
Office equipment | 16,716,016 | 1,079,451 | (407,555 | ) | 17,387,912 | (11,275,355 | ) | (1,391,797 | ) | 392,070 | (12,275,082 | ) | 5,112,830 | 5,440,660 | ||||||||||||||||||||||||||
Vehicle | 13,110,370 | 3,187,793 | (1,013,704 | ) | 15,284,459 | (5,228,910 | ) | (1,809,133 | ) | 762,783 | (6,275,260 | ) | 9,009,199 | 7,881,460 | ||||||||||||||||||||||||||
Leasehold Improvement | 24,990,385 | — | — | 24,990,385 | (14,351,877 | ) | (2,026,635 | ) | — | (16,378,512 | ) | 8,611,873 | 10,638,508 | |||||||||||||||||||||||||||
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Total tangible assets | 1,443,776,115 | 50,410,014 | (174,163,118 | ) | 1,320,023,011 | (1,253,952,354 | ) | (97,934,238 | ) | 173,798,492 | (1,178,088,100 | ) | 141,934,911 | 189,823,760 | ||||||||||||||||||||||||||
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Previous year | 1,326,881,863 | 146,444,529 | (29,550,277 | ) | 1,443,776,115 | (1,187,588,173 | ) | (94,805,303 | ) | 28,441,122 | (1,253,952,354 | ) | 189,823,760 | — | ||||||||||||||||||||||||||
Intangible assets | ||||||||||||||||||||||||||||||||||||||||
Software | 165,347,719 | 63,091,525 | — | 228,439,244 | (82,585,619 | ) | (55,482,122 | ) | — | (138,067,741 | ) | 90,371,503 | 82,762,100 | |||||||||||||||||||||||||||
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Total intangible assets | 165,347,719 | 63,091,525 | — | 228,439,244 | (82,585,619 | ) | (55,482,122 | ) | — | (138,067,741 | ) | 90,371,503 | 82,762,100 | |||||||||||||||||||||||||||
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Previous year | 107,247,350 | 58,100,369 | — | 165,347,719 | (47,486,389 | ) | (35,099,225 | ) | — | (82,585,614 | ) | 82,762,100 | — | |||||||||||||||||||||||||||
Intangible assets under development | — | — | — | — | — | — | — | — | 46,761,840 | 55,895,954 | ||||||||||||||||||||||||||||||
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Grand Total | 1,609,123,834 | 113,501,539 | (174,163,118 | ) | 1,548,462,255 | (1,336,537,973 | ) | (153,416,360 | ) | 173,798,492 | (1,316,155,841 | ) | 279,068,254 | 328,481,814 | ||||||||||||||||||||||||||
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28
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
10. | NON-CURRENT INVESTMENTS |
Non – current investments consists of the following:
Face Value | No | As at March 31, 2013 | As at March 31, 2012 | |||||||||||||
Trade investments | ||||||||||||||||
A- Others, Fully paid equity shares (unquoted) | ||||||||||||||||
Traveljini.com Limited | 10 | 88,350 | 60,300,253 | 60,300,253 | ||||||||||||
Tachyon Technologies Pvt. Ltd. | 10 | 13,177 | 41,700,000 | 41,700,000 | ||||||||||||
Vakow Technologies Pvt. Ltd. | 10 | 500,000 | 5,000,000 | 5,000,000 | ||||||||||||
Imere Technologies Pvt. Ltd. | 10 | 7,857 | — | 15,000,000 | ||||||||||||
BigSlick Infotech Pvt. Ltd. | 1 | 59,230 | 4,000,000 | 4,000,000 | ||||||||||||
|
|
|
| |||||||||||||
111,000,253 | 126,000,253 | |||||||||||||||
|
|
|
| |||||||||||||
B – Wholly Owned Subsidiary Companies, Fully paid equity shares (unquoted) | ||||||||||||||||
Rediff Holding Inc., USA | $ | 0.0001 | 11,066,667 | 1,134,483,000 | 1,134,483,000 | |||||||||||
Value Communication Corporation, USA | | No par value | | 12,000,000 | 340,609,949 | 340,609,949 | ||||||||||
Vubites India Pvt. Ltd. | 1 | 1,000,000 | 13,153,409 | 13,153,409 | ||||||||||||
|
|
|
| |||||||||||||
1,488,246,358 | 1,488,246,358 | |||||||||||||||
|
|
|
| |||||||||||||
Total (A+B) | 1,599,246,611 | 1,614,246,611 | ||||||||||||||
|
|
|
| |||||||||||||
Less Provision for diminution in value of investments | 1,531,170,807 | 1,264,987,202 | ||||||||||||||
|
|
|
| |||||||||||||
Net investments | 68,075,804 | 349,259,409 | ||||||||||||||
|
|
|
|
Book value of unquoted investments (net of provisions for diminution) – 68,075,804. (Previous Year 349,259,409)
29
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
11. | LONG –TERM LOANS AND ADVANCES (Unsecured) |
Long – term loans and advances consists of the following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Considered Good | ||||||||
Rent deposits | 39,987,191 | 27,623,290 | ||||||
Loans to employees | 1,736,658 | 2,589,803 | ||||||
Recoverable taxes (net of provision of 2,075,691 as at March 31, 2012 and 2013) | 154,563,726 | 146,709,392 | ||||||
Prepaid expenses. | 10,180,497 | 15,754,522 | ||||||
Loans and advances to related parties: | ||||||||
Vubites India Pvt. Ltd. | 311,667,416 | 246,879,601 | ||||||
Rediff.com India Ltd. Employee Trust | 201,002,530 | 201,002,530 | ||||||
India Abroad Publication Inc. | 70,165,914 | 29,312,731 | ||||||
|
|
|
| |||||
789,303,932 | 669,871,869 | |||||||
|
|
|
|
12. | TRADE RECEVABLES (Unsecured) |
Trade receivables consist of the following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
(a) Over six months from the date they were due for payments | ||||||||
(i) Considered good | 1,903,991 | 15,868,481 | ||||||
(ii) Considered doubtful | 21,876,674 | 141,874,395 | ||||||
|
|
|
| |||||
23,780,665 | 157,742,876 | |||||||
|
|
|
| |||||
(b) Others | ||||||||
Considered good | 178,018,857 | 266,155,431 | ||||||
|
|
|
| |||||
178,018,857 | 266,155,431 | |||||||
|
|
|
| |||||
Total (a+b) | 201,799,522 | 423,898,307 | ||||||
|
|
|
| |||||
Less: Provision for doubtful debts | 21,876,674 | 141,874,395 | ||||||
|
|
|
| |||||
179,922,848 | 282,023,912 | |||||||
|
|
|
|
30
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
13. | CASH AND CASH EQUIVALENT |
Cash and cash equivalent consist of the following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
(a) Cash and cash equivalents | ||||||||
Balances with banks | ||||||||
In current account | 48,037,231 | 83,485,460 | ||||||
In EEFC account | 3,030,808 | 478,486 | ||||||
Cash on hand | 5,211 | 11 | ||||||
|
|
|
| |||||
51,073,250 | 83,963,957 | |||||||
|
|
|
| |||||
(b) Other | ||||||||
In deposits account | 1,024,275,589 | 1,141,856,395 | ||||||
|
|
|
| |||||
1,024,275,589 | 1,141,856,395 | |||||||
|
|
|
| |||||
Total (a+b) | 1,075,348,839 | 1,225,820,352 | ||||||
|
|
|
|
14. | SHORT-TERM LOANS AND ADVANCES (Unsecured, considered good) |
Short-term loans and advances consist of the following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Supplier advances | 2,627,115 | 2,202,907 | ||||||
Rent deposits | 3,470,000 | 15,008,900 | ||||||
Loan to employees | 2,087,726 | 2,841,938 | ||||||
Prepaid expenses | 33,067,008 | 39,643,679 | ||||||
Other loans and advances | 250,593 | 614,023 | ||||||
|
|
|
| |||||
Total | 41,502,442 | 60,311,447 | ||||||
|
|
|
|
15. | REVENUE FROM OPERATIONS |
Revenue from operations consists of the following:
For the year ended March 31, 2013 | For the year ended March 31, 2012 | |||||||
Online advertising | 452,709,343 | 600,696,790 | ||||||
Fee based services | 220,324,728 | 178,006,730 | ||||||
|
|
|
| |||||
Total | 673,034,071 | 778,703,520 | ||||||
|
|
|
|
31
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
16. | OTHER INCOME (NET) |
Other income (net) consists of the following:
For the year ended March 31, 2013 | For the year ended March 31, 2012 | |||||||
Interest income: | ||||||||
Interest on fixed deposits | 106,201,609 | 124,024,315 | ||||||
Interest on income-tax refund | 4,149,107 | 1,652,586 | ||||||
Interest others | 95,608 | 104,904 | ||||||
Profit on sale of long-term investments | 64,200,000 | — | ||||||
Miscellaneous Income Provision for doubtful debts written back |
| 3,312,635 5,199,050 |
|
| — — |
| ||
|
|
|
| |||||
Total | 183,158,009 | 125,781,805 | ||||||
|
|
|
|
17. | EMPLOYEE BENEFIT EXPENSES |
Employee benefit expenses consist of the following:
For the year ended March 31, 2013 | For the year ended March 31, 2012 | |||||||
Salaries and wages | 338,974,679 | 312,057,334 | ||||||
Contribution to provident fund | 12,799,836 | 12,490,859 | ||||||
Gratuity | 7,434,551 | 4,652,480 | ||||||
ESOP compensation costs | 11,370,219 | 22,081,783 | ||||||
Staff welfare expenses | 7,041,401 | 8,719,280 | ||||||
|
|
|
| |||||
Total | 377,620,686 | 360,001,736 | ||||||
|
|
|
|
32
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
18. | OPERATION AND OTHER EXPENSES |
Operation and other expenses consist of the following:
For the year ended March 31, 2013 | For the year ended March 31, 2012 | |||||||
Content Charges | 18,804,385 | 18,482,546 | ||||||
Domain registration charges | 21,716,779 | 18,609,902 | ||||||
Subscription and SMS based costs | 30,392,528 | 41,449,130 | ||||||
E-Commerce – Courier, Freight & Forward | 64,041,628 | 34,168,168 | ||||||
Bandwidth | 148,522,495 | 171,993,006 | ||||||
Software Usage charges | 28,675,109 | 25,063,307 | ||||||
Product development charges | 24,514,738 | 36,994,255 | ||||||
Advertising | 2,657,840 | 83,818,860 | ||||||
Market support | 41,166,234 | 30,645,253 | ||||||
Rent and amenities | 48,725,211 | 48,187,437 | ||||||
Electricity charges | 8,270,517 | 7,429,503 | ||||||
Telecommunication | 4,329,895 | 4,115,574 | ||||||
Repairs and maintenance: | ||||||||
Computers | 39,024,484 | 31,557,588 | ||||||
Others | 1,263,830 | 1,799,970 | ||||||
Insurance | 19,094,062 | 8,020,438 | ||||||
Travel and conveyance | 32,460,137 | 37,523,268 | ||||||
Rates and taxes | 353,732 | 265,890 | ||||||
Foreign exchange loss | 495,334 | 4,415,676 | ||||||
Bank Charges | 6,697,493 | 3,889,841 | ||||||
Provision for doubtful debts | ||||||||
Write back of provision (114,798,671) | ||||||||
Bad debts written off 114,798,671 | — | — | ||||||
Legal and professional fees | 33,796,435 | 26,832,908 | ||||||
Loss / (Gain) on Sale of Fixed Assets | (92,698 | ) | 248,131 | |||||
Loss on Sale of Long Term Investments | — | 5,040,000 | ||||||
Other Miscellaneous expenses | 24,116,850 | 22,991,639 | ||||||
|
|
|
| |||||
Total | 599,027,018 | 663,542,290 | ||||||
|
|
|
|
33
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
19. | AUDITOR’S REMUNERATION |
2012-13 | 2011-12 | |||||||
(i) For service as auditors | 2,000,000 | 1,500,000 | ||||||
(ii) For taxation matters | 700,000 | 1,200,000 | ||||||
(iii) For other services (US GAAP and SOX) | 7,050,000 | 6,050,000 | ||||||
(iv) For reimbursement of expenses | 34,171 | 90,147 | ||||||
(v) For service tax* | 1,209,324 | 1,070,185 | ||||||
|
|
|
| |||||
10,993,495 | 9,910,332 | |||||||
|
|
|
|
Auditors’ remuneration includes fees of 5 Lacs (2012: 10 Lacs) payable/ paid for professional services to a firm of chartered accountants in which some partners of the firm of statutory auditors are partners.
* | Service tax credit has been availed. |
20. | RETIREMENT BENEFIT PLAN |
Defined – Benefit Plans
The Company offers its employees unfunded defined-benefit plan in the form of gratuity. This plan provides for a lump-sum payment to be made to vested employees at retirement, death or termination of employment. Commitments are actuarially determined at year-end. Actuarial valuation is done based on “Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the Statement of Profit and Loss.
Defined benefit commitments:
2012-13 | 2011-12 | |||||||
Benefit obligation at the beginning of the year | 23,496,722 | 20,732,081 | ||||||
Actuarial (gain) | 1,008,042 | (1,268,229 | ) | |||||
Current service cost | 4,139,798 | 3,992,710 | ||||||
Interest cost | 2,286,710 | 1,927,999 | ||||||
Benefits paid | (1,438,109 | ) | (1,887,839 | ) | ||||
Benefit obligation at the end of the year | 29,493,163 | 23,496,722 |
Expenses on defined benefit plan:
2012-13 | 2011-12 | |||||||
Service cost | 4,139,798 | 3,992,710 | ||||||
Interest cost | 2,286,710 | 1,927,999 | ||||||
Recognised net actuarial (gain) | 1,008,042 | (1,268,229 | ) | |||||
Net gratuity cost | 7,434,550 | 4,652,480 |
34
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
The actuarial calculations used to estimate defined benefit commitments and expenses are based on the following assumptions which if changed, would affect the defined benefit commitment’s size and expense:
2012-13 | 2011-12 | |||
Rate for discounting liabilities | 8.00% | 8.55% | ||
Salary escalation rate | 7.00% | 7.00% | ||
Expected rate of return on assets | 0.00% | 0.00% | ||
Mortality rates | Indian Assured live mortality table (2006-08) | LIC 1994-96 mortality table |
The estimate of future salary increase, considered in the actuarial valuation, take account of inflation, seniority, promotion, and other relevant factors. The above information is certified by the actuary.
Experience adjustment:
2012-13 | 2011-12 | |||||||
Defined benefit obligation | 29,493,164 | 23,496,723 | ||||||
(Deficit) | (29,493,164 | ) | (23,496,723 | ) | ||||
Experience adjustment on plan liabilities | (544,577 | ) | (55,456 | ) |
Defined-Contribution Plans
The Company makes contribution towards provident fund and family pension fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund and pension fund are administered by the Government of India. Under the schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefits. A sum of 12,799,836(Previous Year 12,490,859)has been charged to the revenue account in this respect.
21. | EMPLOYEE STOCK OPTION PLANS (ESOP) |
(a) | 2002 Stock Option Plan (2002 ESOP) |
In January 2002, the Board of directors approved the 2002 Stock Option Plan (“2002 ESOP”) which provide for the grant of incentive stock options and non-statutory stock options to the Company’s employees. All options under these plans are exercisable for the ADRs of the Company. A total of 280,000 of the Company’s equity shares were reserved for issuance pursuant to 2002 ESOP.
35
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
2002 ESOP | ||||||||||||||||
Number of options granted, exercised and forfeited during the year ended March 31, | Options | Weighted average exercise price | Range of exercise price | Weighted average remaining contractual life | ||||||||||||
Options outstanding, beginning of period | 17,750 | |||||||||||||||
Expired | (1,250 | ) | 124 | |||||||||||||
Options outstanding, end of period | 16,500 | 110 to 980 | 5.6 |
Options exercisable as at March 31, 2013, were 8,625 (Weighted average exercise price745).
(b) | 2004 Stock Option Plan (2004 ESOP) |
In June 2004, the Board of directors approved the 2004 Stock Option Plan (“2004 ESOP”) for grant of stock options to the Company’s employees. A total of 358,000 equity shares were reserved for issuance under the plan.
2004 ESOP | ||||||||||||||||
Number of options granted, exercised and forfeited during the year ended March 31, | Options | Weighted average exercise price | Range of exercise price | Weighted average remaining contractual life | ||||||||||||
Options outstanding, beginning of period | 135,487 | |||||||||||||||
Forfeited | (375 | ) | 281 | |||||||||||||
Options outstanding, end of period | 135,112 | 251 to 1,279 | 3.6 |
Options exercisable as at March 31, 2013, were 117,237 (Weighted average exercise price673).
(c) | 2006 Stock Option Plan (2006 ESOP) |
The 2006 Stock Option Plan (“2006 ESOP”) was adopted and approved by the Compensation committee on June 20, 2006 in accordance with the approval granted by shareholders on March 31, 2006. A total of 670,000 equity shares were approved for issuance under the plan.
36
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
2006 ESOP | ||||||||||||||||
Number of options granted, exercised and forfeited during the year ended March 31, | Options | Weighted average exercise price | Range of exercise price | Weighted average remaining contractual life | ||||||||||||
Options outstanding, beginning of period | 516,438 | |||||||||||||||
Forfeited | (10,625 | ) | 286 | |||||||||||||
Options outstanding, end of period | 505,813 | 10 to 1,279 | 5.9 |
Options exercisable as at March 31, 2013, were 363,563 (Weighted average exercise price 533).
(e) | Method used for accounting for share based payment plan: |
The Company has used the intrinsic value method to account for the compensation cost of stock option to employees of the company. Intrinsic value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option. The Company’s equity shares are currently traded on the NASDAQ Global Market in the form of ADRs.
(f) | Fair Value Methodology: |
The fair value of options used to compute pro forma net income and earnings per equity share have been estimated on the date of grant using Black-Scholes model.
2012-13 | 2011-12 | |||||||
Net loss as reported | (540,055,589 | ) | (473,022,229 | ) | ||||
Add: Stock-based employee compensation | 11,370,219 | 22,081,783 | ||||||
Less: Stock- based compensation expenses determined under fair value method (Proforma) # | 41,214,467 | 37,849,478 | ||||||
Proforma net loss | (569,899,837 | ) | (488,789,924 | ) | ||||
Loss per share | ||||||||
Basic – as reported | (36.47 | ) | (32.02 | ) | ||||
– Proforma | (38.48 | ) | (33.08 | ) | ||||
Diluted – as reported | (36.47 | ) | (32.02 | ) | ||||
– Proforma | (38.48 | ) | (33.08 | ) |
# | includes stock based compensation cost in respect of stock options issued prior to implementation of Guidance Note on Accounting for Employee Share-based Payments adopted by the Company with effect from April 1, 2006. |
The key assumptions used in Black-Scholes model for calculating fair value are: risk-free interest rate: 2.04% to 2.77%, expected life: 5.5 to 7 years, expected volatility of shares: 75.88% to 77.61% and expected growth life in dividend: 0 %.
37
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
22. | SEGMENT REPORTING |
The Company operates in a single business segment known as “India Online Business” and hence disclosure of segment information as per Accounting Standard 17 on Segment Reporting has not been presented.
23. | RELATED PARTY DISCLOSURES |
I. | Names and relationships of related parties |
a. | Subsidiary Companies: |
Rediff Holdings, Inc., USA
Value Communications Corporation (“Valucom”), USA
Vubites India Private Limited (“Vubites”)
b. | Indirect subsidiaries: |
Rediff.com, Inc., USA
India Abroad Publication, Inc.
India in New York Inc.
c. | Associate Companies: |
Tachyon Technology Private Limited (“Tachyon”)
Imere Technology Private Limited (“Imere”) (Till 8th October 2012)
BigSlick Infotech Private Limited (“BigSlick”)
d. | Key Management Personnel: |
Mr. Ajit Balakrishnan Chairman and Managing Director
e. | Enterprise over which key management personnel are able to exercise significant influence: |
Rediff.com India Employee Trust (“ESOP Trust”)
Rediffussion Holdings Private Limited
RDY&R Private Limited (“RDY&R”)
Quintrol Technologies Private Limited
Ajit Balakrishnan Estate and Securities Private Limited
38
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
Transactions with Related Parties during the year and balances outstanding as at March 31, 2013:
Name of the Related party | Transactions | 2012-13 | 2011-12 | |||||||
Value Communications Corporation | Payable as at year end, net | 6,966,436 | 6,514,342 | |||||||
India abroad Publications, Inc. | Expenses incurred and other reimbursements by India Abroad Publication Inc on behalf of the Company | 190,628 | 5,933,436 | |||||||
Expenses incurred and other reimbursements by the Company on behalf of India Abroad Publications, Inc. | 11,675,892 | 8,626,565 | ||||||||
Loan given during the year | 27,181,146 | 38,106,436 | ||||||||
Loans and advances as at year end, net | �� | 70,165,914 | 29,312,731 | |||||||
Rediff.com, Inc. | Payable as at year end | 36,051,903 | 34,017,791 | |||||||
Rediff Holdings, Inc. | Provision for diminution in value of Long Term Investment | 266,183,605 | 224,059,000 | |||||||
Payable as at year end, net | 6,492,621 | 6,111,202 | ||||||||
Vubites India Private Limited | Expenses incurred and other reimbursements by the Company on behalf of Vubites India Private Limited | 3,247,815 | — | |||||||
Loan given during the year (Interest free) | 61,540,000 | 95,000,000 | ||||||||
Loan and advances as at year end | 311,667,416 | 246,879,601 | ||||||||
Tachyon Technologies Limited | Product development expenses capitalised | 52,000,00 | 6,605,000 | |||||||
Payable as at year end | 800,000 | 645,000 | ||||||||
Rediff.com India Ltd Employee Trust | Loan and advances as at year end (Interest free) | 201,002,530 | 201,002,530 |
39
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
24. | OBLIGATION TOWARDS OPERATING LEASES |
The Company leases office space and residential apartments for employees under various operating leases. Operating lease expense that has been included in the determination of the net profit/loss is as follows:
2012-13 | 2011-12 | |||||||
Office Premises | 43,298,367 | 44,172,040 | ||||||
Residential flats for accommodation of employees | 5,426,844 | 4,015,397 | ||||||
|
|
|
| |||||
Total | 48,725,211 | 48,187,437 | ||||||
|
|
|
|
The minimum annual rental commitments under operating leases are as follows:
2012-13 | 2011-12 | |||||||
Not later than one year | 18,023,487 | 21,172,206 | ||||||
Later than one year and not later than five years | 210,000 | 8,580,600 | ||||||
|
|
|
| |||||
Total payments | 18,233,487 | 29,752,806 | ||||||
|
|
|
|
25. | EARNING PER EQUITY SHARES |
2012-13 | 2011-12 | |||||||||
A. | Net (loss) attributable to equity shareholders ( ) | (540,055,589 | ) | (473,022,229 | ) | |||||
B. | Weighted average number of equity shares outstanding during the year | 14,810,178 | 14,773,635 | |||||||
C. | Potentially dilutive equity share equivalents (stock options) | — | — | |||||||
D. | Weighted average number of equity shares and potentially dilutive equity share equivalents outstanding | 14,810,178 | 14,773,635 | |||||||
E. | Nominal value of Equity Shares ( ) | 5.00 | 5.00 | |||||||
Basic Earnings per Share ( ) | (36.47 | ) | (32.02 | ) | ||||||
Diluted Earnings per Share ( ) | (36.47 | ) | (32.02 | ) |
Potentially dilutive shares relating to outstanding employee stock option aggregating 324,027 and 140,247 as at March 31, 2012 and 2013 respectively have been excluded from the computation of diluted earnings per share for these periods as their effect would have been anti-dilutive.
40
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
26. | CONTINGENCIES AND CAPITAL COMMITMENTS |
Contingent liabilities:
During the year ended March 31, 2013 the Company has received demand notice from Income Tax Authorities resulting in a contingent liability of 8,524,108. This is mainly on account of disallowance of payment made for purchase of bandwidth on which tax had not been deducted at source for the assessment years 2010-11 and 2011-12. The Company has paid 4,039,200 under protest and is in the process of filing an appeal with the Commissioner of Income Tax (Appeal).
The Income tax authorities in India have disallowed certain expenses claimed by the Company for certain years which if confirmed by the appellate authorities will be adjusted against the income tax carry forward losses claimed by the Company and not result in outflow of resources embodying economic benefits.
The Company has lodged appropriate proceedings with the relevant income tax authorities and expects to prevail in the appellate proceedings
The Company is also subject to other legal proceedings and claims, which have arisen in the ordinary course of its business. Those actions, when ultimately concluded and determined, will not, in the opinion of management, have a material effect on the results of operations, cash flows or the financial position of the Company.
The Company has not recognized any loss accrual for the litigation disputes as the Company believes that it is probable that it would be successful on resolution of the litigation. The maximum total loss relating to these disputes would be 2,251,040 (previous year 2,251,040) excluding any interest and penalty which amount cannot be reasonably estimated.
Capital Commitments :
2012-13 | 2011-12 | |||||||
Estimated amount of contracts remaining to be executed on capital account and not provided for | 36,738,160 | 51,292,532 |
41
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
27. | DERIVATIVE TRANSACTION |
The Company has not entered in to any derivative transaction during the years ended March 31, 2013 and 2012.
Foreign exchange currency exposures not hedged by derivative instruments are:
2012-13 | 2011-12 | |||||||||||||||||
Sl. | Particulars | Amount $ | Amount | Amount $ | Amount | |||||||||||||
1 | Amount receivable on account of sale of services | 576,290 | 31,386,588 | 267,766 | 13,698,908 | |||||||||||||
2 | Creditors payable on account of foreign currency expenditure | 84,438 | 4,592,508 | 30,849 | 1,578,235 | |||||||||||||
3 | Foreign currency bank balances | 55,825 | 3,030,808 | 9,353 | 478,500 | |||||||||||||
4 | Amount (Payable) / Receivable to subsidiary companies | 538,181 | 29,271,290 | (170,345 | ) | (17,330,604 | ) |
28. | MICRO AND SMALL ENTERPRISES |
The Company has requested its suppliers to confirm the status as to whether they are covered under the Micro, Small and Medium Enterprises Development Act, 2006. The Company has not received intimation from its suppliers under the said Act. In the absence of confirmation from all the suppliers, disclosures, if any relating to amount unpaid as at year end together with interest paid / payable as required under the said Act have not been given.
29. | INCOME IN FOREIGN CURRENCIES |
2012-13 | 2011-12 | |||||||
(i) E-commerce services | 1,424,585 | 1,249,139 | ||||||
(ii) Media, mobile and others services | 27,981,955 | 19,664,414 | ||||||
|
|
|
| |||||
Total | 29,406,540 | 20,913,553 | ||||||
|
|
|
|
42
REDIFF.COM INDIA LIMITED
Notes forming part of the Financial Statements
30. | EXPENDITURE IN FOREIGN CURRENCIES |
Particulars | 2012-13 | 2011-12 | ||||||
(i) Professional charges | 17,476,742 | 10,440,244 | ||||||
(ii) Product development | 4,808,619 | 10,697,934 | ||||||
(iii) Dataline/ internet charges | 8,604,741 | 16,599,776 | ||||||
(iv) Listing fees | 2,091,033 | 1,441,200 | ||||||
(v) Software usage charges | 14,005,397 | 19,923,092 | ||||||
(vi) Purchase of email domains | 16,926,127 | 14,885,239 | ||||||
(vii) Advertising expenses | — | 1,314,545 | ||||||
(viii) Market research | — | 102,139 | ||||||
(ix) Other matters | 2,111,690 | 2,444,337 | ||||||
|
|
|
| |||||
Total | 66,024,349 | 77,848,506 | ||||||
|
|
|
|
31. | INVESTMENT WRITEOFF AND PROVISION FOR DIMINUTION |
During the year ended March 31, 2013, the Company made an impairment provision to recognise the other-than-temporary decline in the value of its long term investment in its subsidiary company Rediff Holding Inc., USA amounting to 266,183,605 (previous year 224,059,000).
32. | DEFERRED TAX ASSET |
The items that could have resulted in deferred tax assets mainly include the net operating loss and unabsorbed depreciation carry-forward, depreciation, retirement benefits and provisions for bad and doubtful debts. Such deferred tax assets have not been recognised since there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.
33. | COMPARATIVES |
These financial statements have been prepared to comply with the Revised Schedule VI of the Companies Act, 1956 and the previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year.
43
Statement pursuant to Section 212 of the Companies Act 1956
relating to the Subsidiary Companies
Rediff Holdings Inc. | Value Communications Corporation | Vubites India Private Ltd. | ||||||||||
A. Name of the Subsidiary | ||||||||||||
B. Financial year of the subsidiary ended on | 31-Mar-2013 | 31-Mar-2013 | 31-Mar-2013 | |||||||||
C. The Company’s interest in the subisidiary on the aforesaid date | ||||||||||||
a) Number of shares held | 11,066,667 | 12,000,000 | 1,000,000 | |||||||||
b) Face Value per share in US dollars | 0.0001 | No par value | Re. 1/- | |||||||||
c) extent of Holding | 100 | % | 100 | % | 100 | % | ||||||
D. The net aggregate of Profits/(losses) of the subsidiary so far it concerns the members of the company | ||||||||||||
a) Not dealt with in the accounts of the company amounted to | ||||||||||||
1. For the Subsidiary’s financial year ended as in “B” above | ||||||||||||
Equivalent to INR* | (82,600,570 | ) | Nil | (110,684,445 | ) | |||||||
2. For the previous financial years of the Subsidiary since it became the Company’s Subsidiary | ||||||||||||
Equivalent to INR* | ||||||||||||
b) Dealt with in the accounts of the company amounted to | ||||||||||||
1. For the Subsidiary’s financial year ended as in “B” above | ||||||||||||
Equivalent to INR* | ||||||||||||
2. For the previous financial years of the Subsidiary since it became the Company’s Subsidiary | ||||||||||||
Equivalent to INR* |
* | Exchange rate used : 1 USD = Rs.54.39 |
Disclaimer:
We have translated the foreign currency amounts in the financial data derived from our Subsidiaries financial statements at the closing rate as on March 31, 2013. The transactions should not be considered as a representation that such foreign currency amounts have been, could have been or could be converted in to Rupees at any particular rate, the rate stated above, or at all
For and on behalf of the Board | ||||
Place: Mumbai, India | /s/ Ajit Balakrishnan | /s/ Sunil Phatarphekar | ||
Date: September 5, 2013 | Chairman & Managing Director | Director | ||
/s/ Jyoti R Sachdeva | ||||
Company Secretary |
44
DIRECTORS’ REPORT
To,
The Members of Vubites India Private Limited
Your Directors are pleased to submit the Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March 2013.
1. | FINANCIAL AND OPERATING RESULTS |
During the year under review, the Company had incurred a loss of 111 million ( 108 million) after providing for depreciation of 60 million (previous year 58 million) and the said loss is carried forward to the next year. The Directors are exploring the avenues of carrying on the business of, inter alia, re-selling and placement of advertising across various media.
2. | DIVIDEND |
Your Directors do not recommend any dividend for the year ended on March 31, 2013.
3. | DEPOSITS |
The Company has not accepted any deposits within the meaning of Section 58A of the Companies Act, 1956 during the year under review.
4. | DIRECTORS |
No director of the Company has been disqualified to be a Director of the Company on account of non compliance with any of the provisions of the Companies Act, 1956.
5. | COMPLIANCE CERTIFICATE |
In accordance with Section 383A of the Companies Act, 1956 and Companies (Compliance Certificate) Rules, 2001, the Company has obtained a Certificate from a Secretary in whole time practice confirming that the Company has complied with all the provisions of the Companies Act, 1956 during the period under review and a copy of such certificate is annexed to this Report.
6. | DIRECTORS’ RESPONSIBILITY STATEMENT |
Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, Directors of your Company wish to state that:
i) | In the preparation of the annual accounts for the year ended on March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures; |
45
ii) | The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the said financial year and of the loss of the Company for the year ended as on that date; |
iii) | The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; |
iv) | The directors have prepared the annual accounts for the financial year ended 31st March 2013 on a going concern basis. |
7. | INFORMATION PURSUANT TO SECTION 217(2B) OF THE COMPANIES ACT, 1956 |
There was no buy back of company’s shares during the financial year in terms of provisions of Section 77A (4) of the Companies Act, 1956.
8. | INFORMATION PURSUANT TO SECTION 217(1)(d) OF THE COMPANIES ACT, 1956 |
There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the balance sheet relates and the date of this report.
9. | INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 |
Information required to be provided under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 in relation to Conservation of Energy and Technology Absorption are currently not applicable to the Company. The details with respect to the Foreign Exchange Earnings and Outgo of the Company for the year ended on 31st March 2013 are given below:
Earnings | : | Nil | ||||
Outgo | : | 2.5 million (previous year 3 million) |
10. | PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 |
There was no employee in the Company during the period under review that is in receipt of remuneration in excess of the limits specified in Section 217(2A) of the Companies Act, 1956.
46
11. | AUDITORS |
M/s. Vivek Mestry and Associates, Chartered Accountants (Reg. no. 115553W), the Statutory Auditors of Company and who hold the office till the conclusion of ensuing Annual General Meeting are eligible to be re-appointed as the Statutory Auditors of the Company till the conclusion of next Annual General Meeting. The Company has received from the Auditors undertaking their eligibility to accept the office, if reappointed. The members are requested to consider their re-appointment as set out in the Notice convening the Annual General Meeting.
The observations made by the Auditors’ in their report and notes to accounts are self- explanatory and do not call for any further comments.
For and on behalf of the Board of Directors | ||||
Place : Mumbai | ||||
Date : September 5, 2013 | ||||
/s/ Swasti Bhowmick | /s/ Ashish Mehrotra | |||
Director | Director |
47
INDEPENDENT AUDITORS’ REPORT
To the Members of
VUBITES INDIA PRIVATE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements ofVUBITES INDIA PRIVATE LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2013, and the Statement of Profit and Loss for the year ended 31st March, 2013 and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
48
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) | in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; and |
b) | in the case of the Statement of Profit and Loss of the loss for the year ended on that date. |
Report on Other Legal and Regulatory Requirements
This report does not include a statement on the matters specified in paragraph 4 of the Companies (Auditors Report) Order, 2003 and amendment thereto by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Department of the Companies Affaires, in terms of Section 227(4A) of the Co. Act, 1956, since in our opinion and according to the information & explanations given to us, the said Order is not applicable to the Company.
As required by section 227(3) of the Act, we report that:
a) | we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; |
b) | in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; |
c) | the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account; |
d) | in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and |
e) | on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. |
For Vivek Mestry & Associates
Chartered Accountants
(Registration no. 115553W)
/s/ Vivek Mestry
Proprietor
Membership No: 49628
Place: Mumbai
Date: September 5, 2013
49
VUBITES INDIA PRIVATE LIMITED
Balance Sheet as at March 31, 2013
(in Rupees)
Particulars | Note No. | As at March 31, 2013 | As at March 31, 2012 | |||||||
A EQUITY AND LIABILITIES | ||||||||||
1 Shareholders’ funds | ||||||||||
(a) Share capital | 3 | 1,000,000 | 1,000,000 | |||||||
(b) Reserves and surplus | 4 | (253,867,040 | ) | (143,182,595 | ) | |||||
|
|
|
| |||||||
(252,867,040 | ) | (142,182,595 | ) | |||||||
2 Non-current liabilities | ||||||||||
Other Long Term Liabilities | 5 | 311,667,416 | 246,879,601 | |||||||
Long-term provisions | 6 | 3,239,463 | 2,739,683 | |||||||
|
|
|
| |||||||
314,906,879 | 249,619,284 | |||||||||
3 Current liabilities | ||||||||||
(a) Trade payables | 7 | 9,157,596 | 13,253,831 | |||||||
(b) Other current liabilities | 8 | 2,789,685 | 645,734 | |||||||
(c) Short-term provisions | 9 | 528,605 | 498,270 | |||||||
|
|
|
| |||||||
12,475,886 | 14,397,835 | |||||||||
|
|
|
| |||||||
TOTAL | 74,515,725 | 121,834,524 | ||||||||
|
|
|
| |||||||
B ASSETS | ||||||||||
1 Non-current assets | ||||||||||
(a) Fixed assets | 10 | |||||||||
(i) Tangible assets | 32,125,417 | 46,393,561 | ||||||||
(ii) Intangible assets | 24,852,932 | 61,549,636 | ||||||||
|
|
|
| |||||||
56,978,349 | 107,943,197 | |||||||||
(b) Long-term loans and advances | 11 | 6,798,229 | 4,394,764 | |||||||
|
|
|
| |||||||
63,776,578 | 112,337,961 | |||||||||
2 Current assets | ||||||||||
(a) Trade receivables | 12 | 1,235,357 | — | |||||||
(b) Cash and cash equivalents | 13 | 3,681,114 | 3,764,183 | |||||||
(c) Short-term loans and advances | 14 | 5,822,676 | 5,732,380 | |||||||
|
|
|
| |||||||
10,739,147 | 9,496,563 | |||||||||
|
|
|
| |||||||
TOTAL | 74,515,725 | 121,834,524 | ||||||||
|
|
|
| |||||||
Significant accounting policies & Notes on financial statements | 1-27 |
In terms of our report attached. | For and on behalf of the Board of Directors | |||
For Vivek Mestry & Associates | For Vubites India Pvt. Ltd | |||
Chartered Accountants | ||||
Registeration no. 115553W | ||||
/s/ Vivek Mestry | ||||
Proprietor | /s/ Swasti Bhowmick | /s/ Ashish Mehrotra | ||
Membership no. 49628 | Director | Director | ||
Mumbai, India | Mumbai, India | |||
Date: September 5, 2013 | Date: September 5, 2013 |
50
VUBITES INDIA PRIVATE LIMITED
Profit and loss statement for the year ended March 31, 2013
(in Rupees)
Particulars | Note No. | For the year ended March 31, 2013 | For the year ended March 31, 2012 | |||||||
1 Revenue from operations | 15 | 9,837,966 | 581,111 | |||||||
2 Other income (net) | 16 | 1,513,670 | 64,565 | |||||||
|
|
|
| |||||||
TOTAL REVENUE | 11,351,636 | 645,676 | ||||||||
|
|
|
| |||||||
3 Expenses: | ||||||||||
(a) Employee benefit expenses | 17 | 32,418,758 | 34,122,872 | |||||||
(b) Depreciation and amortization expenses | 10 | 59,810,277 | 58,049,241 | |||||||
(c) Operation and other expenses | 18 | 29,807,046 | 16,717,303 | |||||||
|
|
|
| |||||||
TOTAL EXPENSES | 122,036,081 | 108,889,416 | ||||||||
|
|
|
| |||||||
4 LOSS FOR BEFORE TAX | (110,684,445 | ) | (108,243,740 | ) | ||||||
|
|
|
| |||||||
Tax Expense | ||||||||||
Current tax expense for prior years | — | — | ||||||||
|
|
|
| |||||||
LOSS FOR THE YEAR | (110,684,445 | ) | (108,243,740 | ) | ||||||
|
|
|
| |||||||
5 Earnings per equity share—Basic and Diluted | 24 | (110.68 | ) | (108.24 | ) | |||||
Significant accounting policies & Notes on financial statements | 1-27 |
In terms of our report attached. | For and on behalf of the Board of Directors | |||
For Vivek Mestry & Associates | For Vubites India Pvt. Ltd | |||
Chartered Accountants | ||||
Registeration no. 115553W | ||||
/s/ Vivek Mestry | ||||
Proprietor | /s/ Swasti Bhowmick | /s/ Ashish Mehrotra | ||
Membership no. 49628 | Director | Director | ||
Mumbai, India | Mumbai, India | |||
Date: September 5, 2013 | Date: September 5, 2013 |
51
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
1. | CORPORATE INFORMATION |
Vubites India Private Limited (“Vubites” or “the Company”) is in the business of providing web-based tools that small merchants, who doesn’t have a media planner can create their media plan without any help and a technology and can use to create low cost TV advertisements of their own, which play on television directly at the local level.
2. | SIGNIFICANT ACCOUNTING POLICIES |
a. | Basis of preparation of financial statements |
The financial statements are prepared as per historical cost convention and in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 1956, and the applicable Accounting Standards referred to in section 211(3C) of the Companies Act, 1956. All income and expenditure having material bearing on the financial statements are recognised on accrual basis.
b. | Use of estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Differences between actual results and estimates are recognised in the periods in which the results materialise or are known.
c. | Revenue recognition |
The Company offers web-based tools that small merchants can use to create low cost TV ads of their own and in mpeg 2 format, which, play on television directly, a tool where the small merchant who doesn’t have a media planner can create their media plan without any help and a technology to insert TV ads at the local level. Revenue is recognised ratably over the period in which the advertisement is displayed, provided that no significant Company obligations remain and collection of the resulting receivable is probable.
d. | Tangible assets, intangibles, depreciation and amortisation |
Tangible Assets
Tangible assets are stated at cost less depreciation. Depreciation on fixed assets other than leasehold improvements is using the straight-line method and in the manner specified under Schedule-XVI of the Companies Act, 1956.
Expenditure on leasehold improvements is amortised equally over a period of lease.
Intangible Assets
Intangible Assets are stated at cost less amortisation. Software includes costs incurred in the operations stage that provides additional functions or features to the Company’s website. These are amortised over their estimated useful life of one to three years. Maintenance expenses or costs that do not result in new features or functions are expensed as product development costs, when incurred.
52
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
e. | Impairment of assets |
The carrying values of assets of the Company’s cash-generating units are reviewed for impairment annually or more often if there is an indication of decline in value. If any indication of such impairment exists, the recoverable amounts of those assets are estimated and impairment loss is recognised, if the carrying amount of those assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the estimated future cash flows to their present value based on appropriate discount factor.
f. | Employee benefits |
(i)Short term
Short term employee benefits are recognised as an expense at the undiscounted amount expected to be paid over the period of services rendered by the employees to the Company.
(ii)Long term
The Company has both defined-contribution and defined-benefit plans.
• | Defined-benefit plans |
The obligation for the unfunded defined-benefit gratuity is calculated as at the balance sheet date by independent actuaries in a manner that distributes expenses over the employees’ working life and fully provided for. These commitments are valued at the present value of the expected future payments, with consideration for calculated future salary increases, using a discount rate corresponding to the interest rate estimated by the actuary having regard to the interest rate on government bonds with a remaining term that is almost equivalent to the average balance working period of employees.
• | Defined-contribution plans |
These are plans in which the Company pays pre-defined amounts to separate funds. These comprise of contributions to the employees’ provident fund and family pension fund. The Company’s payments to the defined-contribution plans are reported as expenses during the period in which the employees perform the services that the payment covers.
(iii)Other employee benefits
Compensated absences which accrue to employees and which can be carried to future periods but are expected to be encashed or availed in twelve months immediately following the year end are reported as expenses during the year in which the employees perform the services that the benefit covers and the liabilities are reported at the undiscounted amount of the benefits after deducting amounts already paid. Where there are restrictions on availment of encashment of such accrued benefit or where the availment or encashment is otherwise not expected to wholly occur in the next twelve months, the liability on account of the benefit is actuarially determined using the projected unit credit method
53
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
g. | Foreign currency transactions |
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.
Monetary items denominated in a foreign currency are translated using the exchange rates prevailing at the date of Balance Sheet. Exchange gains / losses on account of exchange difference either on settlement or translation are recognised in Profit and Loss Statement.
h. | Stock based compensation |
The Company accounts for compensation expense under the Employee Stock Option schemes using the intrinsic value method as per the Guidance Note “Accounting for Employee Share-based Payments” issued by the Institute of Chartered Accountants of India.
i. | Earnings per share |
Basic earnings per share is computed by dividing the net profit/loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
j. | Taxes |
Income taxes comprise both current and deferred tax.
Current income tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws. Deferred tax is accounted for by computing the tax effect of timing differences, which arise during the year and reverse in subsequent periods. Deferred tax assets on account of accumulated losses, unabsorbed depreciation and other items are recognised only to the extent that there is virtual certainty of realisation of such assets in future.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and the Company intends to settle the asset and liability on a net basis.
k. | Cash and cash equivalent |
The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
Cash and cash equivalents consist of cash on hand, balances in current accounts, deposits with banks which are unrestricted as to withdrawal and use.
l. | Research and development expenses |
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product’s technological feasibility has been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.
54
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
m. | Leases |
Leasing of assets whereby the lessor essentially remains the owner of the asset is classified as operating leases. The payments made by the Company as lessee in accordance with operational leasing contracts or rental agreements are expensed proportionally during the lease or rental period respectively. Any compensation, according to agreement, that the lessee is obliged to pay to the lessor if the leasing contract is terminated prematurely is expensed during the period in which the contract is terminated.
n. | Provisions and Contingencies |
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes to the financial statement. A contingent asset is neither recognized nor disclosed.
3. | SHARE CAPITAL |
As at march 31, 2013 | As at march 31, 2012 | |||||||||||||||
Number | Number | |||||||||||||||
Authorised | ||||||||||||||||
Equity Shares of Re.1 each | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Issued, Subscribed and Fully Paid up | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Equity Shares of Re.1 each fully paid | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
|
|
|
|
|
|
|
|
a. | Reconciliation of shares outstanding at the beginning and at the end of the reporting period: |
As at march 31, 2013 | As at march 31, 2012 | |||||||||||||||
Number | Number | |||||||||||||||
Shares outstanding at the beginning and end of the year | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding at the end of the year | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
|
|
|
|
|
|
|
|
55
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
b. | Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates: |
As at march 31, 2013 | As at march 31, 2012 | |||||||||||||||
Number | Number | |||||||||||||||
Rediff.com India Ltd. (Holding company) | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
|
|
|
|
|
|
|
|
c. | Shares held by each shareholder holding more than 5% shares: |
As at march 31, 2013 | As at march 31, 2012 | |||||||||||||||
No of Shares Held | % of Holding | No of Shares Held | % of Holding | |||||||||||||
Rediff.com India Ltd. | 1,000,000 | 100 | % | 1,000,000 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
4. | RESERVES AND SURPLUS |
Reserves and surplus consist of the following reserves:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Statement of Profit & Loss | ||||||||
Opening balance | (143,182,595 | ) | (34,938,855 | ) | ||||
Deficit during the year | (110,684,445 | ) | (108,243,740 | ) | ||||
Closing balance | (253,867,040 | ) | (143,182,595 | ) | ||||
|
|
|
| |||||
Total | (253,867,040 | ) | (143,182,595 | ) | ||||
|
|
|
|
5. | OTHER LONG TERM LIABILITIES |
Other Long Term Liabilities consist of following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Other payable to related party (Unsecured) | ||||||||
Rediff.com India Limited | 311,667,416 | 246,879,601 | ||||||
|
|
|
| |||||
Total | 311,667,416 | 246,879,601 | ||||||
|
|
|
|
56
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
6. | LONG – TERM PROVISIONS |
Long – Term provisions consist of following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Provision for employee benefits: | ||||||||
Gratuity | 1,254,182 | 813,974 | ||||||
Compensated absence | 1,985,281 | 1,925,709 | ||||||
|
|
|
| |||||
Total | 3,239,463 | 2,739,683 | ||||||
|
|
|
|
7. | TRADE PAYABLES |
Trade Payables consist of following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Trade payables | 9,157,596 | 13,253,831 | ||||||
|
|
|
| |||||
Total | 9,157,596 | 13,253,831 | ||||||
|
|
|
|
8. | OTHER CURRENT LIABILITIES |
Other Current Liabilities consist of the followings:
As at March 31, | As at March 31, | |||||||
2013 | 2012 | |||||||
a) Statutory liabilities | ||||||||
Tax deducted at source Payable | 314,769 | 453,302 | ||||||
Service Tax Payable | 221,676 | 186,407 | ||||||
Others | 15,350 | 6,025 | ||||||
b) Advances from customers | 2,237,890 | — | ||||||
|
|
|
| |||||
Total | 2,789,685 | 645,734 | ||||||
|
|
|
|
9. | SHORT – TERM PROVISIONS |
Short-term provisions consist of the followings:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Provision for employee benefits: | ||||||||
Gratuity | 372,495 | 394,671 | ||||||
Compensated absence | 156,110 | 103,599 | ||||||
|
|
|
| |||||
Total | 528,605 | 498,270 | ||||||
|
|
|
|
57
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
10. | FIXED ASSETS |
Fixed assets consist of the followings: (Amount in )
Description | Gross Block | Depreciation/Amortisation | Net Block | |||||||||||||||||||||||||||||||||||||
As at 01/04/2012 | Additions | Deletions | As at 31/03/2013 | As at 01/04/2012 | Additions | Deletions | As at 31/03/2013 | As at 31/03/2013 | As at 31/03/2012 | |||||||||||||||||||||||||||||||
Tangible assets | ||||||||||||||||||||||||||||||||||||||||
Leasehold Improvements | 1,457,434 | — | — | 1,457,434 | 1,457,434 | — | — | 1,457,434 | — | — | ||||||||||||||||||||||||||||||
Furniture and Fixtures | 320,920 | — | — | 320,920 | 194,077 | 22,951 | — | 217,028 | 103,892 | 126,843 | ||||||||||||||||||||||||||||||
Electrical Fittings | 264,670 | — | — | 264,670 | 139,310 | 26,312 | — | 165,622 | 99,048 | 125,360 | ||||||||||||||||||||||||||||||
Office Equipment | 551,496 | — | — | 551,496 | 250,390 | 52,967 | — | 303,357 | 248,139 | 301,106 | ||||||||||||||||||||||||||||||
Computers | 78,582,927 | 8,714,367 | — | 87,297,294 | 32,742,675 | 22,880,281 | — | 55,622,956 | 31,674,338 | 45,840,252 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total tangible Assets | 81,177,447 | 8,714,367 | — | 89,891,814 | 34,783,886 | 22,982,511 | — | 57,766,397 | 32,125,417 | 46,393,560 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Previous year | 37,774,226 | 43,584,021 | (180,800 | ) | 81,177,447 | 16,545,596 | 18,340,530 | (102,240 | ) | 34,783,886 | 46,393,561 | — | ||||||||||||||||||||||||||||
Intangible assets | ||||||||||||||||||||||||||||||||||||||||
Software | 110,411,392 | 131,062 | — | 110,542,454 | 48,861,756 | 36,827,766 | — | 85,689,522 | 24,852,932 | 61,549,636 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total intangible assets | 110,411,392 | 131,062 | — | 110,542,454 | 48,861,756 | 36,827,766 | — | 85,689,522 | 24,852,932 | 61,549,636 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Previous year | 109,871,190 | 540,202 | — | 110,411,392 | 9,153,045 | 39,708,711 | — | 48,861,756 | 61,549,636 | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Grand Total | 191,588,839 | 8,845,428 | — | 200,434,268 | 83,645,642 | 59,810,277 | — | 143,455,919 | 56,978,349 | 328,481,814 | ||||||||||||||||||||||||||||||
Previous Year |
| 147,645,416 |
|
| 44,124,223 |
|
| (18,0800 | ) |
| 191,588,839 |
|
| 25,689,641 |
|
| 58,049,241 |
|
| (102,240 | ) |
| 83,645,642 |
|
| 107,943,197 |
|
| — |
|
Note: 1) Depreciation for the previous year of 22,27,251/- was Capitalised as Capital Work-in-progress.
58
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
11. | LONG –TERM LOANS AND ADVANCES (Unsecured) |
Long – term loans and advances consists of the following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Unsecured Considered Good | ||||||||
Rent deposits | 950,400 | 1,150,400 | ||||||
Employee Advances | 827,750 | — | ||||||
Prepaid expenses | 11,630 | — | ||||||
Recoverable taxes | 5,008,449 | 3,244,364 | ||||||
|
|
|
| |||||
Total | 6,798,229 | 4,394,764 | ||||||
|
|
|
|
12. | TRADE RECEIVABLES (Unsecured) |
Trade Receivables consists of the following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Unsecured: | ||||||||
a) Debts outstanding for more than six months from the date they are due for payment. | — | — | ||||||
b) Other Debts—Considered Good | 1,235,357 | — | ||||||
|
|
|
| |||||
Total | 1,235,357 | — | ||||||
|
|
|
|
13. | CASH AND BANK BALANCES |
Cash & Bank Balances consists of the following:
As at March 31, | As at March 31, | |||||||
2013 | 2012 | |||||||
(i) Balances with Banks : | ||||||||
In Current Accounts | 3,562,423 | 3,657,484 | ||||||
In Fixed Deposit Accounts | 113,866 | 105,475 | ||||||
(ii) Cash in Hand | 4,825 | 1,224 | ||||||
|
|
|
| |||||
Total | 3,681,114 | 3,764,183 | ||||||
|
|
|
|
Note:
The deposits maintained by the Company with the bank comprise of time deposits, which can be withdrawn by the Company at any time without prior notice or penalty on the principal.
59
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
14. | SHORT TERM LOANS & ADVANCES |
Short Term Loans & Advances consists of the following:
As at March 31, | As at March 31, | |||||||
2013 | 2012 | |||||||
Unsecured considered good : | ||||||||
a) Employee Advances | 678,426 | 37,439 | ||||||
b) Capital advance | 1,187,768 | 5,662,266 | ||||||
c) Advance to vendors | 1,958,213 | — | ||||||
d) Security deposit to vendors | 1,800,000 | — | ||||||
e) Prepaid expenses | 198,269 | 32,675 | ||||||
|
|
|
| |||||
Total | 5,822,676 | 5,732,380 | ||||||
|
|
|
|
15. | REVENUE FROM OPERATIONS: |
Revenue from Operation consists of the following:
As at March 31, 2013 | As at March 31, 2012 | |||||||
Advertising Receipts (Net of Service Tax) | 9,837,966 | 581,111 | ||||||
|
|
|
| |||||
Total | 9,837,966 | 581,111 | ||||||
|
|
|
|
16. | OTHER INCOME |
Other Income consists of the following:
As at March 31, | As at March 31, | |||||||
2013 | 2012 | |||||||
Interest Received | 25,977 | 7,223 | ||||||
Miscellaneous Income | 1,487,693 | 51,602 | ||||||
Profit on Sale of Fixed Assets | — | 5,740 | ||||||
|
|
|
| |||||
Total | 1,513,670 | 64,565 | ||||||
|
|
|
|
60
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
17. | EMPLOYEE BENEFIT EXPENSES |
Employee Benefit Expenses consists of the following:
As at March 31, | As at March 31, | |||||||
2013 | 2012 | |||||||
Salaries and wages | 30,144,337 | 26,358,819 | ||||||
Gratuity | 492,719 | 259,096 | ||||||
ESOP Compensation Costs | — | 6,337,500 | ||||||
Contribution to PF | 1,344,714 | 931,331 | ||||||
Staff welfare | 436,988 | 236,126 | ||||||
|
|
|
| |||||
Total | 32,418,758 | 34,122,872 | ||||||
|
|
|
|
18. | OTHER EXPENSES |
Other Income consists of the following:
As at March 31, | As at March 31, | |||||||
2013 | 2012 | |||||||
Advertisement insertion charges | 15,215,432 | 2,161,902 | ||||||
Bandwidth charges | 792,450 | 1,653,803 | ||||||
Rent and amenities | 2,161,001 | 983,035 | ||||||
Electricity charges | 772,100 | 139,686 | ||||||
Telecommunication | 146,588 | 81,454 | ||||||
Repairs and maintenance | ||||||||
Computer | 359,111 | 239,473 | ||||||
Other | 144,063 | 581,854 | ||||||
Insurance | 65,950 | 57,644 | ||||||
Travel and conveyance | 1,842,395 | 1,198,045 | ||||||
Rates and Taxes | 39,064 | 39,817 | ||||||
Legal and Professional Fees | 4,083,831 | 3,948,544 | ||||||
Commission & Brokerage | 28,000 | 238,616 | ||||||
Office Expenses | 102,060 | — | ||||||
Product Development Charges | 100,000 | — | ||||||
Freight & Forwarding Charges | 133,327 | 385,893 | ||||||
Security Service Charges | 149,561 | 145,991 | ||||||
Consumables—Stores & Spares | 662,699 | 3,114,672 | ||||||
Sundry balances written off | — | 278,121 | ||||||
Virtual Storage / Servers | 1,353,229 | — | ||||||
Office Maintenance | 1,259,398 | — | ||||||
Foreign Exchange Gain / Loss | 150,331 | — | ||||||
Miscellaneous expenses | 246,456 | 1,468,752 | ||||||
|
|
|
| |||||
Total | 29,807,046 | 16,717,303 | ||||||
|
|
|
|
61
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
19. | Expenditure In Foreign Currency (on accrual basis): |
2012-13 | 2011-12 | |||||||
Particulars | ||||||||
Software cards | 2,499,921 | 3,136,387 | ||||||
|
|
|
| |||||
Total | 2,499,921 | 3,136,387 | ||||||
|
|
|
|
20. | Payment to auditors (net of service tax): |
2012-13 | 2011-12 | |||||||
Particulars | ||||||||
a) Statutory audit fees | 100,000 | 100,000 | ||||||
b) Other Services | 4,500 | 12,000 | ||||||
c) Service Tax (*) | 12,916 | 11,536 |
(*) | Service Tax credit has been availed. |
21. | Employee Benefit Obligations |
Defined – Benefit Plans
The Company offers its employees unfunded defined-benefit plan in the form of gratuity. This plan provides for a lump-sum payment to be made to vested employees at retirement, death or termination of employment. Commitments are actuarially determined at year-end. On adoption of the revised Accounting Standard, (AS)-15 on “Employee Benefits” notified under the Companies (Accounting Standards) Rules, 2006, actuarial valuation is done based on “Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the Profit and Loss Statement.
Defined benefit commitments:
2012-13 | 2011-12 | |||||||
Benefit obligation at the beginning of the year | 917,573 | 6,58,477 | ||||||
Actuarial losses | 119,765 | (54,565 | ) | |||||
Current service cost | 275,385 | 242,160 | ||||||
Interest cost | 97,569 | 71,501 | ||||||
Benefit obligation at the end of the year | 14,10,292 | 917,573 |
62
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
Expenses on defined benefit plan:
2012-13 | 2011-12 | |||||||
Service cost | 275,385 | 242,160 | ||||||
Interest cost | 97,569 | 71,501 | ||||||
Recognised net actuarial losses | 119,765 | (54,565 | ) | |||||
Net gratuity cost | 492,719 | 259,096 |
The actuarial calculations used to estimate defined benefit commitments and expenses are based on the following assumptions which if changed, would affect the defined benefit commitment’s size and expense:
2012-13 | 2011-12 | |||
Rate for discounting liabilities | 8.00% | 8.55% | ||
Salary escalation rate | 7.00% | 7.00% | ||
Expected rate of return on assets | 0.00% | 0.0% | ||
Mortality rates | Indian Assured Lives Mortality (2006-08) | LIC 1994-96 mortality table |
The estimate of future salary increase, considered in the actuarial valuation, take account of inflation, seniority, promotion, and other relevant factors. The above information is certified by the actuary.
Experience adjustment:
2012-13 | 2011-12 | |||||||
Defined benefit obligation | 14,10,292 | 917,573 | ||||||
(Deficit) | (14,10,292 | ) | (917,573 | ) | ||||
Experience adjustment on plan liabilities | 34,779 | (1,416 | ) |
22. | Operating leases |
The Company leases office space and residential apartments for employees under various operating leases. Operating lease expense that has been included in the determination of the net profit/loss is as follows:
2012-13 | 2011-12 | |||||||
Particulars | ||||||||
Office Premises | 2,161,001 | 983,035 |
63
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
These lease agreements are executed for a period ranging between 3—60 months with a renewable clause. These lease agreements also provide for termination by mutual consent by giving a prior notice period between 1 – 3 months.
The minimum annual rental commitments under operating leases are as follows:
2012-13 | 2011-12 | |||||||
Particulars | ||||||||
Not later than one year | 288,000 | 438,000 | ||||||
|
|
|
| |||||
Total payments | 288,000 | 438,000 | ||||||
|
|
|
|
23. | Related Parties Disclosures |
I. Names and relationships of related parties
Holding Company:
Rediff.com India Limited
Transactions with Related Parties during the year and balances outstanding as at March 31, 2013:
Name of the Related party | Transactions | 2012-13 | 2011-12 | |||||||
Rediff.com India Limited | Reimbursement of expenses | 3,247,815 | — | |||||||
Loans received during the year | 61,540,000 | 95,000,000 | ||||||||
Payable as at year end | 311,667,416 | 246,879,601 |
24. | Deferred tax assets |
The items that could have resulted in deferred tax assets mainly include the net operating loss and unabsorbed depreciation carry-forward, depreciation, retirement benefits. Such deferred tax assets have not been recognised since there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.
25. | Earnings Per Share (EPS) |
2012-13 | 2011-12 | |||||||||
A. | Net loss attributable to equity shareholders ( ) | 110,684,445 | 1,08,243,740 | |||||||
B. | Weighted average number of equity shares outstanding during the year | 10,00,000 | 10,00,000 | |||||||
C. | Nominal value of Equity Shares ( ) | 1.00 | 1.00 | |||||||
Basic Earning per Share ( ) | (110.68 | ) | (108.24 | ) | ||||||
Diluted Earning per Share ( ) | (110.68 | ) | (108.24 | ) |
64
VUBITES INDIA PRIVATE LIMITED
Notes forming part of the Financial Statements
26. | Amount payable to Micro, Small and Medium Enterprises |
The Company has requested its suppliers to confirm the status as to whether they are covered under the Micro, Small and Medium Enterprises Development Act, 2006. The Company has not received intimation from its suppliers under the said Act. In the absence of confirmation from all the suppliers disclosure, if any relating to amount unpaid as at year end together with interest paid / payable as required under the said Act have not been given.
27. | Comparatives |
Previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year.
65
Rediff Holding Inc.
BOARD OF DIRECTORS
Mr. Ajit Balakrishnan
Mr. Sridhar Iyengar
Mr. Sunil Phatarphekar
AUDITORS
PATKAR & PENDSE
INDIA
DIRECTORS’ REPORT
The Board of Directors present the audited financial statements of Rediff Holding Inc. for the year ended March 31, 2013.
PRINCIPAL ACTIVITIES
Rediff Holding Inc. is a cost center talking care of all corporate related expenditure for the Rediff Group in the USA, and does not generate any revenue.
REVIEW OF BUSINESS
Gross Loss (before provision for diminution) is US $ 412,868/-. After giving effect to other adjustments, net loss of US $ 1,518,672/- was carried to Balance Sheet.
DIVIDENDS
In view of the losses, your Directors do not recommend any dividend.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
/s/ DIRECTOR
Date: September 5, 2013
66
AUDITORS’ REPORT
To
The Board of Directors,
Rediff Holdings Inc.
Report on the Financial Statements
We have audited the accompanying financial statements ofREDIFF HOLDINGS INC., a Company incorporated as a Delaware Corporation in February, 2001 in the United States, (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss account for the year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in the notes to these financial statements. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
(Contd….2)
67
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) | in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; |
and
b) | in the case of the Statement of Profit and Loss of the loss for the year ended on that date; |
Report on Other Legal and Regulatory Requirements
1. | As required by section 227(3) of the Act, we report that: |
a) | we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; |
b) | in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books |
c) | the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account. |
d) | in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in the notes to these financial statements. |
For Patkar & Pendse
Chartered Accountants
(Reg.No. 107824W)
/s/B.M. Pendse
Partner
M.No. 32625
Place:Mumbai
Date: September 5, 2013
68
Rediff Holdings Inc.
Balance Sheet as at 31st March, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
I. EQUITY AND LIABILITIES | ||||||||||||
(1) Shareholder’s Funds | ||||||||||||
(a) Share Capital | 3 | 1,107 | 1,107 | |||||||||
(b) Reserves and Surplus | 4 | 3,033,261 | 4,551,933 | |||||||||
(2) Non Current Liabilities | ||||||||||||
(a) Other Non Current Liabilities | 5 | 6,898,690 | 6,404,163 | |||||||||
(3) Current Liabilities | ||||||||||||
(a) Trade payables | 6 | 100,000 | 101,638 | |||||||||
(b) Short-term provisions | 7 | — | 11,440 | |||||||||
|
|
|
| |||||||||
Total | 10,033,058 | 11,070,281 | ||||||||||
|
|
|
| |||||||||
II. ASSETS | ||||||||||||
(1) Non-current assets | ||||||||||||
(a) Non-current investments | 8 | 6,795,522 | 6,690,536 | |||||||||
(b) long-term loans and advances | 9 | 3,225,711 | 4,346,342 | |||||||||
(2) Current assets | ||||||||||||
(a) Cash and cash equivalents | 10 | 11,825 | 33,403 | |||||||||
|
|
|
| |||||||||
Total | 10,033,058 | 11,070,281 | ||||||||||
|
|
|
|
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
69
Rediff Holdings Inc.
Statement of Profit and Loss for the year ended 31st March, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
I. Revenue from operations | — | — | ||||||||||
|
|
|
| |||||||||
Total Revenue | — | — | ||||||||||
|
|
|
| |||||||||
II. Expenses: | ||||||||||||
Employee benefit expense | 11 | 222,770 | 221,072 | |||||||||
Other expenses | 12 | 190,098 | 397,643 | |||||||||
|
|
|
| |||||||||
Total Expenses | 412,868 | 618,715 | ||||||||||
|
|
|
| |||||||||
III. Loss before exceptional Items & tax | (412,868 | ) | (618,715 | ) | ||||||||
|
|
|
| |||||||||
IV. Exceptional Items | ||||||||||||
Impairment provision for promisory note | 1,100,000 | — | ||||||||||
|
|
|
| |||||||||
V. Loss before tax | (1,512,868 | ) | (618,715 | ) | ||||||||
|
|
|
| |||||||||
VI. Tax expense: | ||||||||||||
Current tax | 5,804 | 8,473 | ||||||||||
|
|
|
| |||||||||
VII. Loss for the period | (1,518,672 | ) | (627,188 | ) | ||||||||
|
|
|
| |||||||||
VIII. Earning per equity share: | ||||||||||||
Basic | (0.14 | ) | (0.06 | ) | ||||||||
Diluted | (0.14 | ) | (0.06 | ) |
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
70
REDIFF HOLDINGS INC.
Notes to Financial Statements for the year ended 31.03.2013
NOTE 1: CORPORATE INFORMATION
Rediff Holdings Inc (“the Company”) was incorporated as a Delaware Corporation in February 2001 by Rediff.Com India Limited to act as the holding company for some of the Parent’s investments in United States.
NOTE 2: ACCOUNTING POLICIES
a. | Basis of preparation of financial statements |
The accompanying financial statements have been prepared under the historical cost convention, in accordance with the accounting principles generally accepted in India (“Indian GAAP”), the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.
b. | Use of estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c. | Revenue recognition |
Rediff Holdings Inc is a cost center taking care of all corporate related expenditure for the Rediff Group in US, and does not generate any revenue.
d. | Fixed assets and depreciation |
Fixed assets are stated at historical cost. The Company depreciates fixed assets using the straight-line method, over the estimated useful lives of assets. The estimated useful lives of assets are as follows:
Computer equipment and software | 3 years | |||
Office equipment | 5 years |
e. | Investments |
Cost of investments in wholly owned subsidiaries comprise of purchase cost as increased by legal fees, due diligence fees and other direct expenses connected with such acquisition. Additional consideration for the acquisition of equity shares payable in subsequent years on the resolution of certain contingencies is debited to the cost of the investments in the year in which the contingent payments crystallize.
A provision for diminution in the value of investments is made in the books of accounts on a decline, other than temporary, in the value of such investments.
71
REDIFF HOLDINGS INC.
Notes to Financial Statements for the year ended 31.03.2013
f. | Employee retirement benefits |
The company has employee retirement benefit plan in which employer merely facilitates the plan administration. Employer does not contribute to the plan.
Leave Encashment
The company’s policies allow leave encashment. Provision has been made in the books for unavailed leave balance at the end of the year.
g. | Foreign currency transactions |
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.
Exchange differences arising on repayment of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed asset. The carrying amount of fixed assets is also adjusted at the end of each financial year for any change in the liability arising out of expressing the related outstanding foreign currency liabilities at the closing rates of exchange prevailing at the date of the Balance Sheet or at the rates specified in the related forward contract.
Monetary items (other than those related to acquisition of fixed assets) denominated in a foreign currency are restated using the exchange rates prevailing at the date of Balance Sheet or rates specified in the related forward contract. Gains / losses arising on restatement and on settlement of such items are recognized in the Profit and Loss Account.
Non-monetary items such as investments denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
h. | Leases |
Operating Lease rentals are expensed with reference to lease terms and conditions.
i. | Deferred Income Taxes |
Deferred Tax is recognized for all timing differences, subject to the consideration of prudence, applying the tax rates that have been subsequently enacted after the Balance Sheet date.
72
Rediff Holdings Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 3: SHARE CAPITAL
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Authorised | ||||||||||||||||
Equity Shares of $0.0001 each | 11,333,000 | 1,133 | 11,333,000 | 1,133 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Issued and Subscribed | ||||||||||||||||
Equity Shares of $0.0001 each | 11,066,667 | 1,107 | 11,066,667 | 1,107 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 11,066,667 | 1,107 | 11,066,667 | 1,107 | ||||||||||||
|
|
|
|
|
|
|
|
3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:
Particulars | Equity Shares | |||||||
Number | Value | |||||||
Shares outstanding at the beginning of the year | 11,066,667 | 1,107 | ||||||
Shares issued during the year | — | — | ||||||
|
|
|
| |||||
Shares outstanding at the end of the year | 11,066,667 | 1,107 | ||||||
|
|
|
|
3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Rediff.com India Ltd. (Holding Company) | 11,066,667 | 1,107 | 11,066,667 | 1,107 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 11,066,667 | 1,107 | 11,066,667 | 1,107 | ||||||||||||
|
|
|
|
|
|
|
|
3.3 Details of shares held by each shareholder holding more than 5% shares:
Name of Shareholder | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
No. of Shares held | % of Holding | No. of Shares held | % of Holding | |||||||||||||
Rediff.com India Ltd. (Holding Company) | 11,066,667 | 100 | % | 11,066,667 | 100 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 11,066,667 | 100 | % | 11,066,667 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
3.4 Terms / rights attached to equity shares
In respect of every ordinary share, voting right shall be in the same proportion as the capital paid upon such Ordinary share bears to the total paid up ordinary capital of the company.
73
Rediff Holdings Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 4: RESERVES AND SURPLUS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
a. Securities Premium Account | ||||||||
Opening Balance | 23,998,893 | 23,998,893 | ||||||
Add : Securities premium credited on Share issue | — | — | ||||||
Less : Premium Utilised for various reasons | — | — | ||||||
|
|
|
| |||||
Closing Balance | 23,998,893 | 23,998,893 | ||||||
|
|
|
| |||||
b. Deficit | ||||||||
Opening balance | (19,446,960 | ) | (18,819,772 | ) | ||||
(+) (Net Loss) For the current year | (1,518,672 | ) | (627,188 | ) | ||||
|
|
|
| |||||
Closing Balance | (20,965,632 | ) | (19,446,960 | ) | ||||
|
|
|
| |||||
Total | 3,033,261 | 4,551,933 | ||||||
|
|
|
|
NOTE 5: OTHER NON CURRENT LIABILITES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Loans and advances from related parties | ||||||||
(Unsecured) | ||||||||
India Abroad Inc. | 3,493,376 | 3,202,850 | ||||||
Rediff.com Inc. | 3,405,314 | 3,201,313 | ||||||
|
|
|
| |||||
Total | 6,898,690 | 6,404,163 | ||||||
|
|
|
|
NOTE 6: TRADE PAYABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Trade payables | 100,000 | 101,638 | ||||||
|
|
|
| |||||
Total | 100,000 | 101,638 | ||||||
|
|
|
|
NOTE 7: SHORT TERM PROVISIONS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Provision for taxation | — | 11,440 | ||||||
Less: Advance tax and Tax deducted at source | — | — | ||||||
|
|
|
| |||||
Total | — | 11,440 | ||||||
|
|
|
|
74
Rediff Holdings Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 8: NON-CURRENT INVESTMENTS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Trade Investments | ||||||||||||||||
Investment in Equity Instruments | ||||||||||||||||
In wholly Owned Subsidiary Companies (Fully Paid-up, Unquoted) | ||||||||||||||||
India Abroad Inc. | 14,751,366 | 14,751,366 | ||||||||||||||
3,198,080 (Previous year 3,198,080) equity shares of $0.01 per share | ||||||||||||||||
Less: Provision for diminution | 10,231,676 | 4,519,690 | 10,231,676 | 4,519,690 | ||||||||||||
|
|
|
| |||||||||||||
Rediff.com Inc. | 870,846 | 870,846 | ||||||||||||||
5,000 (Previous year 5,000) equity shares of $0.001 per share | ||||||||||||||||
Less: Provision for diminution | — | 870,846 | — | 870,846 | ||||||||||||
|
|
|
| |||||||||||||
In Other Companies (Fully Paid-up, Unquoted) | ||||||||||||||||
Runa Inc. | 1,404,986 | 1,300,000 | ||||||||||||||
Less: Provision for diminution | — | 1,404,986 | — | 1,300,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 6,795,522 | 6,690,536 | ||||||||||||||
|
|
|
|
NOTE 9: LONG TERM LOANS AND ADVANCES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Advances recoverable in cash or kind | ||||||||||||||||
Prepaid Expenses | — | — | 20,632 | 20,632 | ||||||||||||
|
|
|
| |||||||||||||
Loans and advances to related parties | ||||||||||||||||
Rediff.com India Ltd. | 548,632 | 548,632 | ||||||||||||||
Value Communication Corporation | 2,677,079 | 3,225,711 | 2,677,078 | 3,225,710 | ||||||||||||
|
|
|
| |||||||||||||
Promissory notes | 1,100,000 | 1,100,000 | ||||||||||||||
Less: Provision for dimination | 1,100,000 | — | — | 1,100,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 3,225,711 | 4,346,342 | ||||||||||||||
|
|
|
|
75
Rediff Holdings Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 10: CASH AND CASH EQUIVALENTS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Balance with Banks—in Current Accounts | ||||||||
In Current accounts | 10,849 | 32,428 | ||||||
In Deposit account | 976 | 975 | ||||||
|
|
|
| |||||
Total | 11,825 | 33,403 | ||||||
|
|
|
|
NOTE 11: EMPLOYEE BENEFIT EXPENSE
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Salaries and Wages | 209,895 | 209,586 | ||||||
Staff Welfare Expenses | 12,875 | 11,486 | ||||||
|
|
|
| |||||
Total | 222,770 | 221,072 | ||||||
|
|
|
|
NOTE 12: OTHER EXPENSES
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Travelling expenses | 5,713 | 43,024 | ||||||
Professional charges | 73,897 | 63,031 | ||||||
Telephone expenses | 3,415 | 3,075 | ||||||
Insurance charges | 32,431 | 220,316 | ||||||
Office expenses | 5,444 | 6,521 | ||||||
Payroll Processing Charges | 3,687 | 3,393 | ||||||
Directors Fee | 65,000 | 49,000 | ||||||
Advertising and Promotion | — | 8,764 | ||||||
Misc Write off/back | — | — | ||||||
Bank Charges | 511 | 519 | ||||||
|
|
|
| |||||
Total | 190,098 | 397,643 | ||||||
|
|
|
|
76
Rediff Holdings Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 13: DIMINUTION IN THE VALUE OF INVESTMENTS
Cost of investments in wholly owned subsidiaries comprise of purchase cost as increased by legal fees, due diligence fees and other direct expenses connected with such acquisition. Additional consideration for the acquisition of equity shares payable in subsequent years on the resolution of certain contingencies is debited to the cost of the investments in the year in which the contingent payments crystallize.
NOTE 14: DEFERRED TAX
As of March 31, 2013, the Company has net operating loss carry forwards of approx $7,126,000 for federal income tax purposes, which expire in the years 2020 to 2032. Realization of the future tax benefits related to the deferred tax income tax asset is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carry forward period. Management has considered these factors and believes that no asset to be created in the books of accounts.
NOTE 15: PRIOR YEAR COMPARATIVES
These financial statements have been prepared to comply with the Revised Schedule VI of the Companies Act, 1956 and the previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year
77
India Abroad Publications Inc.
BOARD OF DIRECTORS
Mr. Ajit Balakrishnan
AUDITORS
PATKAR & PENDSE
INDIA
DIRECTORS’ REPORT
The Board of Directors present the audited financial statements of India Abroad Publications Inc. for the year ended March 31, 2013.
PRINCIPAL ACTIVITIES
India Abroad Publications Inc., a weekly newspaper-publishing Company is a subsidiary of Rediff Holdings Inc., (‘Rediff Holdings’) which in turn is a wholly owned subsidiary of Rediff.com India Limited (‘Rediff.com’).
India Abroad’s revenues primarily include advertising and sponsorship and consumer subscription revenues earned from the publication of its weekly newspaper distributed primarily in the USA & Canada. India Abroad was acquired by Rediff Holdings on April 28, 2001 by acquiring substantially all of the outstanding voting shares of India Abroad Publications, Inc.
REVIEW OF BUSINESS
The Profit & Loss account is set out along with this report and shows that during the year, the Company earned gross income of US $ 2,214,723/-. Gross Loss (before depreciation & amortization) is US $ 882,202 /-. After giving effect to other adjustments, net loss of US $ 894,762/- was carried to Balance Sheet.
DIVIDENDS
In view of the losses, your Directors do not recommend any dividend.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
/s/ DIRECTOR
Date: September 5, 2013
78
AUDITORS’ REPORT
To
The Board of Directors,
India Abroad Publications Inc.
Report on the Financial Statements
We have audited the accompanying financial statements ofINDIA ABROAD PUBLICATIONS INC., a wholly owned subsidiary of Rediff Holdings Inc. and incorporated in the United States, (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss account for the year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in the notes to these financial statements. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
(Contd….2)
79
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) | in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; |
and
b) | in the case of the Statement of Profit and Loss of the loss for the year ended on that date; |
Report on Other Legal and Regulatory Requirements
1. | As required by section 227(3) of the Act, we report that: |
a) | we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; |
b) | in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books |
c) | the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account. |
d) | in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in the notes to these financial statements. |
For Patkar & Pendse
Chartered Accountants
(Reg. No. 107824W)
/s/ B.M. Pendse
Partner
M. No. 32625
Place:Mumbai
Date: September 5, 2013
80
India Abroad Publications, Inc.
Balance Sheet as at March 31, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
I. EQUITY AND LIABILITIES | ||||||||||||
(1) Shareholder’s Funds | ||||||||||||
(a) Share capital | 3 | 31,981 | 31,981 | |||||||||
(b) Reserves and surplus | 4 | (1,016,697 | ) | (121,935 | ) | |||||||
(2) Non Current Liabilities | ||||||||||||
(a) Other Non Current Liabilities | 5 | 4,470,890 | 3,804,790 | |||||||||
(2) Current Liabilities | ||||||||||||
(a) Trade payables | 6 | 687,413 | 607,872 | |||||||||
(b) Other current liabilities | 7 | 51,505 | 58,612 | |||||||||
|
|
|
| |||||||||
Total | 4,225,092 | 4,381,320 | ||||||||||
|
|
|
| |||||||||
II. ASSETS | ||||||||||||
(1) Non-current assets | ||||||||||||
(a) Fixed assets | ||||||||||||
(i) Tangible assets | 8 | 45,061 | 21,349 | |||||||||
(ii) Capital work-in-progress | 33,960 | |||||||||||
(b) Non-current investments | 9 | 129,793 | 129,793 | |||||||||
(2) Long Term Loans & Advances | 10 | 3,499,212 | 3,251,743 | |||||||||
(2) Current assets | ||||||||||||
(a) Trade receivables | 11 | 311,577 | 385,921 | |||||||||
(b) Cash and cash equivalents | 12 | 77,243 | 299,520 | |||||||||
(c) Short-term loans and advances | 13 | 114,244 | 211,072 | |||||||||
(d) Other current assets | 14 | 47,962 | 47,962 | |||||||||
|
|
|
| |||||||||
Total | 4,225,092 | 4,381,320 | ||||||||||
|
|
|
|
In terms of our report attached | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B.M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
81
India Abroad Publications, Inc.
Statement of Profit and Loss for the year ended March 31, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
$ | $ | |||||||||||
I. Revenue from operations | 15 | 2,201,421 | 2,398,614 | |||||||||
II. Other Income | 16 | 13,302 | 347 | |||||||||
|
|
|
| |||||||||
Total Revenue | 2,214,723 | 2,398,961 | ||||||||||
|
|
|
| |||||||||
III. Expenses: | ||||||||||||
Employee benefit expense | 17 | 890,063 | 872,706 | |||||||||
Depreciation and amortization expense | 12,560 | 2,243 | ||||||||||
Other expenses | 18 | 2,206,862 | 2,157,120 | |||||||||
|
|
|
| |||||||||
Total Expenses | 3,109,485 | 3,032,069 | ||||||||||
|
|
|
| |||||||||
IV. Loss for the period | (894,762 | ) | (633,108 | ) | ||||||||
|
|
|
| |||||||||
V. Earnings per equity share: | ||||||||||||
(1) Basic | (0.28 | ) | (0.20 | ) | ||||||||
(2) Diluted | (0.28 | ) | (0.20 | ) |
In terms of our report attached | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B.M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
82
INDIA ABROAD PUBLICATIONS INC.
Notes to Financial Statements for the year ended 31.03.2013
NOTE 1: CORPORATE INFORMATION
India Abroad Publications Inc (“the Company”) was incorporated as a New York Corporation on June 26th, 1970. On April 26, 2001, the Company was acquired by Rediff Holdings Inc, a wholly owned subsidiary of Rediff.Com India Limited.
The Company is one of the leading news publications catering to the Asian-American community focusing on India and the global Indian community.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
a. | Basis of preparation of financial statements |
The accompanying financial statements have been prepared under the historical cost convention, in accordance with the accounting principles generally accepted in India (“Indian GAAP”), the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.
b. | Use of estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c. | Revenue recognition |
Revenues comprise of subscriptions to the India Abroad weekly newspaper publication and income from advertisements.
Revenue from advertisements is recognized upon publishing of the advertisements in the newspaper.
Subscription revenues are derived from the revenues received from newspaper subscribers and is recognized ratably over the period of subscription. Subscriptions received towards lifetime subscribers are shown as deferred revenue and recognized ratably over a 10 years period.
d. | Fixed assets and depreciation |
Fixed assets are stated at historical cost. The Company depreciates fixed assets using the straight-line method, over the estimated useful lives of assets. The estimated useful lives of assets are as follows:
Furniture and fixtures | 7 years | |||
Computer equipment and software | 3 years | |||
Office equipment | 5 years |
e. | Investments |
Cost of investments in wholly owned subsidiaries comprise of purchase cost as increased by legal fees, due diligence fees and other direct expenses connected with such acquisition. Additional consideration for the acquisition of equity shares payable in subsequent years on the resolution of certain contingencies is debited to the cost of the investments in the year in which the contingent payments crystallize.
83
INDIA ABROAD PUBLICATIONS INC.
Notes to Financial Statements for the year ended 31.03.2013
f. | Employee retirement benefits |
The company has employee retirement benefit plan in which employer merely facilitates the plan administration. Employer does not contribute to the plan.
Leave Encashment
The company’s policies allow leave encashment. Provision has been made in the books for unavailed leave balance at the end of the year.
g. | Foreign currency transactions |
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.
Exchange differences arising on repayment of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed asset. The carrying amount of fixed assets is also adjusted at the end of each financial year for any change in the liability arising out of expressing the related outstanding foreign currency liabilities at the closing rates of exchange prevailing at the date of the Balance Sheet or at the rates specified in the related forward contract.
Monetary items (other than those related to acquisition of fixed assets) denominated in a foreign currency are restated using the exchange rates prevailing at the date of Balance Sheet or rates specified in the related forward contract. Gains / losses arising on restatement and on settlement of such items are recognized in the Profit and Loss Account.
Non-monetary items such as investments denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
h. | Income taxes |
Income taxes are accounted for in accordance with US tax laws on Income accrued.
Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws in US. Tax liabilities and provision is accounted for by the Holding company.
i. | Leases |
Operating Lease rentals are expensed with reference to lease terms and conditions.
j. | Contingent Liabilities |
These are disclosed by way of notes to the balance sheet. Provision is made in the accounts in respect of those liabilities, which are likely to materialize after the year-end, till the finalization of accounts and having a material effect on the position stated in the balance sheet.
84
India Abroad Publications, Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 3: SHARE CAPITAL
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Authorised | ||||||||||||||||
Equity Shares of $0.01 each | 6,000,000 | 60,000 | 6,000,000 | 60,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Issued, subscribed and paid up | ||||||||||||||||
Equity Shares of $0.01 each | 3,198,080 | 31,981 | 3,198,080 | 31,981 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 3,198,080 | 31,981 | 3,198,080 | 31,981 | ||||||||||||
|
|
|
|
|
|
|
|
3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:
Particulars | Equity Shares | |||||||
Number | Value | |||||||
Shares outstanding at the beginning and end of the year | 3,198,080 | 31,981 | ||||||
|
|
|
|
3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Rediff Holding Inc. (Holding Company) | 3,198,080 | 31,981 | 3,198,080 | 31,981 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 3,198,080 | 31,981 | 3,198,080 | 31,981 | ||||||||||||
|
|
|
|
|
|
|
|
3.3 Details of shares held by each shareholder holding more than 5% shares:
Name of Shareholder | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
No. of Shares held | % of Holding | No. of Shares held | % of Holding | |||||||||||||
Rediff Holding Inc. (Holding Company) | 3,198,080 | 100 | % | 3,198,080 | 100 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 3,198,080 | 100 | % | 3,198,080 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
3.4 Terms / rights attached to equity shares
In respect of every ordinary share, voting right shall be in the same proportion as the capital paid upon such Ordinary share bears to the total paid up ordinary capital of the company.
85
India Abroad Publications, Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 4: RESERVES AND SURPLUS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
a. Securities Premium Account | ||||||||
Opening Balance | 212,446 | 212,446 | ||||||
Addition during the year | — | — | ||||||
|
|
|
| |||||
Closing Balance | 212,446 | 212,446 | ||||||
|
|
|
| |||||
b. Statement of profit and loss | ||||||||
Opening balance | (334,381 | ) | 298,726 | |||||
Deficit for the year | (894,762 | ) | (633,107 | ) | ||||
|
|
|
| |||||
Closing Balance | (1,229,143 | ) | (334,381 | ) | ||||
|
|
|
| |||||
Total | (1,016,697 | ) | (121,935 | ) | ||||
|
|
|
|
NOTE 5: OTHER NON-CURRENT LIABILITIES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Other payables to related parties: (Unsecured) | ||||||||
Rediff.com India Ltd. | 2,789,692 | 2,341,851 | ||||||
Value Communication Corporation | 68,328 | 68,329 | ||||||
India In New York Inc. | 1,612,870 | 1,394,610 | ||||||
|
|
|
| |||||
Total | 4,470,890 | 3,804,790 | ||||||
|
|
|
|
NOTE 6: TRADE PAYABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Trade Payables | 687,413 | 607,872 | ||||||
|
|
|
| |||||
Total | 687,413 | 607,872 | ||||||
|
|
|
|
NOTE 7: OTHER CURRENT LIABILITIES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Advances from customers | 51,505 | 58,612 | ||||||
|
|
|
| |||||
Total | 51,505 | 58,612 | ||||||
|
|
|
|
86
India Abroad Publications, Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 8: FIXED ASSETS
Fixed Assets | Gross Block | Accumulated Depreciation | Net Block | |||||||||||||||||||||||||||||||||||||||||||||
Balance as at 1 April 2012 | Additions/ (Disposals) | Acquired through business combinations | Revaluations/ (Impairments) | Balance as at 31 March 2013 | Balance as at 1 April 2012 | Depreciation charge for the year | Adjustment due to revaluations | On disposals | Balance as at 31 March 2013 | Balance as at 31 March 2013 | Balance as at 1 April 2012 | |||||||||||||||||||||||||||||||||||||
(i) Tangible Assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Machinery and Equipment | 196,310 | (3,327 | ) | — | 192,983 | 181,094 | 11,745 | — | — | 192,839 | 143 | 15,216 | ||||||||||||||||||||||||||||||||||||
Furniture and fixtures | 43,607 | — | — | — | 43,607 | 37,474 | 594 | — | — | 38,068 | 5,538 | 6,133 | ||||||||||||||||||||||||||||||||||||
Telephone System | 75,564 | — | — | — | 75,564 | 75,564 | — | — | 75,564 | 0 | 0 | |||||||||||||||||||||||||||||||||||||
Office Renovation | 155,796 | — | — | — | 155,796 | 155,796 | — | — | 155,796 | (0 | ) | (0 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Subtotal | 471,277 | — | (3,327 | ) | — | 467,950 | 449,928 | 12,339 | — | — | 462,267 | 5,681 | 21,349 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
(ii) CWIP | 33,960 | 5,420 | — | — | 39,380 | — | — | — | — | — | 39,380 | 33,960 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Subtotal | 33,960 | 5,420 | — | — | 39,380 | — | — | — | — | — | 39,380 | 33,960 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Total | 505,237 | 5,420 | (3,327 | ) | — | 507,330 | 449,928 | 12,339 | — | — | 462,267 | 45,061 | 55,309 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87
India Abroad Publications, Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 9: NON-CURRENT INVESTMENTS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Trade Investments (At Cost) | ||||||||
Investment in Equity Instruments | ||||||||
In wholly-owned Subsidiary Companies (Fully Paid-up, Unquoted) | ||||||||
India Abroad Publications (Canada) Inc. | 104,793 | 104,793 | ||||||
162,974 (P.Y. 162,974) shares of no par value | ||||||||
India in New York Inc. | 25,000 | 25,000 | ||||||
100 (P.Y. 100) shares of no par value | ||||||||
|
|
|
| |||||
Total | 129,793 | 129,793 | ||||||
|
|
|
|
NOTE 10: LONG TERM LOANS AND ADVANCES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Loans and advances to related parties | ||||||||
(Unsecured, Considered good) | ||||||||
Rediff Holding Inc. | 2,717,526 | 2,739,522 | ||||||
India Abroad Publications (Canada) Inc. | 781,686 | 512,221 | ||||||
|
|
|
| |||||
Total | 3,499,212 | 3,251,743 | ||||||
|
|
|
| |||||
Interest free loans payable on demand |
NOTE 11: TRADE RECEIVABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
(Unsecured, Considered good) | ||||||||||||||||
Debts outstanding over six months from the due date of payment | 307,077 | 284,375 | ||||||||||||||
Less: Provision for doubtful debts | 307,077 | — | 284,375 | — | ||||||||||||
|
|
|
| |||||||||||||
Others | 311,576 | 385,921 | ||||||||||||||
Less: Provision for doubtful debts | — | 311,577 | — | 385,921 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 311,577 | 385,921 | ||||||||||||||
|
|
|
|
NOTE 12: CASH AND CASH EQUIVALENTS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Balance with Banks—in Current Accounts | ||||||||
In Current accounts | 77,243 | 299,520 | ||||||
|
|
|
| |||||
Total | 77,243 | 299,520 | ||||||
|
|
|
|
88
India Abroad Publications, Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 13: SHORT TERM LOANS AND ADVANCES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Advances recoverable in cash or kind | ||||||||
(Unsecured, Considered good) | ||||||||
Advances and Deposits | 87,387 | 140,715 | ||||||
Prepaid Expenses | 22,007 | 55,457 | ||||||
Advance to Employees | 4,850 | 14,900 | ||||||
|
|
|
| |||||
Total | 114,244 | 211,072 | ||||||
|
|
|
|
Interest free loans payable on demand
NOTE 14: OTHER CURRENT ASSETS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Unamortised Expenditure | ||||||||
(to the extent not written off or adjusted) | ||||||||
Goodwill for purchase of India Abroad Publications (Canada) Inc. | 47,962 | 47,962 | ||||||
|
|
|
| |||||
Total | 47,962 | 47,962 | ||||||
|
|
|
|
NOTE 15: REVENUE FROM OPERATIONS
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Subscription Income | 236,278 | 237,343 | ||||||
Classified Income | 370,175 | 400,492 | ||||||
Display Income | 1,594,090 | 1,760,708 | ||||||
Retail Sale | 878 | 71 | ||||||
|
|
|
| |||||
Total | 2,201,421 | 2,398,614 | ||||||
|
|
|
|
NOTE 16: OTHER INCOME
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Interest | 188 | 347 | ||||||
Royalty | 5,930 | |||||||
Misc Income | 7,184 | |||||||
|
|
|
| |||||
Total | 13,302 | 347 | ||||||
|
|
|
|
NOTE 17: EMPLOYEE BENEFIT EXPENSE
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Salaries and Allowances | 752,283 | 750,249 | ||||||
Staff Welfare Expenses | 137,780 | 122,457 | ||||||
|
|
|
| |||||
Total | 890,063 | 872,706 | ||||||
|
|
|
|
89
India Abroad Publications, Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 18: OTHER EXPENSES
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Production Expenses | 783,638 | 838,916 | ||||||
Editorial expenses | 131,267 | 147,669 | ||||||
Circulation Expenses | 507,271 | 491,157 | ||||||
Advertising and Promotion | 148,768 | 92,916 | ||||||
Rent | 204,959 | 197,710 | ||||||
IA Person Of the Year Expenses | 142,273 | 166,426 | ||||||
Office Expenses | 53,679 | 66,722 | ||||||
Bank Charges | 58,628 | 44,473 | ||||||
Telephone and Telegrams | 23,683 | 38,643 | ||||||
Electricity Expenses | 20,879 | 20,349 | ||||||
Professional fees | 2,270 | 12,209 | ||||||
Provision for doubtful debts | 22,702 | 27,000 | ||||||
Internet-bandwidth cost | 7,980 | 7,790 | ||||||
Exchange loss | 91,899 | |||||||
Dues and Subscriptions | 6,966 | 5,140 | ||||||
|
|
|
| |||||
Total | 2,206,862 | 2,157,120 | ||||||
|
|
|
|
NOTE 19: OPERATING LEASES
The Company leases office space and a Guest House for employees, under operating leases. Operating lease expense that has been included in the determination of the net profit is as follows:
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Leased Premises | 204,959 | 197,710 | ||||||
|
|
|
| |||||
Total | 204,959 | 197,710 | ||||||
|
|
|
|
NOTE 20: CONTINGENT LIABILITIES AND COMMITMENTS
OTHER CONTINGENCIES
In connection with the Company’s acquisition of India Abroad in April 2001, the Company has been advised by a hold-out shareholder that he believes his shares in India Abroad are worth approximately US$1.2 million. The Company disputes this assertion and has offered the claimant approximately US$50,000 for his shares. The Company does not know if this offer will be acceptable to the shareholder or if the shareholder will file a legal action against the Company if the matter is not resolved.
NOTE 21: EARNINGS IN FOREIGN CURRENCY
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Advertising Revenue | 253,852 | 290,123 | ||||||
|
|
|
| |||||
Total | 253,852 | 290,123 | ||||||
|
|
|
|
NOTE 22: PRIOR YEAR COMPARATIVES
These financial statements have been prepared to comply with the Revised Schedule VI of the Companies Act, 1956 and the previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year
90
India in New York Inc.
BOARD OF DIRECTORS
Mr. Ajit Balakrishnan
AUDITORS
PATKAR & PENDSE
INDIA
DIRECTORS’ REPORT
The Board of Directors present the audited financial statements of India in New York Inc. for the year ended March 31, 2013.
PRINCIPAL ACTIVITIES
India in New York Inc. is a weekly newspaper-publishing unit, which is a wholly owned subsidiary of India Abroad Publications Inc. The Company publishes a free newspaper, distributed in the New York Metropolitan area.
REVIEW OF BUSINESS
The Profit & Loss account is set out along with this report and shows that during the year the Company earned gross income of US$ 111,332/- and the net profit of US $ 111,265/- was carried to Balance Sheet.
DIVIDENDS
With a view to conserve resources, your Directors do not recommend any dividend.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
/s/ DIRECTOR |
Date: September 5, 2013 |
91
AUDITORS’ REPORT
To
The Board of Directors,
India In New York Inc.
Report on the Financial Statements
We have audited the accompanying financial statements ofINDIA IN NEW YORK INC., a wholly owned subsidiary of India Abroad Publications Inc. incorporated in the United States, (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss account for the year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in the notes to these financial statements. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
(Contd….2)
92
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) | in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; |
and
b) | in the case of the Statement of Profit and Loss of the profit for the year ended on that date; |
Report on Other Legal and Regulatory Requirements
1. | As required by section 227(3) of the Act, we report that: |
a) | we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; |
b) | in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books |
c) | the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account. |
d) | in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in the notes to these financial statements. |
For Patkar & Pendse
Chartered Accountants
(Reg.No. 107824W)
/s/ B. M. Pendse
Partner
M.No. 32625
Place:Mumbai
Date: September 5, 2013
93
India In New York, Inc.
Balance Sheet as at March 31, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
I. EQUITY AND LIABILITIES | ||||||||||||
(1) Shareholder’s Funds | ||||||||||||
(a) Share capital | 3 | — | — | |||||||||
(b) Reserves and surplus | 4 | 1,670,763 | 1,559,498 | |||||||||
(2) Current Liabilities | ||||||||||||
(a) Other current liabilities | 5 | 14,546 | 11,477 | |||||||||
|
|
|
| |||||||||
Total | 1,685,309 | 1,570,975 | ||||||||||
|
|
|
| |||||||||
II. ASSETS | ||||||||||||
(1) Non-Current assets | 6 | 1,612,868 | 1,394,610 | |||||||||
(2) Current assets | ||||||||||||
(a) Trade receivables | 7 | 64,704 | 155,491 | |||||||||
(b) Cash and cash equivalents | 8 | 7,737 | 20,874 | |||||||||
|
|
|
| |||||||||
Total | 1,685,309 | 1,570,975 | ||||||||||
|
|
|
|
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B.M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
94
India In New York, Inc.
Statement of Profit and Loss for the year ended March 31, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
I. Revenue from operations | 9 | 111,332 | 189,198 | |||||||||
|
|
|
| |||||||||
Total Revenue | 111,332 | 189,198 | ||||||||||
|
|
|
| |||||||||
II. Expenses: | ||||||||||||
Other expenses | 10 | 67 | — | |||||||||
|
|
|
| |||||||||
Total Expenses | 67 | — | ||||||||||
|
|
|
| |||||||||
III. Profit for the period | 111,265 | 189,198 | ||||||||||
|
|
|
| |||||||||
IV. Earning per equity share: | ||||||||||||
(1) Basic | 1,113 | 1,892 | ||||||||||
(2) Diluted | 1,113 | 1,892 |
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
95
INDIA IN NEW YORK, INC.
Notes to Financial Statements for the year ended 31.03.2013
NOTE 1: CORPORATE INFORMATION
India In New York Inc (“the Company”) was incorporated as a New York Corporation on May 1st 1997. In February 2001, the Company was acquired by Rediff Holdings Inc, a wholly owned subsidiary of Rediff.Com India Limited.
The Company is one of the leading free news publications catering to the Asian- American community focusing on India and the global Indian community.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
a. | Basis of preparation of financial statements |
The accompanying financial statements have been prepared under the historical cost convention, in accordance with the accounting principles generally accepted in India (“Indian GAAP”), the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.
b. | Use of estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c. | Revenue recognition |
Revenues comprise of revenues from advertisements.
Revenue from advertisements is recognized upon publishing of the advertisements in the newspaper.
d. | Foreign currency transactions |
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.
Exchange differences arising on repayment of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed asset. The carrying amount of fixed assets is also adjusted at the end of each financial year for any change in the liability arising out of expressing the related outstanding foreign currency liabilities at the closing rates of exchange prevailing at the date of the Balance Sheet or at the rates specified in the related forward contract.
Monetary items (other than those related to acquisition of fixed assets) denominated in a foreign currency are restated using the exchange rates prevailing at the date of Balance Sheet or rates specified in the related forward contract. Gains / losses arising on restatement and on settlement of such items are recognized in the Profit and Loss Account.
96
INDIA IN NEW YORK, INC.
Notes to Financial Statements for the year ended 31.03.2013
e. | Income taxes |
Income taxes are accounted for in accordance with US tax laws on Income accrued.
Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws in US. Tax liabilities and provision is accounted for by the Holding company.
97
India In New York, Inc.
Notes to Financial Statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 3: SHARE CAPITAL
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Authorised | ||||||||||||||||
Equity Shares of no par value | 200 | — | 200 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Issued and Subscribed | ||||||||||||||||
Equity Shares of no par value | 100 | — | 100 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 100 | — | 100 | — | ||||||||||||
|
|
|
|
|
|
|
|
3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:
Particulars | Equity Shares | |||||||
Number | Value | |||||||
Shares outstanding at the beginning of the year | 100 | — | ||||||
Shares issued during the year | — | — | ||||||
|
|
|
| |||||
Shares outstanding at the end of the year | 100 | — | ||||||
|
|
|
|
3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
India Abroad Inc. (Holding Company) | 100 | — | 100 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 100 | — | 100 | — | ||||||||||||
|
|
|
|
|
|
|
|
3.3 Details of shares held by each shareholder holding more than 5% shares:
Name of Shareholder | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
No. of Shares held | % of Holding | No. of Shares held | % of Holding | |||||||||||||
India Abroad Inc. (Holding Company) | 100 | 100 | % | 100 | 100 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 100 | 100 | % | 100 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
3.4 Terms / rights attached to equity shares
In respect of every ordinary share, voting right shall be in the same proportion as the capital paid upon such Ordinary share bears to the total paid up ordinary capital of the company.
98
India In New York, Inc.
Notes to Financial Statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 4: RESERVES AND SURPLUS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
a. Securities Premium Account | ||||||||
Opening Balance | 25,000 | 25,000 | ||||||
Add : Securities premium credited on Share issue | — | — | ||||||
Less : Premium Utilised for various reasons | — | — | ||||||
|
|
|
| |||||
Closing Balance | 25,000 | 25,000 | ||||||
|
|
|
| |||||
b. Surplus | ||||||||
Opening balance | 1,534,498 | 1,345,300 | ||||||
(+) Net Profit for the current year | 111,265 | 189,198 | ||||||
|
|
|
| |||||
Closing Balance | 1,645,763 | 1,534,498 | ||||||
|
|
|
| |||||
Total | 1,670,763 | 1,559,498 | ||||||
|
|
|
|
NOTE 5: OTHER CURRENT LIABILITIES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Advance from customers | ||||||||
(Unsecured) | 14,546 | 11,477 | ||||||
|
|
|
| |||||
Total | 14,546 | 11,477 | ||||||
|
|
|
|
NOTE 6: LONG TERM LOANS AND ADVANCES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Loans and advances to related parties | ||||||||
(Unsecured, Considered good) | ||||||||
India Abroad Inc. | 1,612,868 | 1,394,610 | ||||||
|
|
|
| |||||
Total | 1,612,868 | 1,394,610 | ||||||
|
|
|
|
NOTE 7: TRADE RECEIVABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
(Unsecured, Considered good) | ||||||||
Debts outstanding over six months from the due date of payment | ||||||||
Others | 64,704 | 155,491 | ||||||
|
|
|
| |||||
Total | 64,704 | 155,491 | ||||||
|
|
|
|
99
India In New York, Inc.
Notes to Financial Statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 8: CASH AND CASH EQUIVALENTS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Balance with Banks—Current accounts | ||||||||
Citibank | 7,737 | 20,874 | ||||||
|
|
|
| |||||
Total | 7,737 | 20,874 | ||||||
|
|
|
|
NOTE 9: REVENUE FROM OPERATIONS
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Display income | 111,332 | 189,198 | ||||||
|
|
|
| |||||
Total | 111,332 | 189,198 | ||||||
|
|
|
|
NOTE 10: OTHER EXPENSES
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Paper and Printing Expenses | 67 | — | ||||||
|
|
|
| |||||
Total | 67 | — | ||||||
|
|
|
|
NOTE 11: PRIOR YEAR COMPARATIVES
These financial statements have been prepared to comply with the Revised Schedule VI of the Companies Act, 1956 and the previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year
100
India Abroad Publications (Canada), Inc.
BOARD OF DIRECTORS
Mr. Ajit Balakrishnan
AUDITORS
PATKAR & PENDSE
INDIA
DIRECTORS’ REPORT
The Board of Directors present the audited financial statements of India Abroad Publications (Canada), Inc. for the year ended March 31, 2013.
PRINCIPAL ACTIVITIES
India Abroad Publications (Canada), Inc. (IA Canada), is a weekly newspaper-publishing unit, which is a wholly owned subsidiary of India Abroad Publications Inc. IA Canada sells advertising space and subscriptions for the India Abroad newspaper in the Canadian Market.
REVIEW OF BUSINESS
The Profit & Loss account is set out along with this report and shows that during the year the Company earned gross income of C$ 68,685/-. Net loss of C$ 257,160/- was carried to Balance Sheet.
DIVIDENDS
In view of the losses, your Directors do not recommend any dividend.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
/s/ DIRECTOR
Date: September 5, 2013
101
AUDITORS’ REPORT
To
The Board of Directors,
India Abroad Publications (Canada) Inc.
Report on the Financial Statements
We have audited the accompanying financial statements ofINDIA ABROAD PUBLICATIONS (CANADA) INC., a Company incorporated in the United States, (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss account for the year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in the notes to these financial statements. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
(Contd….2)
102
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) | in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; |
and
b) | in the case of the Statement of Profit and Loss of the loss for the year ended on that date; |
Report on Other Legal and Regulatory Requirements
1. | As required by section 227(3) of the Act, we report that: |
a) | we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; |
b) | in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books |
c) | the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account. |
d) | in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in the notes to these financial statements. |
For Patkar & Pendse
Chartered Accountants
(Reg.No. 107824W)
/s/ B.M. Pendse
Partner
M.No. 32625
Place:Mumbai
Date: September 5, 2013
103
India Abroad Publications (Canada), Inc.
Balance Sheet as at March 31, 2013
Particulars | Note No | 2012-2013 (C$) | 2011-2012 (C$) | |||||||||
I. EQUITY AND LIABILITIES | ||||||||||||
(1) Shareholder’s Funds | ||||||||||||
(a) Share capital | 3 | — | — | |||||||||
(b) Reserves and surplus | 4 | (724,230 | ) | (467,070 | ) | |||||||
(2) Non Current Liabilities | ||||||||||||
(a) Other Non Current Liabilities | 5 | 666,065 | 397,497 | |||||||||
(2) Current Liabilities | ||||||||||||
(a) Trade payables | 6 | 114,655 | 87,432 | |||||||||
(b) Other current liabilities | 7 | (17,465 | ) | 4,072 | ||||||||
|
|
|
| |||||||||
Total | 39,025 | 21,931 | ||||||||||
|
|
|
| |||||||||
II. ASSETS | ||||||||||||
(1) Non-current assets | ||||||||||||
(a) Fixed assets | ||||||||||||
(i) Tangible assets | 8 | — | — | |||||||||
(2) Current assets | ||||||||||||
(a) Trade receivables | 9 | 7,525 | 14,492 | |||||||||
(b) Cash and cash equivalents | 10 | 31,500 | 7,439 | |||||||||
|
|
|
| |||||||||
Total | 39,025 | 21,931 | ||||||||||
|
|
|
|
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
104
India Abroad Publications (Canada), Inc.
Statement of Profit and Loss for the year ended March 31, 2013
Particulars | Note No | 2012-2013 (C$) | 2011-2012 (C$) | |||||||||
I. Revenue from operations | 11 | 68,685 | 184,698 | |||||||||
|
|
|
| |||||||||
Total Revenue | 68,685 | 184,698 | ||||||||||
|
|
|
| |||||||||
II. Expenses: | ||||||||||||
Employee benefit expense | 12 | 114,210 | 52,538 | |||||||||
Depreciation and amortization expense | 7 | — | 6,818 | |||||||||
Other expenses | 13 | 211,635 | 301,985 | |||||||||
|
|
|
| |||||||||
Total Expenses | 325,845 | 361,341 | ||||||||||
|
|
|
| |||||||||
III. Loss for the period | (257,160 | ) | (176,643 | ) | ||||||||
|
|
|
| |||||||||
IV. Earning per equity share: | ||||||||||||
(1) Basic | (1.58 | ) | (1.08 | ) | ||||||||
(2) Diluted | (1.58 | ) | (1.08 | ) |
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
105
INDIA ABROAD PUBLICATIONS (Canada) INC.
Notes to Financial Statements for the year ended 31.03.2013
NOTE 1: CORPORATE INFORMATION
India Abroad Publications (Canada) Inc (“the Company”) was incorporated in Canada on December 20th, 1983. In February 2001, the Company was acquired by Rediff Holdings Inc, a wholly owned subsidiary of Rediff.Com India Limited.
The Company is one of the leading news publications, catering to the Asian-American community focusing on India and the global Indian community.
NOTE 2: ACCOUNTING POLICIES
a. | Basis of preparation of financial statements |
The accompanying financial statements have been prepared under the historical cost convention, in accordance with the accounting principles generally accepted in India (“Indian GAAP”), the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.
b. | Use of estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c. | Revenue recognition |
Revenues comprise from subscription to the India Abroad weekly news paper and income from advertisements. Revenue from advertisements is recognized upon publishing of the advertisements in the newspaper.
Subscription revenues are derived from the revenues received from the news paper subscribers and is recognized ratably over the period of subscription. Subscriptions received towards lifetime subscribers are shown as deferred revenue and recognized ratably over a 10 year period.
d. | Fixed assets and depreciation |
Fixed assets are stated at historical cost. The Company depreciates fixed assets using the straight-line method, over the estimated useful lives of assets. The estimated useful lives of assets are as follows:
Furniture and fixtures | 7 years | |||
Office equipment | 5 years |
106
INDIA ABROAD PUBLICATIONS (Canada) INC.
Notes to Financial Statements for the year ended 31.03.2013
e. | Employee retirement benefits |
The company does not have any employee retirement benefit plan.
Leave Encashment
The company’s policies does not allow leave encashment and the employees are encouraged to avail the eligible leave. Unavailed leave lapses at the end of the period and hence no provision has been made in the books.
f. | Foreign currency transactions |
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.
Exchange differences arising on repayment of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed asset. The carrying amount of fixed assets is also adjusted at the end of each financial year for any change in the liability arising out of expressing the related outstanding foreign currency liabilities at the closing rates of exchange prevailing at the date of the Balance Sheet or at the rates specified in the related forward contract.
Monetary items (other than those related to acquisition of fixed assets) denominated in a foreign currency are restated using the exchange rates prevailing at the date of Balance Sheet or rates specified in the related forward contract. Gains / losses arising on restatement and on settlement of such items are recognized in the Profit and Loss Account.
g. | Income taxes |
Income taxes are accounted for in accordance with Canadian tax laws on Income accrued and form part of the Holding Company tax liabilities.
Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws in Canada. Tax liabilities and provision is accounted for by the Holding company.
107
India Abroad Publications (Canada), Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in C$)
NOTE 3: SHARE CAPITAL
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Authorised | ||||||||||||||||
Equity Shares of no par value | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Issued and Subscribed | ||||||||||||||||
Equity Shares of no par value | 162,974 | — | 162,974 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 162,974 | — | 162,974 | — | ||||||||||||
|
|
|
|
|
|
|
|
3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:
Particulars | Equity Shares | |||||||
Number | Value | |||||||
Shares outstanding at the beginning of the year | 162,974 | — | ||||||
Shares issued during the year | — | — | ||||||
|
|
|
| |||||
Shares outstanding at the end of the year | 162,974 | — | ||||||
|
|
|
|
3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
India Abroad Inc. (Holding Company) | 162,974 | — | 162,974 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 162,974 | — | 162,974 | — | ||||||||||||
|
|
|
|
|
|
|
|
3.3 Details of shares held by each shareholder holding more than 5% shares:
Name of Shareholder | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
No. of Shares held | % of Holding | No. of Shares held | % of Holding | |||||||||||||
India Abroad Inc. (Holding Company) | 162,974 | 100 | % | 162,974 | 100 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 162,974 | 100 | % | 162,974 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
3.4 Terms / rights attached to equity shares
In respect of every ordinary share, voting right shall be in the same proportion as the capital paid upon such Ordinary share bears to the total paid up ordinary capital of the company.
108
India Abroad Publications (Canada), Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 4: RESERVES AND SURPLUS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
a. Securities Premium Account | ||||||||
Opening Balance | 142,974 | 142,974 | ||||||
Add : Securities premium credited on Share issue | — | — | ||||||
Less : Premium Utilised for various reasons | — | — | ||||||
|
|
|
| |||||
Closing Balance | 142,974 | 142,974 | ||||||
|
|
|
| |||||
b. Deficit | ||||||||
Opening balance | (610,044 | ) | (433,401 | ) | ||||
(+) (Net Loss) For the current year | (257,160 | ) | (176,643 | ) | ||||
|
|
|
| |||||
Closing Balance | (867,204 | ) | (610,044 | ) | ||||
|
|
|
| |||||
Total | (724,230 | ) | (467,070 | ) | ||||
|
|
|
|
NOTE 5: OTHER NON-CURRENT LIABILITIES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Payable to related parties : (Unsecured) | ||||||||
India Abroad Publication inc. | 666,065 | 397,497 | ||||||
|
|
|
| |||||
Total | 666,065 | 397,497 | ||||||
|
|
|
|
NOTE 6: TRADE PAYABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Trade Payables | 114,655 | 87,432 | ||||||
|
|
|
| |||||
Total | 114,655 | 87,432 | ||||||
|
|
|
|
NOTE 7: OTHER CURRENT LIABILITIES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Advances from customers | (17,465 | ) | 2,535 | |||||
Payroll Taxes Payable | — | 1,537 | ||||||
|
|
|
| |||||
— | — | |||||||
|
|
|
| |||||
Total | (17,465 | ) | 4,072 | |||||
|
|
|
|
109
India Abroad Publications (Canada), Inc.
Notes to Financial statements for the year ended March 31, 2012
(Amt. in C$)
NOTE 8: FIXED ASSETS
Fixed Assets | Gross Block | Accumulated Depreciation | Net Block | |||||||||||||||||||||||||||||||||||||||||||
Balance as | Additions/ (Disposals) | Acquired through business combinations | Revaluations/ (Impairments) | Balance as at 31 March 2013 | Balance as at 1 April 2012 | Depreciation charge for the year | Adjustment due to revaluations | On disposals | Balance as at 31 March 2013 | Balance as at 31 March 2013 | Balance as at 1 April 2012 | |||||||||||||||||||||||||||||||||||
Tangible Assets | ||||||||||||||||||||||||||||||||||||||||||||||
Machinery and Equipment | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Furniture and Fixtures | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Total | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Previous year figures | 15,120 | — | — | — | 15,120 | 8,302 | 6,818 | — | — | 15,120 | — | 6,818 | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110
India Abroad Publications (Canada), Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in C$)
NOTE 9: TRADE RECEIVABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
(Unsecured, Considered good) | ||||||||
Debts outstanding over six months from the due date of payment | — | — | ||||||
Others | 7,525 | 14,492 | ||||||
|
|
|
| |||||
Total | 7,525 | 14,492 | ||||||
|
|
|
|
NOTE 10: CASH AND CASH EQUIVALENTS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Balance with Banks | ||||||||
In current accounts | 31,500 | 7,439 | ||||||
|
|
|
| |||||
Total | 31,500 | 7,439 | ||||||
|
|
|
|
NOTE 11: REVENUE FROM OPERATIONS
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Subscription Income | 15,193 | 19,028 | ||||||
Classified Income | 550 | 849 | ||||||
Display Income | 52,584 | 164,821 | ||||||
Retail Sale | 358 | — | ||||||
|
|
|
| |||||
Total | 68,685 | 184,698 | ||||||
|
|
|
|
111
India Abroad Publications (Canada), Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in C$)
NOTE 12: EMPLOYEE BENEFIT EXPENSE
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Salaries and Wages | 114,210 | 52,538 | ||||||
|
|
|
| |||||
Total | 114,210 | 52,538 | ||||||
|
|
|
|
NOTE 13: OTHER EXPENSES
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Printing | 124,904 | 183,695 | ||||||
Circulation Expenses | — | 38,292 | ||||||
Mailing & Distribution | 65,476 | 37,248 | ||||||
Marketing Commission | (3,135 | ) | 14,981 | |||||
Editorial Expenses | 11,654 | 10,644 | ||||||
Office Expenses | 8,061 | 9,125 | ||||||
Bank charges | 25 | 6,386 | ||||||
Telephone Expenses | 1,310 | 1,049 | ||||||
Professional Fees | 2,500 | 565 | ||||||
Miscelleneous Expenses | 840 | — | ||||||
|
|
|
| |||||
Total | 211,635 | 301,985 | ||||||
|
|
|
|
NOTE 14: PRIOR YEAR COMPARATIVES
These financial statements have been prepared to comply with the Revised Schedule VI of the Companies Act, 1956 and the previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year
112
Rediff.com Inc.
BOARD OF DIRECTORS
Mr. Ajit Balakrishnan
AUDITORS
PATKAR & PENDSE
INDIA
DIRECTORS’ REPORT
The Board of Directors present the audited financial statements of Rediff.com Inc. for the year ended March 31, 2013.
PRINCIPAL ACTIVITIES
Rediff.com Inc. is a wholly owned subsidiary of Rediff Holdings Inc. Rediff.com Inc. derives revenue from a website targeted at the Indian American community.
REVIEW OF BUSINESS
The Profit & Loss account is set out along with this report and shows that the Company earned gross income of US $ 744,030/- Gross Profit before taxes is US $ 181,797/-. After giving effect to other adjustments, the net profit of US $ 178,333/- was carried to Balance Sheet.
DIVIDENDS
With the view to conserve resources, your Directors do not recommend any dividend.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
/s/ DIRECTOR
Date: September 5, 2013
113
AUDITORS’ REPORT
To
The Board of Directors,
Rediff.Com Inc.
Report on the Financial Statements
We have audited the accompanying financial statements ofREDIFF.COM INC., a wholly owned subsidiary of Rediff Holdings Inc. incorporated in the United States, (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss account for the year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in the notes to these financial statements. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
(Contd.....2)
114
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) | in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; |
and
b) | in the case of the Statement of Profit and Loss of the profit for the year ended on that date; |
Report on Other Legal and Regulatory Requirements
1. | As required by section 227(3) of the Act, we report that: |
a) | we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; |
b) | in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books |
c) | the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account. |
d) | in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in the notes to these financial statements. |
For Patkar & Pendse
Chartered Accountants
(Reg.No. 107824W)
/s/ B. M. Pendse
Partner
M.No. 32625
Place:Mumbai
Date: September 5, 2013
115
Rediff.com Inc.
Balance Sheet as at March 31, 2013
Particulars | Note No | 2011-2012 (USD) | 2010-2011 (USD) | |||||||||
I. EQUITY AND LIABILITIES | ||||||||||||
(1) Shareholder’s Funds | ||||||||||||
(a) Share Capital | 3 | 5 | 5 | |||||||||
(b) Reserves and Surplus | 4 | 5,847,271 | 5,668,939 | |||||||||
(2) Current Liabilities | ||||||||||||
(a) Trade payables | 5 | 46,000 | 99,017 | |||||||||
(b) Other current liabilities | 6 | — | 58 | |||||||||
|
|
|
| |||||||||
Total | 5,893,276 | 5,768,019 | ||||||||||
|
|
|
| |||||||||
II. ASSETS | ||||||||||||
(1) Non-current assets | ||||||||||||
(a) Fixed assets | ||||||||||||
Tangible assets | 7 | — | — | |||||||||
(b) long-term loans and advances | 8 | 5,743,981 | 5,488,363 | |||||||||
(2) Current assets | ||||||||||||
(a) Trade receivables | 9 | 137,256 | 173,848 | |||||||||
(b) Cash and cash equivalents | 10 | 12,039 | 105,808 | |||||||||
|
|
|
| |||||||||
Total | 5,893,276 | 5,768,019 | ||||||||||
|
|
|
|
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
116
Rediff.com Inc.
Statement of Profit and Loss for the year ended March 31, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
I. Revenue from operations | 11 | 744,030 | 946,960 | |||||||||
|
|
|
| |||||||||
Total Revenue | 744,030 | 946,960 | ||||||||||
|
|
|
| |||||||||
II. Expenses: | ||||||||||||
Employee benefit expense | 12 | 454,381 | 582,457 | |||||||||
Other expenses | 13 | 107,852 | 99,119 | |||||||||
|
|
|
| |||||||||
Total Expenses | 562,233 | 681,576 | ||||||||||
|
|
|
| |||||||||
III. Profit for the period | 181,797 | 265,384 | ||||||||||
|
|
|
| |||||||||
IV. Tax expense: | ||||||||||||
(1) Current tax | 3,464 | — | ||||||||||
|
|
|
| |||||||||
V. Profit for the period | 178,333 | 265,384 | ||||||||||
|
|
|
| |||||||||
IV. Earning per equity share: | ||||||||||||
(1) Basic | 35.67 | 53.08 | ||||||||||
(2) Diluted | 36.36 | 53.08 |
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
117
Rediff.com Inc.
Notes to Financial Statements for the year ended 31.03.2013
NOTE 1: CORPORATE INFORMATION
Rediff.com Inc (“the Company”) was incorporated on July 30, 1999. On February 27, 2001, Rediff Holdings Inc. acquired thinkindia.com Inc (“thinkindia”) which was renamed as Rediff.Com Inc. Rediff.Com provides the Rediff Group with technology, marketing and content support in the United States.
The Company is one of the leading Internet destinations, or portals, focusing on India and the global Indian community. Its websites consists of interest specific channels relevant to Indian interests such as cricket, astrology, matchmaker and movies, content on various matters like news and finance, search facilities, a range of community features such as e-mail, chat, messenger and e-commerce.
NOTE 2: ACCOUNTING POLICIES
a. | Basis of preparation of financial statements |
The accompanying financial statements have been prepared under the historical cost convention, in accordance with the accounting principles generally accepted in India (“Indian GAAP”), the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.
b. | Use of estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
c. | Revenue recognition |
Revenues comprise of revenues from online advertising. Online advertising includes advertisement and sponsorships.
Online advertising
Advertisement and sponsorship income is derived from customers who advertise on the Company’s website or to whom direct links from the Company’s website to their own websites are provided.
Revenue from advertisement and sponsorships is recognized ratably over the contractual period of the advertisement, commencing when the advertisement is placed on the website. Revenues are also derived from sponsor buttons placed in specific areas of the Company’s website, which generally provide users with direct links to sponsor websites. These revenues are recognized ratably over the period in which the advertisement is displayed, provided that no significant Company obligations remain and collection of the resulting receivable is probable. Company obligations may include guarantees of a minimum number of impressions, or times, that an advertisement appears in pages viewed by users of the Company’s portal. To the extent that minimum guaranteed impressions are not met, the Company defers recognition of the corresponding revenues until the guaranteed impression levels are achieved.
118
Rediff.com Inc.
Notes to Financial Statements for the year ended 31.03.2013
d. | Fixed assets and depreciation |
Fixed assets are stated at historical cost. The Company depreciates fixed assets using the straight-line method, over the estimated useful lives of assets. The estimated useful lives of assets are as follows:
Furniture and fixtures | 7 years | |||
Computer equipment | 3 years |
e. | Income taxes |
Income taxes are accounted for in accordance with US tax laws on Income accrued and form part of the Parent company Income tax liability.
Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws in US. Tax liabilities and provision is accounted for by the Holding Company.
119
Rediff.com Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 3: SHARE CAPITAL
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Authorised | ||||||||||||||||
Equity Shares of $0.001 each | 10,000 | 10 | 10,000 | 10 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Issued and Subscribed | ||||||||||||||||
Equity Shares of $0.001 each | 5,000 | 5 | 5,000 | 5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 5,000 | 5 | 5,000 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:
Particulars | Equity Shares | |||||||
Number | Value | |||||||
Shares outstanding at the beginning of the year | 5,000 | 5 | ||||||
Shares issued during the year | — | — | ||||||
|
|
|
| |||||
Shares outstanding at the end of the year | 5,000 | 5 | ||||||
|
|
|
|
3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Rediff Holding Inc. (Holding company) | 5,000 | 5 | 5,000 | 5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 5,000 | 5 | 5,000 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
3.3 Details of shares held by each shareholder holding more than 5% shares:
Name of Shareholder | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
No. of Shares held | % of Holding | No. of Shares held | % of Holding | |||||||||||||
Rediff Holding Inc. (Holding company) | 5,000 | 100 | % | 5,000 | 100 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 5,000 | 100 | % | 5,000 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
3.4 Terms / rights attached to equity shares
In respect of every ordinary share, voting right shall be in the same proportion as the capital paid upon such Ordinary share bears to the total paid up ordinary capital of the company.
120
Rediff.com Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 4: RESERVES AND SURPLUS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
a. Securities Premium Account | ||||||||
Opening Balance | 3,332,145 | 3,332,145 | ||||||
Add : Securities premium credited on Share issue | — | — | ||||||
Less : Premium Utilised for various reasons | — | — | ||||||
|
|
|
| |||||
Closing Balance | 3,332,145 | 3,332,145 | ||||||
|
|
|
| |||||
b. Surplus | ||||||||
Opening balance | 2,336,793 | 2,071,410 | ||||||
(+) Net Profit for the current year | 178,333 | 265,384 | ||||||
|
|
|
| |||||
Closing Balance | 2,515,126 | 2,336,794 | ||||||
|
|
|
| |||||
Total | 5,847,271 | 5,668,939 | ||||||
|
|
|
|
NOTE 5: TRADE PAYABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Micro, Small and Medium Enterprises | — | — | ||||||
Others | 46,000 | 99,017 | ||||||
|
|
|
| |||||
Total | 46,000 | 99,017 | ||||||
|
|
|
|
NOTE 6: OTHER CURRENT LIABILITIES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
(Unsecured) | ||||||||
Salary Payable | — | 58 | ||||||
|
|
|
| |||||
Total | — | 58 | ||||||
|
|
|
|
121
Rediff.com Inc.
Notes to Financial statements for the year ended 31.03.2013
(Amt. in USD)
NOTE 7: FIXED ASSETS
Fixed Assets | Gross Block | Accumulated Depreciation | Net Block | |||||||||||||||||||||||||||||||||||||||||||||
Balance as at 1 April 2012 | Additions/ (Disposals) | Acquired through business combinations | Revaluations/ (Impairments) | Balance as at 31 March 2013 | Balance as at 1 April 2012 | Depreciation charge for the year | Adjustment due to revaluations | On disposals | Balance as at 31 March 2013 | Balance as at 1 April 2012 | Balance as at 31 March 2013 | |||||||||||||||||||||||||||||||||||||
Tangible Assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Computer Equipment | 556,590 | — | — | — | 556,590 | 556,590 | — | — | — | 556,590 | — | — | ||||||||||||||||||||||||||||||||||||
Furniture and Fixtures | 44,423 | — | — | — | 44,423 | 44,423 | — | — | — | 44,423 | — | — | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| �� |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||
Total | 601,013 | — | — | — | 601,013 | 601,013 | — | — | — | 601,013 | — | — | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122
Rediff.com Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 8: LONG TERM LOANS AND ADVANCES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Loans and advances to related parties | ||||||||
(Unsecured, Considered good) | ||||||||
Rediff.com India Ltd. | 1,562,818 | 1,578,819 | ||||||
Rediff Holding Inc. | 3,405,314 | 3,201,314 | ||||||
India Abroad Publications Inc. | 775,849 | 708,230 | ||||||
|
|
|
| |||||
Total | 5,743,981 | 5,488,363 | ||||||
|
|
|
|
NOTE 9: TRADE RECEIVABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
(Unsecured, Considered good) | ||||||||||||||||
Debts outstanding over six months from the due date of payment | 167,004 | 142,908 | ||||||||||||||
Less: Provision for doubtful debts | 167,004 | — | 142,908 | — | ||||||||||||
|
|
|
| |||||||||||||
Others | 137,256 | 173,848 | ||||||||||||||
Less: Provision for doubtful debts | — | 137,256 | — | 173,848 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 137,256 | 173,848 | ||||||||||||||
|
|
|
|
NOTE 10: CASH AND CASH EQUIVALENTS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Balance with Banks—Current Account | ||||||||
Citibank | 12,039 | 105,808 | ||||||
|
|
|
| |||||
Total | 12,039 | 105,808 | ||||||
|
|
|
|
NOTE 11: REVENUE FROM OPERATIONS
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Display Income | 744,030 | 946,960 | ||||||
|
|
|
| |||||
Total | 744,030 | 946,960 | ||||||
|
|
|
|
NOTE 12: EMPLOYEE BENEFIT EXPENSE
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Salaries and Allowances | 454,381 | 582,457 | ||||||
|
|
|
| |||||
Total | 454,381 | 582,457 | ||||||
|
|
|
|
123
Rediff.com Inc.
Notes to Financial statements for the year ended March 31, 2013
(Amt. in USD)
NOTE 13: OTHER EXPENSES
Particulars | For the year ended 31 March 2013 | For the year ended 31 March 2012 | ||||||
Travelling expenses | 1,355 | 6,288 | ||||||
Payroll processing fee | 3,976 | 4,451 | ||||||
Insurance charges | 75,801 | 66,315 | ||||||
Office expenses | 2,624 | 5,065 | ||||||
Provision for doubt ful debts | 24,096 | 8,000 | ||||||
Commission | — | 9,000 | ||||||
|
|
|
| |||||
Total | 107,852 | 99,119 | ||||||
|
|
|
|
NOTE 14: PRIOR YEAR COMPARATIVES
These financial statements have been prepared to comply with the Revised Schedule VI of the Companies Act, 1956 and the previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year
124
Value Communications Corporation
BOARD OF DIRECTORS
Mr. Ajit Balakrishnan
AUDITORS
PATKAR & PENDSE
INDIA
DIRECTORS’ REPORT
The Board of Directors present the audited financial statements of Value Communication Corporation Inc. for the year ended on March 31, 2013.
REVIEW OF BUSINESS
Following the sale of its long distance phone card business in April 2004, the Company is currently not engaged in any business.
Since we have no business activity, we did not incur any expenses during the year.
DIVIDENDS
In view of the losses, your Directors do not recommend any dividend.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
/s/ DIRECTOR
Date: September 5, 2013
125
AUDITORS’ REPORT
To
The Board of Directors,
Value Communications Corporation
Report on the Financial Statements
We have audited the accompanying financial statements ofVALUE COMMUNICATIONS CORPORATION, a wholly owned subsidiary of Rediff.com India Limited incorporated in the United States, (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss account for the year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in the notes to these financial statements. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
(Contd….2)
126
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) | in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; |
and
b) | in the case of the Statement of Profit and Loss of the status for the year ended on that date; |
Report on Other Legal and Regulatory Requirements
1. | As required by section 227(3) of the Act, we report that: |
a) | we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; |
b) | in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books |
c) | the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account. |
d) | in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in the notes to these financial statements. |
For Patkar & Pendse
Chartered Accountants
(Reg.No. 107824W)
/s/ B. M. Pendse
Partner
M.No. 32625
Place:Mumbai
Date: September 5, 2013
127
Value Communications Corporation
Balance Sheet as at 31st March, 2013
Particulars | Note No | 2012-2013 (USD) | 2011-2012 (USD) | |||||||||
I. EQUITY AND LIABILITIES | ||||||||||||
(1) Shareholder’s Funds | ||||||||||||
(a) Share Capital | 3 | — | — | |||||||||
(b) Reserves and Surplus | 4 | (2,483,273 | ) | (2,483,273 | ) | |||||||
(2) Non-Current Liabilities | ||||||||||||
Other non-current liabilities | 5 | 2,677,079 | 2,677,079 | |||||||||
(2) Current Liabilities | ||||||||||||
Trade payables | 6 | 14,369 | 14,369 | |||||||||
|
|
|
| |||||||||
Total | 208,175 | 208,175 | ||||||||||
|
|
|
| |||||||||
II. ASSETS | ||||||||||||
(1) Non-Current assets | ||||||||||||
Long-term loans and advances | 7 | 208,175 | 208,175 | |||||||||
|
|
|
| |||||||||
Total | 208,175 | 208,175 | ||||||||||
|
|
|
|
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
128
Value Communications Corporation
Profit and Loss Statement for the year ended 31st March, 2013
Particulars | Note No | 2012-2013 (USD) | 2011- 2012 (USD) | |||||||
I. Revenue from operations | — | — | ||||||||
|
|
|
| |||||||
Total Revenue | — | — | ||||||||
|
|
|
| |||||||
II. Expenses: | — | — | ||||||||
|
|
|
| |||||||
Total Expenses | — | — | ||||||||
|
|
|
| |||||||
III. Profit for the period | — | — | ||||||||
|
|
|
| |||||||
IV. Earning per equity share: | ||||||||||
(1) Basic | — | — | ||||||||
(2) Diluted | — | — |
As per our attached report of even date | ||
For Patkar & Pendse | For and on behalf of the board | |
Chartered Accountants | ||
Registration no. 107824W | ||
/s/ B. M. Pendse | /s/ A. Balakrishnan | |
Partner | Director | |
M. No. 32625 | ||
Mumbai, India | Mumbai, India | |
Date: September 5, 2013 | Date: September 5, 2013 |
129
Value Communications Corporation
Notes to Financial Statements for the year ended 31.03.2013
NOTE 1: CORPORATE INFORMATION
Value Communications Corporation (“ValuCom” or the “Company”) is a wholly-owned subsidiary of Rediff.com India, Ltd (“Rediff”). ValuCom provides internet-based marketing of prepaid long-distance service to over 200 countries worldwide. The Company markets its services to consumers and small businesses by packaging long-distance service from large telecommunication companies into Prepaid Identification Numbers (“PINs”) and prepaid calling cards for sale on its Internet site or at its call-in center.
An event having significant impact on the Company occurred on 8th April, 2004, where the Company’s entire business was sold to World Quest Networks, Inc.
NOTE 2: ACCOUNTING POLICIES
a. | Basis of preparation of financial statements |
The accompanying financial statements have been prepared under the historical cost convention, in accordance with the accounting principles generally accepted in India (“Indian GAAP”), the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.
b. | Fixed assets and depreciation |
Pursuant to the sale of business on 8th April 2004, the company does not hold any fixed assets.
c. | Employee retirement benefits |
The company has employee retirement benefit plan in which employer merely facilitate the plan administration. Employer does not contribute to the plan.
Leave Encashment
Provision for leave encashment is computed on the basis of last drawn salary for the unveiled leave balance to the credit of the employees at the year end and is charged to the Profit and Loss Account.
130
Value Communications Corporation
Notes to Financial Statements for the year ended 31.03.2013
d. | Foreign currency transactions |
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected.
Exchange differences arising on repayment of liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying amount of the respective fixed asset. The carrying amount of fixed assets is also adjusted at the end of each financial year for any change in the liability arising out of expressing the related outstanding foreign currency liabilities at the closing rates of exchange prevailing at the date of the Balance Sheet or at the rates specified in the related forward contract.
Monetary items (other than those related to acquisition of fixed assets) denominated in a foreign currency are restated using the exchange rates prevailing at the date of Balance Sheet or rates specified in the related forward contract. Gains / losses arising on restatement and on settlement of such items are recognized in the Profit and Loss Account.
Non-monetary items such as investments denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
e. | Income taxes |
Income taxes are accounted for in accordance with the US tax laws.
Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws.
f. | Deferred Income Taxes |
Deferred Tax is recognized for all timing differences, subject to the consideration of prudence, applying the tax rates that have been subsequently enacted after the Balance Sheet date.
g. | Leases |
Operating Lease rentals are expensed with reference to lease terms and conditions.
131
Value Communications Corporation
Notes to Financial statements for the year ended 31.03.2013
(Amt. in USD)
NOTE 3: SHARE CAPITAL
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Authorised | ||||||||||||||||
Equity Shares of no par value | 20,000,000 | — | 20,000,000 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Issued and Subscribed | ||||||||||||||||
Equity Shares of no par value | 12,000,000 | — | 12,000,000 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 12,000,000 | — | 12,000,000 | — | ||||||||||||
|
|
|
|
|
|
|
|
3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:
Particulars | Equity Shares | |||||||
Number | Value | |||||||
Shares outstanding at the beginning of the year | 12,000,000 | — | ||||||
Shares issued during the year | — | — | ||||||
|
|
|
| |||||
Shares outstanding at the end of the year | 12,000,000 | — | ||||||
|
|
|
|
3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
Number | Value | Number | Value | |||||||||||||
Rediff.com India Ltd. (Holding Company) | 12,000,000 | — | 12,000,000 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 12,000,000 | — | 12,000,000 | — | ||||||||||||
|
|
|
|
|
|
|
|
3.3 Details of shares held by each shareholder holding more than 5% shares:
Name of Shareholder | As at 31 March 2013 | As at 31 March 2012 | ||||||||||||||
No. of Shares held | % of Holding | No. of Shares held | % of Holding | |||||||||||||
Rediff.com India Ltd. (Holding Company) | 12,000,000 | 100 | % | 12,000,000 | 100 | % | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 12,000,000 | 100 | % | 12,000,000 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
132
Value Communications Corporation
Notes to Financial statements for the year ended 31.03.2013
(Amt. in USD)
NOTE 4: RESERVES AND SURPLUS
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
a. Securities Premium Account | ||||||||
Opening Balance | 7,146,432 | 7,146,432 | ||||||
Add : Securities premium credited on Share issue | — | — | ||||||
Less : Premium Utilised for various reasons | — | — | ||||||
|
|
|
| |||||
Closing Balance | 7,146,432 | 7,146,432 | ||||||
|
|
|
| |||||
b. Deficit | ||||||||
Opening balance | (9,629,705 | ) | (9,629,705 | ) | ||||
(+) Net Profit for the current year | — | — | ||||||
|
|
|
| |||||
Closing Balance | (9,629,705 | ) | (9,629,705 | ) | ||||
|
|
|
| |||||
Total | (2,483,273 | ) | (2,483,273 | ) | ||||
|
|
|
|
NOTE 5: OTHER NON CURRENT LIABILITES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Loans and advances from related parties | ||||||||
(Unsecured) | ||||||||
Rediff Holdings Inc | 2,677,079 | 2,677,079 | ||||||
|
|
|
| |||||
Total | 2,677,079 | 2,677,079 | ||||||
|
|
|
|
NOTE 6: TRADE PAYABLES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Micro, Small and Medium Enterprises | — | — | ||||||
Others | 14,369 | 14,369 | ||||||
|
|
|
| |||||
Total | 14,369 | 14,369 | ||||||
|
|
|
|
NOTE 7: LONG TERM LOANS AND ADVANCES
Particulars | As at 31 March 2013 | As at 31 March 2012 | ||||||
Loans and advances to related parties | ||||||||
(Unsecured, Considered good) | ||||||||
Rediff.com India Ltd | 139,846 | 139,846 | ||||||
India Abroad Inc. | 68,329 | 68,329 | ||||||
|
|
|
| |||||
Total | 208,175 | 208,175 | ||||||
|
|
|
|
133
Value Communications Corporation
Notes to Financial statements for the year ended 31.03.2013
(Amt. in USD)
NOTE 8: DEFERRED INCOME TAX
As of March 31, 2013, the Company has net operating loss carry forwards of approx US$ 3,033,000 for federal income tax purposes, which expire in the years 2021 to 2031. Realization of the future tax benefits related to the deferred tax income tax asset is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carry forward period. Management has considered these factors and believes that no asset to be created in the books of accounts.
NOTE 9: PRIOR YEAR COMPARATIVES
These financial statements have been prepared to comply with the Revised Schedule VI of the Companies Act, 1956 and the previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year
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