EXHIBIT 99.1
REPORT OF INDEPENDENT AUDITORS
TO THE BOARD OF DIRECTORS OF LINTAS INDIA PRIVATE LIMITED
TO THE BOARD OF DIRECTORS OF LINTAS INDIA PRIVATE LIMITED
We have audited the consolidated balance sheet of Lintas India Private Limited (the “Company”) and its subsidiaries and joint ventures as of March 31, 2007 and the related consolidated profit and loss account and consolidated cash flow statement for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, based on our audit, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lintas India Private Limited as of March 31, 2007, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in India.
/s/ Price Waterhouse & Co.
Mumbai, India
September 12, 2007
1
LINTAS INDIA PRIVATE LIMITED
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2007
As at 31st | ||||||||||||
Schedule | March 2007 | |||||||||||
No. | Rupees | Rupees | ||||||||||
SOURCES OF FUNDS | ||||||||||||
Shareholders’ Funds: | ||||||||||||
Capital | 1 | 4,800,000 | ||||||||||
Reserves and Surplus | 2 | 1,784,453,002 | ||||||||||
1,789,253,002 | ||||||||||||
Minority Interest | 19,936,198 | |||||||||||
1,809,189,200 | ||||||||||||
APPLICATION OF FUNDS | ||||||||||||
Fixed Assets: | 3 | |||||||||||
Gross Block | 565,034,209 | |||||||||||
Less: Depreciation | 297,856,408 | |||||||||||
Net Block | 267,177,801 | |||||||||||
Capital Advances | 880,940 | |||||||||||
268,058,741 | ||||||||||||
Investments | 4 | 591,891,996 | ||||||||||
Deferred Tax Assets (Net) | 5 | 23,283,186 | ||||||||||
Current Assets, Loans and Advances: | ||||||||||||
Jobs In Progress | 6 | 34,614,752 | ||||||||||
Sundry Debtors | 7 | 2,817,371,734 | ||||||||||
Cash and Bank Balances | 8 | 75,493,800 | ||||||||||
Other Current Assets | 9 | 260,925 | ||||||||||
Loans and Advances | 10 | 348,802,462 | ||||||||||
3,276,543,673 | ||||||||||||
Less: Current Liabilities and Provisions: | ||||||||||||
Current Liabilities | 11 | 2,296,281,431 | ||||||||||
Provisions | 12 | 54,306,965 | ||||||||||
2,350,588,396 | ||||||||||||
Net Current Assets | 925,955,277 | |||||||||||
1,809,189,200 | ||||||||||||
Notes to Accounts | 16 |
Schedules referred to above form an integral part of the Consolidated Balance Sheet.
This is the Consolidated Balance Sheet referred to in our report of even date.
2
LINTAS INDIA PRIVATE LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2007
Schedule | 2006-2007 | |||||||
No. | Rupees | |||||||
Income | ||||||||
Commission and Service Fees | 13 | 1,641,491,411 | ||||||
Other Income | 14 | 115,620,711 | ||||||
1,757,112,122 | ||||||||
Expenditure | ||||||||
Administrative and General Expenses | 15 | 1,239,721,983 | ||||||
Interest | 340,985 | |||||||
Depreciation | 43,054,873 | |||||||
1,283,117,841 | ||||||||
Profit before Taxation | 473,994,281 | |||||||
Current Tax | 156,935,181 | |||||||
Minimum Alternative Tax (credit) | (216,171 | ) | ||||||
Excess provision for Tax in earlier years (net) | (16,482,122 | ) | ||||||
Fringe Benefit Tax | 10,074,467 | |||||||
Deferred Tax | (6,240,071 | ) | ||||||
Profit after Taxation and Before share of profit of Minority Shareholders | 329,922,997 | |||||||
Minority’s share of profit in Subsidiary Companies | 3,240,101 | |||||||
Net Profit | 326,682,896 | |||||||
Profit and Loss Account Balance brought forward from the Previous Year | 782,277,054 | |||||||
Profit available for Appropriation | 1,108,959,950 | |||||||
Appropriations: | ||||||||
Transfer to General Reserve | 1,120,042 | |||||||
Tax paid on Interim Dividend declared by a Joint Venture Company | 481,058 | |||||||
Tax on Proposed Final Dividend declared by a Subsidiary Company | 212,353 | |||||||
Profit and Loss Account Balance carried to the Balance Sheet | 1,107,146,497 | |||||||
1,108,959,950 | ||||||||
Earnings per Share — Basic and Diluted | 6,805.89 | |||||||
(Schedule 16 — Note 11) | ||||||||
Notes to Accounts | 16 |
Schedules referred to above form an integral part of the Consolidated Profit and Loss Account.
This is the Consolidated Profit and Loss Account referred to in our report of even date.
3
LINTAS INDIA PRIVATE LIMITED
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2007
2006-07 | ||||||||
Rupees | ||||||||
A. | Cash Flow From Operating Activities: | |||||||
Profit before taxation | 473,994,282 | |||||||
Adjustments for: | ||||||||
Depreciation | 43,054,873 | |||||||
Interest Expense | 340,985 | |||||||
Interest Income | (19,861,273 | ) | ||||||
Dividend Income | (26,069,869 | ) | ||||||
Profit on Sale of Fixed Assets (net) | (539,458 | ) | ||||||
Fixed Assets Written-off | 336,533 | |||||||
Gain on Sale of Investments in units of Mutual Funds | (11,706,179 | ) | ||||||
Provision for Doubtful Debts | 6,810,211 | |||||||
Liabilities no longer required written back | (39,627,472 | ) | ||||||
Operating Profit before working capital changes | 426,732,633 | |||||||
Adjustments for changes in working capital: | ||||||||
— (Increase)/Decrease in Inventories | (34,279,138 | ) | ||||||
— (Increase)/Decrease in Sundry Debtors | (551,578,721 | ) | ||||||
— (Increase)/Decrease in Loans and Advances | (34,550,758 | ) | ||||||
— Increase/(Decrease) in Current Liabilities and Provisions | 467,363,450 | |||||||
Cash from operations | 273,687,466 | |||||||
— Taxes Paid (Net of Refunds) | (180,521,471 | ) | ||||||
Net cash from Operating Activities | 93,165,995 | |||||||
B. | Cash Flow From Investing Activities: | |||||||
Purchase of Fixed Assets (including Capital Advances) | (47,602,396 | ) | ||||||
Proceeds from Sale of Fixed Assets | 1,915,379 | |||||||
Purchase of Investments | (696,448,481 | ) | ||||||
Proceeds from Sale of Investments | 683,646,291 | |||||||
Interest Received | 4,146,441 | |||||||
Dividend Received | 26,459,837 | |||||||
Net cash used in Investing Activities | (27,882,929 | ) | ||||||
C. | Cash Flow From Financing Activities: | |||||||
Repayment of Inter Corporate Loans | (5,600,000 | ) | ||||||
Interest Paid | (340,985 | ) | ||||||
Dividend Paid | (117,841,150 | ) | ||||||
Dividend Tax Paid | (17,330,693 | ) | ||||||
Net cash used in Financing Activities | (141,112,828 | ) | ||||||
Net Decrease in Cash and cash Equivalents | (75,829,762 | ) | ||||||
Cash and cash equivalents as at the beginning of the year | 151,323,562 | |||||||
Cash and cash equivalents as at the end of the year | 75,493,800 | |||||||
(75,829,762 | ) | |||||||
Cash and cash equivalents comprise | ||||||||
Cash in hand | 843,031 | |||||||
Balances with Scheduled Banks in Current and | ||||||||
Deposit Accounts | 74,650,769 | |||||||
75,493,800 | ||||||||
Note: The above Consolidated Cash flow statement has been prepared under the indirect method setout inAS-3 issued by the Institute of Chartered Accountants of India.
This is the Consolidated Cash Flow Statement referred to in our report of even date.
4
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET
AS AT 31ST MARCH 2007
SCHEDULE 1
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
CAPITAL | ||||
Authorised: | ||||
30,000 ‘A’ Equity Shares of Rs.100 each | 3,000,000 | |||
24,320 ‘B’ Equity Shares of Rs.100 each | 2,432,000 | |||
5,432,000 | ||||
Issued and Subscribed: | ||||
[Schedule 16 — Note 13] | ||||
24,480 ‘A’ Equity Shares of Rs.100 each, fully paid up (See Notes below) | 2,448,000 | |||
23,520 ‘B’ Equity Shares of Rs.100 each, fully paid up (See Notes below) | 2,352,000 | |||
4,800,000 | ||||
Notes:
1. | Of the above, 1,200 Equity Shares of Rs.100 each are allotted as fully paid pursuant to a contract without payment having being received in cash. |
2. | Of the above, 45,000 Equity Shares have been allotted as fully paid up bonus shares by capitalisation of General Reserve. |
SCHEDULE 2
As at 31st | ||||||||
March 2007 | ||||||||
Rupees | Rupees | |||||||
RESERVES AND SURPLUS | ||||||||
Capital Reserve | 90,406 | |||||||
General Reserve: | ||||||||
As per last Balance Sheet | 676,096,057 | |||||||
Add: Amount transferred from Profit and Loss Account | 1,120,042 | |||||||
[Includes Share in Joint Venture Rs. 2,234,608] | 677,216,099 | |||||||
Profit and Loss Account | 1,107,146,497 | |||||||
[Includes Share in Joint Venture Rs. 9,150,179] | ||||||||
1,784,453,002 | ||||||||
5
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THECONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2007
SCHEDULE 3
FIXED ASSETS
[Schedule 16 — Note 1 C (c)]
(Rupees)
[Schedule 16 — Note 1 C (c)]
(Rupees)
GROSS BLOCK | DEPRECIATION | NET BOOK VALUE | ||||||||||||||||||||||||||||||||||
Additions | Deductions | Depreciation | ||||||||||||||||||||||||||||||||||
As at 31st | during | during | As at 31st | As at 31st | For the | on | As at 31st | As at 31st | ||||||||||||||||||||||||||||
ASSETS | March 2006 | the Year | the Year | March 2007 | March 2006 | Year | Deductions | March 2007 | March 2007 | |||||||||||||||||||||||||||
Goodwill on Consolidation | 132,264 | — | — | 132,264 | — | — | — | — | 132,264 | |||||||||||||||||||||||||||
Buildings | 282,563,361 | — | — | 282,563,361 | 88,177,421 | 9,719,256 | — | 97,896,677 | 184,666,684 | |||||||||||||||||||||||||||
Furniture and Fittings | 58,214,978 | 10,478,086 | 1,885,369 | 66,807,695 | 36,816,548 | 6,631,971 | 1,696,150 | 41,752,369 | 25,055,326 | |||||||||||||||||||||||||||
Equipment | 169,091,201 | 18,215,244 | 22,718,283 | 164,588,162 | 134,146,464 | 14,384,247 | 22,213,019 | 126,317,692 | 38,270,470 | |||||||||||||||||||||||||||
Vehicles | 29,125,002 | 5,461,077 | 6,800,501 | 27,785,578 | 21,399,231 | 3,661,042 | 5,782,530 | 19,277,743 | 8,507,835 | |||||||||||||||||||||||||||
Software | 8,813,125 | 10,404,740 | — | 19,217,865 | 3,111,302 | 7,776,302 | — | 10,887,604 | 8,330,261 | |||||||||||||||||||||||||||
547,939,931 | 44,559,147 | 31,404,153 | 561,094,925 | 283,650,966 | 42,172,818 | 29,691,699 | 296,132,085 | 264,962,840 | ||||||||||||||||||||||||||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 1,728,697 | 2,210,587 | — | 3,939,284 | 842,268 | 882,055 | — | 1,724,323 | 2,214,961 | |||||||||||||||||||||||||||
Total | 549,668,628 | 46,769,734 | 31,404,153 | 565,034,209 | 284,493,234 | 43,054,873 | 29,691,699 | 297,856,408 | 267,177,801 | |||||||||||||||||||||||||||
Capital Advance | 880,940 | |||||||||||||||||||||||||||||||||||
268,058,741 | ||||||||||||||||||||||||||||||||||||
6
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET
AS AT 31ST MARCH 2007
SCHEDULE 4
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
INVESTMENTS | ||||
[Schedule 16 — Note 1 C(d)] | ||||
LONG-TERM | ||||
Unquoted Non-trade Investments in Mutual Funds | 383,337,796 | |||
[Schedule 16 — Note 6] | ||||
Unquoted Non-trade Investments in Bonds: | ||||
74,120 — 6.75% Tax free US64 Bonds of the face value of Rs. 100 each, fully paid up. (Maturity Date: June 2008) | 7,412,000 | |||
390,749,796 | ||||
CURRENT | ||||
Unquoted Non-trade Investments in Mutual Funds: | 201,142,200 | |||
[Schedule 16 — Note 6] | 591,891,996 | |||
SCHEDULE 5
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
DEFERRED TAX ASSETS / (LIABILITY) | ||||
[Schedule 16 — Note 1 C(f)] | ||||
Timing differences towards: | ||||
— Provision for Doubtful Debts | 13,287,869 | |||
— Provision for Leave Encashment | 10,419,522 | |||
— Provision for expenses inadmissible under Section 40(a) of the Income Tax Act | 1,185,259 | |||
— Provision for Gratuity | 29,716 | |||
— Unpaid bonus | 1,319 | |||
— Depreciation | (2,003,610 | ) | ||
22,920,075 | ||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 363,111 | |||
23,283,186 | ||||
7
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET
AS AT 31ST MARCH 2007
SCHEDULE 6
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
JOBS IN PROGRESS | ||||
[Schedule 16 — Note 1 C(e)] | ||||
Jobs in Progress | 34,614,752 | |||
34,614,752 | ||||
SCHEDULE 7
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
SUNDRY DEBTORS | ||||
(Schedule 16 — Note 2) | ||||
Outstanding for more than six months | ||||
Unsecured, Considered Good | 20,667,919 | |||
Unsecured, Considered Doubtful | 40,362,817 | |||
61,030,736 | ||||
Less: Provision for doubtful debts | 40,362,817 | |||
20,667,919 | ||||
Other Debts | ||||
Unsecured, Considered Good | 2,698,763,704 | |||
2,719,431,623 | ||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 97,940,111 | |||
2,817,371,734 | ||||
8
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET
AS AT 31ST MARCH 2007
SCHEDULE 8
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
CASH AND BANK BALANCES | ||||
Cash on Hand | 843,031 | |||
Balances with Scheduled Banks: | ||||
On Current Accounts | 46,038,446 | |||
On Deposit Accounts | 10,000,000 | |||
On Margin Money Deposit Accounts | 4,000,000 | |||
(Against outstanding bank guarantees) | ||||
On “Business Multiplier” Account ( Refer Note below) | 12,543,709 | |||
73,425,186 | ||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 2,068,614 | |||
75,493,800 | ||||
Note:
The balance in the account in excess of Rs.1,500,000 is converted by the bank into interest bearing short-term deposits.These deposits are broken and transferred by the bank to the current account, as required, to meet the shortfall.
SCHEDULE 9
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
OTHER CURRENT ASSETS | ||||
Accrued Interest on: | ||||
Deposits with Industrial Development Bank of India under Investment Deposit Scheme | 82,320 | |||
Deposits with Scheduled Banks | 11,835 | |||
Unit Trust of India Bonds | 166,770 | |||
260,925 | ||||
9
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET
AS AT 31ST MARCH 2007
SCHEDULE 10
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
LOANS AND ADVANCES | ||||
(Unsecured, Considered Good) | ||||
Advances Recoverable in Cash or in Kind or for Value to be Received | 75,934,507 | |||
Loan to Employees’ WelfareTrust | 75,000 | |||
Deposits for Premises | 94,164,765 | |||
Deposits with Industrial Development Bank of India under Investment Deposit Scheme | 2,586,788 | |||
Other Deposits | 5,417,501 | |||
Balance with Excise Authorities | 8,057,238 | |||
Advance Payment of Taxes | ||||
— Income Tax | 155,237,744 | |||
(Net of Provisions Rs. 1,544,091,836) | ||||
— Fringe Benefit Tax | 1,570,000 | |||
(Net of Provisions Rs. 19,320,000) | ||||
343,043,543 | ||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 5,758,919 | |||
348,802,462 | ||||
SCHEDULE 11
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
CURRENT LIABILITIES | ||||
Due to Small Scale Industrial Undertakings | 198,701 | |||
Due to other than Small Scale Industrial Undertakings | 2,200,579,174 | |||
Other Liabilities | 1,472,410 | |||
2,202,250,285 | ||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 94,031,146 | |||
2,296,281,431 | ||||
10
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET
AS AT 31ST MARCH 2007
SCHEDULE 12
As at 31st | ||||
March 2007 | ||||
Rupees | ||||
PROVISIONS | ||||
Tax on Proposed Dividend | 416,378 | |||
Wealth Tax | 1,938,142 | |||
Leave Encashment | 31,897,795 | |||
[Schedule 16 — Note 1 C(b) (iii)] | ||||
Gratuity | 1,253,700 | |||
Contingencies [Schedule 16 — Note 12 ] | 18,451,667 | |||
53,957,682 | ||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 349,283 | |||
54,306,965 | ||||
11
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED PROFIT AND
LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2007
SCHEDULE 13
2006-07 | ||||
Rupees | ||||
Commission and Service Fees | ||||
Commission and Service Fees | 1,619,996,990 | |||
1,619,996,990 | ||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 21,494,421 | |||
1,641,491,411 | ||||
SCHEDULE 14
2006-07 | ||||||||
Rupees | Rupees | |||||||
OTHER INCOME | ||||||||
Dividend: | ||||||||
[Schedule 16 — Note 1 C(d)] | ||||||||
Non-Trade Investments in Mutual Funds | 26,069,869 | |||||||
Interest: | ||||||||
Staff Loans | 2,256 | |||||||
Non-trade Investments | 500,310 | |||||||
Investment Deposit Scheme | 82,320 | |||||||
Others — Gross (Tax deducted at source Rs. 740,005) | ||||||||
(Schedule 16 — Note 10) | 19,124,938 | |||||||
19,709,824 | ||||||||
Liabilities no longer required written back | 36,270,804 | |||||||
Gain on Sale of Investments in units of Mutual Funds | 11,706,179 | |||||||
Profit on Sale of Fixed Assets (net) | 539,458 | |||||||
Discounts Earned | 7,610,581 | |||||||
Sale of Paintings | 5,762,363 | |||||||
Miscellaneous | 427,062 | |||||||
108,096,140 | ||||||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 7,524,571 | |||||||
115,620,711 | ||||||||
12
LINTAS INDIA PRIVATE LIMITED
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED PROFIT AND
LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2007
SCHEDULE 15
2006-07 | ||||||||
Rupees | Rupees | |||||||
ADMINISTRATIVE AND GENERAL EXPENSES | ||||||||
Salaries, Allowances and Bonus [Schedule 16 — Note 1 C(b)] | 514,367,800 | |||||||
Contribution to Provident, Gratuity and Other Funds | ||||||||
[Schedule 16 — Note 1 C(b)] | 30,129,789 | |||||||
Staff Welfare expenses | 32,638,196 | |||||||
Rent (Schedule 16 — Note 8) | 62,011,770 | |||||||
Repairs and Maintenance | ||||||||
— Building | 4,051,431 | |||||||
— Machinery and Equipment | 6,178,490 | |||||||
— Others | 12,134,087 | |||||||
22,364,008 | ||||||||
Rates and Taxes (Schedule 16 — Note 12) | 22,254,956 | |||||||
Electricity and Water | 20,322,007 | |||||||
Insurance | 1,044,361 | |||||||
Auditors’ Remuneration: | ||||||||
— As Auditors | 2,500,000 | |||||||
— Taxation Matters (Tax Audit) | 655,000 | |||||||
— Other Services | 10,000 | |||||||
— Out-of-Pocket Expenses | 50,499 | |||||||
3,215,499 | ||||||||
Travelling and Conveyance | 67,970,213 | |||||||
Communication | 29,081,155 | |||||||
Printing and Stationery | 14,061,639 | |||||||
Directors’ Commission | 9,966,514 | |||||||
Legal and Professional | 129,736,773 | |||||||
Client Presentation | 22,372,236 | |||||||
Studio, Research and Marketing Services | 143,859,055 | |||||||
Rural Communication | 61,194,192 | |||||||
Software Expenses | 533,202 | |||||||
Provision for Doubtful Debts | 6,567,068 | |||||||
Exchange Loss (Net) [Schedule 16 — Note 1 C(g)] | 220,303 | |||||||
Fixed Assets Written-off | 336,533 | |||||||
Miscellaneous | 29,826,584 | |||||||
1,224,073,853 | ||||||||
Share in Joint Ventures — [Schedule 16 — Note 7] | 15,648,130 | |||||||
1,239,721,983 | ||||||||
13
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
THE YEAR ENDED 31ST MARCH 2007
1 Significant Accounting Policies
A Basis of Accounting
The Consolidated Financial Statements are prepared under historical cost convention from the books of account maintained on accrual basis, except for interest on statutory refunds, which is accounted only if received before the date of approval of the Accounts, and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India and referred to in Section 211(3C) of the Companies Act,1956, of India.
B Principles of Consolidation
(i) The consolidated financial statements relate to Lintas India Private Limited (the Company), its Subsidiary Companies and Joint Venture Companies. The consolidated financial statements have been prepared on the following basis:
(a) The financial statements of the Company and its Subsidiary Companies have been combined on aline-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances, intra-group transactions and resulting unrealised profits or losses on intra-group transactions.
(b) The difference between the cost of investment in the subsidiaries over the Company’s portion of equity of the subsidiary is recognized in the financial statements as Goodwill or Capital Reserve.
(c) | Minority Interest in the net assets of consolidated subsidiaries consist of: |
• | the amount of equity attributable to minorities at the date on which investment in a subsidiary is made and | |
• | the minorities’ share of movements in equity since the date the parent subsidiary relationship comes into existence |
(d) In the consolidated financial statements, the Company has reported its interest in the Joint Venture Companies, using proportionate consolidation method whereby the Company’s share of each of the assets, liabilities, income and expenses of the jointly controlled entities is reported as separate line items, after eliminating proportionate unrealised profits or losses attributable to the interest of the Company.
(e) The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are prepared to the extent possible, in the same manner as the Company’s separate financial statements.
(f) As this is the first year of reporting consolidated financial statements, figures for the previous year are not given.
14
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
THE YEAR ENDED 31ST MARCH 2007
(ii) The Subsidiary Companies and Joint Venture Companies considered in the consolidated financial statements are:
% Voting power | ||||||||
Country of | held as at | |||||||
Name of the Company | Relationship | Incorporation | March 31, 2007 | |||||
Karishma Advertising Private Limited | Subsidiary | India | 99.95 | |||||
SSC&B Lintas Private Limited | Subsidiary | India | 99.99 | |||||
Initiative Media (India) Private Limited | Subsidiary | India | 99.90 | |||||
Quadrant Communications Limited | Subsidiary | India | 51.00 | |||||
Sprint Advertising Private Limited* | Subsidiary | India | 99.73 | |||||
Pathfinders and Market Research Private Limited* | Subsidiary | India | 98.93 | |||||
Lin-TV Advertising Private Limited* | Subsidiary | India | 98.93 | |||||
Aaren Initiative Outdoor Advertising Private Limited | Joint Venture | India | 50.00 | |||||
Unitas Creative Television Private Limited | Joint Venture | India | 49.97 |
* | Shareholding is through subsidiaries, Karishma Advertising Private Limited and Initiative Media (India) Private Limited. |
C Other Significant Accounting Policies
(a) Commission and Service Fees
(i) Commission and service fees represent income from jobs completed on behalf of clients.
(ii) Commission in respect of advertisements, which requires performance of only creative work, is recognised in the period during which the advertisement is published or aired, based on the management’s estimates and / or statements received from the client or the agency on record.
(iii) Retainer fees are accounted on an accrual basis over the period of contract.
(b) Employee Benefits
(i) The Company, its subsidiaries and jointly controlled entity makes regular contribution to approved provident, pension and superannuation funds. These contributions are charged to the Profit and Loss Account.
(ii) The liability for gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end.
(iii) In respect of the Company, its subsidiaries and jointly controlled entity, provision towards accrued leave is made based on the accrued leave balances, as per its policy, for each employee on its rolls as at the year end.
(c) Fixed Assets and Depreciation
(i) Fixed Assets are stated at cost less accumulated depreciation.
(ii) Depreciation on Fixed Assets is provided on the written down value method at the rates specified in Schedule XIV to the Companies Act, 1956, of India, except for computer software, which is amortised on the straight-line method over a period of three years. On additions, depreciation is provided for the full year irrespective of the dates of additions during the year. On assets sold, discarded,
15
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
THE YEAR ENDED 31ST MARCH 2007
demolished or destroyed during the year, no depreciation is provided during the year. All fixed assets individually costing Rs. 5,000 and less are depreciated fully in the year of acquisition.
(d) | Investments / Dividend on Investments Long-term investments are stated at cost less provision, if any, for permanent diminution in value. Current investments are stated at lower of cost and fair value. Dividends are accounted for when the right to receive the dividend is established. |
(e) | Jobs in Progress Jobs in Progress, representing expenses incurred on client jobs, are carried at cost. |
(f) | Deferred Taxation Deferred tax arising from timing differences between book and tax profits is accounted for under the liability method, at the current / substantially enacted rate of tax, to the extent that the timing differences are expected to crystallise / capable of reversal as deferred tax charge / benefit in the Profit and Loss Account and as deferred tax liability / asset in the Balance Sheet. |
(g) Foreign Exchange transactions
(i) Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet. Gain and losses arising on account of differences in foreign exchange rates on settlement / translation of monetary assets and liabilities are recognised in the Profit and Loss Account. Non-monetary foreign currency items are carried at cost.
(ii) Gains and Losses on account of foreign exchange fluctuation in respect of liabilities in foreign currencies specific to acquisition of fixed assets are adjusted to the carrying cost of the respective fixed assets.
(h) | Provisions and Contingent Liabilities A provision is recognised when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure as specified in Accounting Standard 29 — ‘Provisions, Contingent Liabilities and Contingent Assets’, is made. |
(i) | Impairment of Assets At each balance sheet date an assessment is made as to whether there is any indication that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. |
2 | Other Debts and Share in Joint Ventures under Sundry Debtors include Unbilled Media Rs. 1,322,383,570 and Unbilled Production Rs. 391,581,652 representing spots / insertions released in media prior to the |
16
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
THE YEAR ENDED 31ST MARCH 2007
year-end and production jobs completed prior to the year-end, respectively, the debit notes for which are being raised subsequently.
3 Contingent liabilities
(i) Claims to the extent ascertainable, not acknowledged as debts Rs. 4,079,878.
(ii) Disputed income-tax matters aggregating Rs. 32,308,314, details of which are as under:
(a) In respect of Assessment Year1994-95, Rs. 14,474,910 being penalty under Section 271(1)(c) of the Income Tax Act, 1961. The matter was decided in the Company’s favour at the Commissioner of Income Tax (Appeals). However, the income tax department has preferred an appeal to the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals).
(b) In respect of Assessment Year1997-98, Rs. 6,216,065 being the effect of certain disallowances by the Income Tax authorities. The matter was decided in the Company’s favour at the Commissioner of Income Tax (Appeals). However, the income tax department has preferred an appeal to the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals).
(c) In respect of Assessment Year1998-99, Rs. 4,778,402 being the effect of certain disallowances by the Income Tax authorities. The matter was decided in the Company’s favour at the Commissioner of Income Tax (Appeals). However, the income tax department has preferred an appeal to the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals).
(d) In respect of Assessment Year1999-00, Rs. 2,224,834 being the effect of certain disallowances by the Income Tax authorities. The matter was decided in the Company’s favour at the Commissioner of Income Tax (Appeals). However, the income tax department has preferred an appeal to the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals).
(e) In respect of a subsidiary of the Company, for Assessment Year2001-02, Rs. 486,243 being penalty under Section 271(1)(c) of the Income Tax Act, 1961, against which an appeal has been preferred to the Income Tax Appellate Tribunal.
(f) In respect of a subsidiary of the Company, for Assessment Year2003-04, Rs. 3,907,769 being the effect of a disallowance by the Income Tax authorities. The matter was decided in the subsidiary’s favour by the Commissioner of Income Tax (Appeals). However, the income tax department has preferred an appeal to the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals).
(g) In respect of a subsidiary of the Company, for Assessment Year2004-05, Rs. 220,091 being the effect of a disallowance by the Income Tax authorities against which the appeal has been preferred to the Commissioner of Income Tax (Appeals).
The timing and the amount of cash outflows, if any, that may arise from the above matters will be determined only on settlement of the cases.
4 Segmental Information
In accordance with the requirements of Accounting Standard 17 on Segment Reporting, the Companies forming part of consolidated financial statements are exclusively engaged in the business of “Advertising”. Thus the segment revenue, segment results, total carrying amount of segment assets, total carrying amount of segment liabilities, total cost incurred to acquire segments assets, the total amount of charge for depreciation
17
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
THE YEAR ENDED 31ST MARCH 2007
during the year are all as reflected in the Financial Statements for the year ended 31st March 2007 and as on that date.
5 (i) Related Party Disclosures
(a) | Control: | |||
Substantial interest in the voting power of the Company | 49% of thepaid-up share capital of the Company held by Lowe & Partners Worldwide Inc. (Refer Note 13 below) | |||
(b) | Joint Control | Unitas Creative Television Private Limited Aaren Initiative Outdoor Advertising Private Limited | ||
(c) | Key Management Personnel: | P.R. Mehta (Lintas) S.C. Munsiff (Lintas) | ||
(d) | Enterprises in the Group with whom transactions have taken place during the year | Lowe LDB (Private) Ltd. — Srilanka Lowe & Partners — Jakarta Initative Media GmbH Lowe Malaysia Initiative Media F.Z.L.L.C, U.A.E Lowe — AsiaPacific Lowe Worldwide Ltd. — London Lowe & Partners — New York Lowe — Philippines Lowe Bull Gauteng (Pty) Ltd. PT Citra Lintas Indonesia Lowe China Lowe & Partners Middle East North Africa F.Z.L.L.C. Lowe & Partners (Singapore) Pte Ltd. Lowe & Partners SDN BHD, Malaysia Lowe & Partners STD Tokyo Initiative — Sydney Initiative Media London Ltd. Shanghai Lintas Advtg Co Ltd Interpublic Group New York Initiative New York Lowe Limited — Vietnam Lowe Brazil Lowe Bangkok Lowe Inc — Philippines Lowe LTDA Lowe Paris |
18
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR
THE YEAR ENDED 31ST MARCH 2007
5 (ii) The following transactions were carried out with related parties mentioned in (i) above.
Enterprises in the | ||||||||||||
Group with whom | ||||||||||||
transactions have | ||||||||||||
Key Management | taken place | |||||||||||
Joint Control | Personnel | during the year | ||||||||||
Particulars | 2006-2007 | 2006-2007 | 2006-2007 | |||||||||
Rupees | ||||||||||||
Commission and Service Fees (net) | ||||||||||||
Aaren Initiative Outdoor Advertising Private Limited | 47,691,186 | — | — | |||||||||
Others | — | — | (20,359,180 | ) | ||||||||
Remuneration | ||||||||||||
Prem Mehta | — | 32,448,463 | — | |||||||||
Shahrook Munsiff | — | 12,218,377 | — | |||||||||
Miscellaneous | ||||||||||||
Lowe Bull Gauteng (Pty) Ltd. | — | — | 4,208,622 | |||||||||
PT.Citra Lintas Indonesia | — | — | 1,759,612 | |||||||||
Lowe & Partners SDN BHD, Malaysia | — | — | 1,107,869 | |||||||||
Others | — | — | 2,742,594 |
Figures in brackets indicate income
5 (iii) The following are balances of related parties mentioned in (i) above.
Enterprises in the | ||||||||||||
Group with whom | ||||||||||||
transactions have | ||||||||||||
Key Management | taken place | |||||||||||
Joint Control | Personnel | during the year | ||||||||||
As at 31st | As at 31st | As at 31st | ||||||||||
Particulars | March 2007 | March 2007 | March 2007 | |||||||||
Rupees | ||||||||||||
Sundry Debtors | ||||||||||||
Lowe & Partners Worldwide Limited | — | — | 2,431,338 | |||||||||
Shanghai Lintas Advtg Co Ltd | — | — | 2,122,315 | |||||||||
Aaren Initiative Outdoor Advertising Private Limited | 5,824,508 | — | — | |||||||||
Others | — | — | 4,034,549 | |||||||||
Loans and Advances | ||||||||||||
Unitas Creative Television Private Limited | 10,200 | — | — | |||||||||
Sundry Creditors | ||||||||||||
Aaren Initiative Outdoor Advertising Private Limited | (5,036,580 | ) | — | — | ||||||||
Prem Mehta | — | (7,474,886 | ) | — | ||||||||
Others | — | — | (1,147,080 | ) |
Figures in brackets indicate liabilities
19
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR ENDED 31ST MARCH 2007
6. | Details of Purchase and Sale of investments during the year ended 31st March 2007 |
Balance as at 31st March 2006 | Purchased during the Year | Sold during the Year | Balance as at 31st March 2007 | |||||||||||||||||||||||||||||
Investments | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | ||||||||||||||||||||||||
Long Term | ||||||||||||||||||||||||||||||||
Unquoted Investments in Mutual Funds: | ||||||||||||||||||||||||||||||||
DSP Merrill Lyinch Oppurtunities Fund — Dividend — Regular of the face value of Rs. 10 each fully paid up | 196,873 | 3,400,000 | — | — | — | — | 196,873 | 3,400,000 | ||||||||||||||||||||||||
DSPML Floating Rate Fund — Regular Plan — Weekly Dividend of the face value of Rs. 10 each fully paid up | 740,843 | 7,436,476 | 231,986 | 2,329,503 | 247,895 | 2,489,400 | 724,934 | 7,277,519 | ||||||||||||||||||||||||
DSPML Oppurtunities Fund — Dividend of the face value of Rs. 10 each fully paid up | 107,571 | 2,600,000 | 129,857 | 3,071,219 | 70,604 | 1,981,719 | 166,824 | 3,987,468 | ||||||||||||||||||||||||
HDFC Cash Management Fund — Savings Plan — Growth Option of the face value of Rs. 10 each fully paid up | 7,054,773 | 100,000,000 | 3,396,324 | 50,000,000 | 5,751,592 | 87,000,000 | 4,699,505 | 68,472,329 | ||||||||||||||||||||||||
HDFC Equity Fund — Dividend of the face value of Rs. 10 each fully paid up | 310,874 | 10,368,782 | 389,303 | 14,947,223 | — | — | 700,177 | 25,316,006 | ||||||||||||||||||||||||
HDFC Multiple Yield Fund — Growth of the face value of Rs. 10 each fully paid up | 723,138 | 8,000,000 | — | — | 723,138 | 8,808,685 | — | — | ||||||||||||||||||||||||
HDFC Multiple Yield Fund Plan 2005 — Growth of the face value of Rs. 10 each fully paid up | 2,100,000 | 21,000,000 | — | — | 2,100,000 | 23,148,300 | — | — | ||||||||||||||||||||||||
HDFC Top 200 Fund — Dividend of the face value of Rs. 10 each fully paid up | 150,410 | 3,300,000 | — | — | — | — | 150,410 | 3,300,000 |
20
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR ENDED 31ST MARCH 2007
6. | Details of Purchase and Sale of investments during the year ended 31st March 2007 |
Balance as at 31st March 2006 | Purchased during the Year | Sold during the Year | Balance as at 31st March 2007 | |||||||||||||||||||||||||||||
Investments | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | ||||||||||||||||||||||||
OEFD HSBC Equity Fund — Dividend of the face value of Rs. 10 each fully paid up | 165,474 | 3,300,000 | — | — | — | — | 165,474 | 3,300,000 | ||||||||||||||||||||||||
Prudential ICICI FMP — Growth Yearly XII — Yearly Plus of the face value of Rs. 10 each, fully paid up | 1,000,000 | 10,000,000 | — | — | 1,000,000 | 10,783,000 | — | — | ||||||||||||||||||||||||
Prudential ICICI Plan 1 Year Plus — Growth (Normal) of the face value of Rs. 10 each fully paid up | 3,000,000 | 30,000,000 | — | — | 3,000,000 | 32,038,800 | — | — | ||||||||||||||||||||||||
Reliance Fixed Tenor Fund Plan A — Growth Plan of the face value of Rs. 10 each fully paid up | 1,000,000 | 10,000,000 | — | — | — | — | 1,000,000 | 10,000,000 | ||||||||||||||||||||||||
Reliance Floating Rate Fund — Weekly Dividend Plan of the face value of Rs. 10 each fully paid up | 817,425 | 8,246,048 | 251,680 | 2,538,174 | 267,851 | 2,701,300 | 801,254 | 8,082,197 | ||||||||||||||||||||||||
Reliance Vision Fund — Dividend Plan of the face value of Rs. 10 each fully paid up | 41,285 | 2,067,327 | 75,075 | 3,291,932 | 40,780 | 2,086,592 | 75,580 | 3,335,789 | ||||||||||||||||||||||||
Standard Chartered Liquidity Manager Plus — Weekly Dividend of the face value of Rs. 1000 each fully paid up | 100,043 | 100,088,310 | 111,702 | 111,778,178 | — | — | 211,745 | 211,866,488 | ||||||||||||||||||||||||
Templeton India Equity Income Fund — Dividend of the face value of Rs. 10 each fully paid up | — | — | 488,759 | 5,000,000 | — | — | 488,759 | 5,000,000 |
21
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR ENDED 31ST MARCH 2007
6. | Details of Purchase and Sale of investments during the year ended 31st March 2007 |
Balance as at 31st March 2006 | Purchased during the Year | Sold during the Year | Balance as at 31st March 2007 | |||||||||||||||||||||||||||||
Investments | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | ||||||||||||||||||||||||
Templeton India Short Term Income Plan — Growth of the face value of Rs. 1000 each fully paid up | 23,815 | 30,000,000 | — | — | — | — | 23,815 | 30,000,000 | ||||||||||||||||||||||||
SUB TOTAL (A) | 17,532,524 | 349,806,943 | 5,074,686 | 192,956,229 | 13,201,860 | 171,037,796 | 9,405,350 | 383,337,796 | ||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||
Unquoted Investments in Mutual Funds: | ||||||||||||||||||||||||||||||||
Deutsche Fixed Term Fund — Series 8 — Dividend of the face value of Rs. 10 each fully paid up | 1,000,000 | 10,000,000 | — | — | 1,000,000 | 10,000,000 | — | — | ||||||||||||||||||||||||
HDFC Fixed Maturity Plans 3M June 2006(1) — Dividend of the face value of Rs. 10 each fully paid up | — | — | 3,000,000 | 30,000,000 | 3,000,000 | 30,005,700 | — | — | ||||||||||||||||||||||||
HDFC Fixed Maturity Plans 3M March 2006(1) — Institutional Plan — Dividend of the face value of Rs. 10 each fully paid up | 3,000,000 | 30,000,000 | — | — | 3,000,000 | 30,005,187 | — | — | ||||||||||||||||||||||||
HDFC Fixed Maturity Plans 3M May 2006(1) — Dividend of the face value of Rs. 10 each fully paid up | — | — | 3,000,000 | 30,000,000 | 3,000,000 | 30,005,100 | — | — | ||||||||||||||||||||||||
HDFC Fixed Maturity Plans 90D March 07(4) Retail Plan Dividend of the face value of Rs. 10 each fully paid up | — | — | 3,000,000 | 30,000,000 | — | — | 3,000,000 | 30,000,000 | ||||||||||||||||||||||||
HSBC Cash Fund — Institutional — Plus Weekly Dividend of the face value of Rs. 10 each fully paid up | 9,994,331 | 100,071,185 | 11,218,661 | 112,350,052 | 21,212,992 | 212,485,715 | — | — |
22
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR ENDED 31ST MARCH 2007
6. | Details of Purchase and Sale of investments during the year ended 31st March 2007 |
Balance as at 31st March 2006 | Purchased during the Year | Sold during the Year | Balance as at 31st March 2007 | |||||||||||||||||||||||||||||
Investments | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | ||||||||||||||||||||||||
HSBC Fixed Term Series 7 — Dividend of the face value of Rs. 10 each fully paid up | 1,000,000 | 10,000,000 | — | — | 1,000,000 | 10,000,700 | — | — | ||||||||||||||||||||||||
HSBC Fixed Term Series VIII — Dividend of the face value of Rs. 10 each fully paid up | 3,000,000 | 30,000,000 | — | — | 3,000,000 | 30,003,357 | — | — | ||||||||||||||||||||||||
HSBC Liquid Plus Institutional Plus — Weekly Dividend of the face value of Rs. 10 each fully paid up | — | — | 8,083,808 | 80,972,800 | — | — | 8,083,808 | 80,972,800 | ||||||||||||||||||||||||
Kotak FMP Series 23 — Dividend of the face value of Rs. 10 each fully paid up | 1,000,000 | 10,000,000 | — | — | 1,000,000 | 10,009,236 | — | — | ||||||||||||||||||||||||
Reliance Fixed Horizon Fund — II Monthly Plan — Series 1 — Retail Dividend Plan of the face value of Rs. 10 each fully paid up | — | — | 5,000,000 | 50,000,000 | 5,000,000 | 50,000,000 | — | — | ||||||||||||||||||||||||
Reliance Fixed Horizon Fund I — Monthly Plan — Series IV — Dividend of the face value of Rs. 10 each fully paid up | — | — | 5,000,000 | 50,000,000 | 5,000,000 | 50,000,000 | — | — | ||||||||||||||||||||||||
Reliance Fixed Horizon Fund — Dividend option of the face value of Rs. 10 each fully paid up | — | — | 3,000,000 | 30,000,000 | 3,000,000 | 30,000,000 | — | — | ||||||||||||||||||||||||
Reliance Monthly Interval Fund — Series I — Institutional Dividend Plan of the face value of Rs. 10 each fully paid up | — | — | 5,000,000 | 50,000,000 | — | — | 5,000,000 | 50,000,000 |
23
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR ENDED 31ST MARCH 2007
6. | Details of Purchase and Sale of investments during the year ended 31st March 2007 |
Balance as at 31st March 2006 | Purchased during the Year | Sold during the Year | Balance as at 31st March 2007 | |||||||||||||||||||||||||||||
Investments | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | Quantity | Rupees | ||||||||||||||||||||||||
Standard Chartered Fixed Maturity Plan — Quarterly Series — 5 of the face value of Rs. 10 each fully paid up | — | — | 2,016,940 | 20,169,400 | — | — | 2,016,940 | 20,169,400 | ||||||||||||||||||||||||
Standard Chartered Fixed Maturity Plan SCFMP — 3 — Dividend of the face value of Rs. 10 each fully paid up | 5,500 | 55,000 | — | — | 5,500 | 55,000 | — | — | ||||||||||||||||||||||||
Standard Chartered Fixed Maturity Plan SCFMP — 3 — Dividend of the face value of Rs. 10 each fully paid up | 1,000,000 | 10,000,000 | — | — | 1,000,000 | 10,000,000 | — | — | ||||||||||||||||||||||||
Standard Chartered Fixed Maturity Plan SCFMP — 4 — Dividend of the face value of Rs. 10 each fully paid up | 3,850 | 38,500 | — | — | 3,850 | 38,500 | — | — | ||||||||||||||||||||||||
Standard Chartered Fixed Maturity Plan SCFMP — 4 — Dividend of the face value of Rs. 10 each fully paid up | 1,000,000 | 10,000,000 | — | — | 1,000,000 | 10,000,000 | — | — | ||||||||||||||||||||||||
Tata Fixed Horizon Fund Series 8 — Scheme D — IP — Periodic Dividend of the face value of Rs. 10 each fully paid up | — | — | 2,000,000 | 20,000,000 | — | — | 2,000,000 | 20,000,000 | ||||||||||||||||||||||||
SUB TOTAL (B) | 21,003,681 | 210,164,685 | 50,319,409 | 503,492,252 | 51,222,342 | 512,608,495 | 20,100,748 | 201,142,200 | ||||||||||||||||||||||||
TOTAL (A+B) | 559,971,628 | 696,448,481 | 683,646,291 | 584,479,996 | ||||||||||||||||||||||||||||
24
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR
ENDED 31ST MARCH 2007
7 | Disclosure of Interest in Joint Ventures |
The Group’s interest in jointly controlled entities (incorporated Joint Ventures) are:
As at | ||||||||||
March 31, | ||||||||||
2007 | ||||||||||
Rupees | ||||||||||
I | ASSETS | |||||||||
1 | Fixed Assets | 2,214,961 | ||||||||
2 | Investments | — | ||||||||
3 | Deferred Tax Assets — Net | 363,111 | ||||||||
4 | Current Assets, Loans and Advances | |||||||||
a) | Jobs in Progress | — | ||||||||
b) | Sundry Debtors | 97,940,111 | ||||||||
c) | Cash and Bank Balance | 2,068,614 | ||||||||
d) | Loans, Advances and Other Current Assets | 5,758,919 | ||||||||
II | LIABILITIES | |||||||||
1 | Shareholders’ Funds — Reserves and Surplus | 11,384,787 | ||||||||
2 | Current Liabilities and Provisions | |||||||||
a) | Liabilities | 94,031,146 | ||||||||
b) | Provisions | 349,283 |
For the Year | ||||||||||
Ended | ||||||||||
March 31, 2007 | ||||||||||
Rupees | ||||||||||
III | INCOME | |||||||||
1 | Commission and Service Fees | 21,494,420 | ||||||||
2 | Other Income | 7,524,571 | ||||||||
IV | EXPENDITURE | |||||||||
1 | Administrative and General Expenses | 15,648,130 | ||||||||
2 | Depreciation | 882,055 | ||||||||
Profit before Taxation | 12,488,806 | |||||||||
Provision for taxation (including deferred taxation) | 4,660,733 | |||||||||
Profit after Taxation | 7,828,073 | |||||||||
V | OTHER MATTERS | |||||||||
Contingent Liabilities | — |
8 | Disclosure as required by Accounting Standard 19 on Leases, issued by the Institute of Chartered Accountants of India is given below: |
As lessee/licensee
(i) The Company, its subsidiaries and jointly controlled entities have taken various residential, office and godown premises under operating lease or leave and license agreements. These are not non-cancellable and
25
LINTAS INDIA PRIVATE LIMITED
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR
SCHEDULE 16
NOTES TO THE CONSOLIDATED ACCOUNTS AS AT AND FOR THE YEAR
ENDED 31ST MARCH 2007
range between 11 months and 9 years 11 months and are renewable by mutual consent on mutually agreeable terms.
(ii) Lease payments are recognised in the statement of Profit and Loss Account under ‘Rent’ in Schedule 15.
9 | Bank guarantees (secured against Margin Money Deposits aggregating Rs. 4,000,000) outstanding at year end aggregated Rs. 13,100,000. |
10 | Other Interest under Schedule 14 comprises interest on income tax refunds Rs. 15,766,308 and bank interest Rs. 3,358,630. |
11 | Earnings Per Share | 2006-2007 | ||||||||||
Profit after Taxation and Minority Interest for the year (Rs.)(A) | 326,682,896 | |||||||||||
Number of Equity Shares(B) | 48,000 | |||||||||||
Earnings per share (Rs.) — Basic and Diluted (A/B) | 6,805.89 | |||||||||||
Nominal value of an equity share (Rs.) | 100 |
12 | Provision for Contingencies with respect to indirect taxes made in accordance with the Company policy stated in Note 1(C)(h) above. |
Rupees | ||||
Opening Balance | — | |||
Add: Additional provision made | 18,451,667 | |||
Amount Utilised | — | |||
Provision Reversed | — | |||
Closing Balance | 18,451,667 | |||
The timing and the amount of cash outflows, if any, that may arise from the above matters will be determined only on settlement of the cases.
13 | The Board of Directors at their meeting held on 4th June 2007 approved the buy back of 3,730 shares of Rs.100 each which was subsequently ratified by the members at the Extraordinary General Meeting on 6th June 2007. The Company bought back 3,730 equity shares of Rs. 100 each from ‘A’ shareholders in proportion of their shareholding and the buy back procedures were completed as per the terms of the letter of offer dated 4th June 2007. Accordingly, with effect from 29th June 2007, the paid up capital is Rs. 4,427,000 (44,270 equity shares of Rs. 100 each). |
On 29th June 2007, the ‘A’ shareholders transferred 20,750 equity shares of Rs. 100 each to Interpublic Mauritius Limited (a subsidiary of Interpublic Group of Companies) as per Foreign Investment Promotion Board (FIPB) approval dated 31st May 2007. Subsequent to this transfer, the entire share capital of the Company is now held by two Overseas corporate bodies — Lowe & Partners Worldwide Inc. and Interpublic Mauritius Limited, both being subsidiaries of Interpublic Group of Companies.
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