SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

September 18, 2014

Commission File Number: 000-30735

 

Rediff.com India Limited

(Translation of registrant's name into English)

 

1st Floor, Mahalaxmi Engineering Estate, L.J. First Cross Road

Mahim (West), Mumbai 400 016

(Address of principal executive office)

 

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

 

Form 20-F þ   Form 40-F o

 

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

 

Yes o   No þ

 

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b)):

 

 

 
 

  

This report on Form 6-K shall be deemed to be incorporated by reference in the Registration Statements on Form S-8 (File Nos. 333-111432, 333-121773, 333-143836 and 333-143837) filed with the Securities and Exchange Commission and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

 

2
 

  

Rediff.com Indian Limited has scheduled the Annual General Meeting of its shareholders for 10:00 a.m. (Indian Standard Time) on September 29, 2014, at its registered office at 1st Floor, Mahalaxmi Engineering Estate, L.J. First Cross Road, Mahim (W), Mumbai 400 016, Maharashtra, India. A copy of its Annual Report for the fiscal year 2013-2014 prepared in accordance with the requirements of the Companies Act, 1956, is attached hereto as Exhibit 13.1. A copy of the notice and proxy form issued by Rediff.com India Limited and sent to its members (including Citibank, N.A., in its capacity as depositary under the Deposit Agreement dated as of June 13, 2000, as amended from time to time) is attached hereto as Exhibit 99.1.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Date:   September 18, 2014 Rediff.com India Limited
  (Registrant)
   
  By: /s/ Swasti Bhowmick
  Name: Swasti Bhowmick
  Title: Chief Financial Officer

 

[SIGNATURE PAGE TO FORM 6-K]

 

3
 

  

EXHIBIT NO. DESCRIPTION
   
13.1 Annual Report for the fiscal year 2013-2014 prepared in accordance with the requirements of the Companies Act, 1956.
   
99.1 Notice of Annual General Meeting of the Members of Rediff.com India Limited and proxy form.

 

4



 

Exhibit 13.1

 

REDIFF.COM INDIA LIMITED

19TH ANNUAL REPORT

2013-2014

(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 LLP

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   1
2.   Directors Report of Rediff.com India Ltd.   2-4
3.   Auditors’ Report of Rediff.com India Ltd.   5-9
4.   Balance Sheet and Statement of Profit and Loss, Notes thereto of Rediff.com India Ltd.   10-38
5.   Statement pursuant to Section 212 of the Companies Act 1956     39
6.   Directors Report of Vubites India Pvt. Ltd.   40-42
7.   Auditors’ Report of Vubites India Pvt. Ltd.   43-44
8.   Balance Sheet and Statement of Profit and Loss, Notes thereto of Vubites India Pvt. Ltd.   45-60
9.   Directors Report of Rediff Holdings Inc.   61
10.   Auditors’ Report of Rediff Holdings Inc.   62-63
11.   Balance Sheet and Statement of Profit and Loss, Notes thereto of Rediff Holdings Inc.   64-72
12.   Directors Report of India Abroad Publications Inc.   73
13.   Auditors’ Report of India Abroad Publications Inc.   74-75
14.   Balance Sheet and Statement of Profit and Loss, Notes thereto of India Abroad Publications Inc.   76-86
15.   Directors Report of India in New York Inc   87
16.   Auditors’ Report of India in New York Inc   88-89
17.   Balance Sheet and Statement of Profit and Loss, Notes thereto of India in New York Inc   90-95
18.   Directors Report of India Abroad Publications (Canada) Inc.   96

 
 

  

19.   Auditors’ Report of India Abroad Publications (Canada) Inc.   97-98
20.   Balance Sheet and Statement of Profit and Loss, Notes thereto of India Abroad Publications (Canada) Inc.   99-107
21.   Directors Report of Rediff.com Inc.   108
22.   Auditors’ Report of Rediff.com Inc.   109-110
23.   Balance Sheet and Statement of Profit and Loss, Notes thereto of Rediff.com Inc.   111-118
24.   Directors Report of Value Communications Corporation   119
25.   Auditors’ Report of Value Communications Corporation   120-121
26.   Balance Sheet and Statement of Profit and Loss, Notes thereto of Value Communications Corporation   122-127
27.   Proxy Form and Attendance Slip   128-129

 

 
 

 

NOTICE

 

Notice is hereby given that the Nineteenth Annual General Meeting of the Members of Rediff.com India Limited will be held on Monday, September 29, 2014, 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 financial Statements Balance Sheet as at March 31, 2014 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. Ashok Narasimhan, Director retiring by rotation and being eligible, offers himself for reappointment.

 

3.To appoint a Director in place of Mr. Rashesh Shah, 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.”

 

    By Order of the Board
    For Rediff.com India Limited
     
Place: Mumbai   /s/ Jyoti Ravi Sachdeva
Date: 4th September, 2014   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.

A PERSON CAN ACT AS A PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY AND HOLDING IN THE AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS. A MEMBER HOLDING MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS MAY APPOINT A SINGLE PERSON AS PROXY AND SUCH PERSON SHALL NOT ACT AS A PROXY FOR ANY OTHER PERSON OR MEMBER.

 

1
 

 

REDIFF.COM INDIA LIMITED

 

DIRECTORS’ REPORT

 

To,

The Members,

Rediff.com India Limited

 

Your Directors have pleasure in presenting to you the Nineteenth Annual Report together with the Audited Annual Accounts for the year ended March 31, 2014.

 

1.REDIFF.COM INDIA LTD.’S FINANCIAL HIGHLIGHTS

 

(a)Total Revenue:- 909 million (previous year 856 million).

 

(b)Net Profit/ Loss:- Total operating loss before exceptional item and tax is 305 million (previous year 273 million). Provision for diminution in Long term investment is 421 million (previous year 266 million). Total net loss for the year is 726 million (previous year net loss 540 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 Member
  M. Madhavan Nambiar 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

 

2
 

 

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, 2014 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.

 

3
 

 

REDIFF.COM INDIA LIMITED

 

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, 2014 and of the loss of the company for that period.
   
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, 2014 was 83 million (Previous year 29 million) and the foreign exchange outgo in the same period was 73 million (Previous year 66 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 4, 2014 /s/ Ajit Balakrishnan
  Chairman and Managing Director

 

4
 

 

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF

REDIFF.COM INDIA LIMITED

 

Report on the Financial Statements

 

We have audited the accompanying financial statements of REDIFF.COM INDIA LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2014, 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 notified under the Companies Act, 1956 (“the Act”) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of  General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) 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.

 

5
 

  

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, 2014;

 

(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 notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

 

(e)On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

 

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm Registration No. 117366W/W-100018)

 

  /s/Shyamak R Tata
  Partner
Mumbai, September 4, 2014 (Membership No.38320)

 

6
 

 

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)

 

In our opinion and according to the information and explanations given to us the nature of the Company’s business/activities during the year, clauses (ii), (viii), (xiii) and (xiv) of paragraph 4 of the Order are not applicable to the company.

 

(i)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 fixed assets have not been physically verified by the Management during the year but the Company has a system of verifying the fixed assets once in every three years. In our opinion the frequency of verification is at reasonable intervals.
(c)During the year, in our opinion, a substantial part of fixed asset has not been disposed off by the Company.

 

(ii)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.

 

(iii)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.

 

(iv)To the best of our knowledge and belief and according to the information and explanations given to us, there are no contracts or arrangements that needed to be entered in the Register maintained pursuant to Section 301 of the Act.

 

(v)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.

 

(vi)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.

 

7
 

  

(vii)According to the information and explanations given to us, in respect of statutory dues:

 

(a)The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of income tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues in arrears as at 31st March 2014 for a period of more than six months from the date they became payable.

 

In respect of Service tax, attention is invited to Note 32 relating to the unpaid service tax (including interest) amounting to Rs. 12,802,977; of which the amount payable for a period of more than six months from the date they become payable has not been ascertained.

 

(b)Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess, as applicable, which have not been deposited as on 31st March, 2014 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  Commissioner of Income Tax (Appeal)  2009-10 and 2010-11   4,484,908 

 

(viii)The accumulated losses of the Company at the end of the financial year are 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.

 

(ix)In our opinion and according to the information and explanations given to us, there were no loans taken by the Company from financial institutions and banks and the company has not issued any debentures.

 

(x)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.

 

(xi)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.

 

(xii)According to the information and explanations given to us, the Company has not availed any term loan.

 

(xiii)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.
   
 (xiv)During the year the Company has not made any preferential allotment of shares to the parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.
   
 (xv)According to the information and explanations given to us, the Company has not issued any debentures during the year.
   
 (xvi)The Company has not raised any money by public issue during the year.

 

8
 

 

(xvii)To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no significant fraud on the Company has been noticed or reported during the year.

 

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm Registration No. 117366W/W-100018)

 

  /s/Shyamak R Tata
  Partner
Mumbai, September 4, 2014 (Membership No. 38320)

 

9
 

 

 

REDIFF.COM INDIA LIMITED

 

Balance Sheet as at March 31, 2014

 

   Note  As at March 31, 2014   As at March 31, 2013 
          
I         EQUITY AND LIABILITIES             
1        Shareholders’ Funds             
(a)          Share Capital  3   74,050,890    74,050,890 
(b)          Reserves and Surplus  4   1,221,124,082    1,940,627,976 
       1,295,174,972    2,014,678,866 
2         Non - Current Liabilities             
(a)          Other Long Term Liabilities  5   19,188,361    11,803,771 
(b)          Long - Term Provisions  6   55,929,812    56,804,150 
       75,118,173    68,607,921 
3         Current Liabilities             
(a)          Trade Payables (refer Note 28)      185,936,378    197,396,399 
(b)          Other Current Liabilities  7   161,358,335    145,094,331 
(c)          Short - Term Provisions  8   8,206,839    7,444,602 
       355,501,552    349,935,332 
TOTAL      1,725,794,697    2,433,222,119 
II         ASSETS             
1         Non - Current Assets             
(a)          Fixed Assets  9          
(i)         Tangible Assets      80,922,082    141,934,911 
(ii)         Intangible Assets      96,713,356    90,371,503 
(iii)        Intangible Assets under Development      36,639,725    46,761,840 
       214,275,163    279,068,254 
(b)          Non - Current Investments  10   54,922,395    68,075,804 
(c)          Long - Term Loans and Advances  11   312,458,856    789,303,932 
       367,381,251    857,379,736 
2         Current Assets             
(a)          Trade Receivables  12   165,542,874    179,922,848 
(b)          Cash and Cash Equivalents  13   940,808,715    1,075,348,839 
(c)          Short-Term Loans and Advances  14   37,786,694    41,502,442 
       1,144,138,283    1,296,774,129 
TOTAL      1,725,794,697    2,433,222,119 
III       NOTES FORMING PART OF THE FINANCIAL STATEMENTS  1-35          

 

In terms of our report attached. For and on behalf of the Board of Directors
For Deloitte Haskins & Sells LLP  
Chartered Accountants  
   
/s/ Shyamak R Tata /s/ Ajit Balakrishnan /s/ Sunil Phatarphekar
Partner Chairman & Managing Director Director
  DIN: 00073814 DIN: 00005164
   
  /s/ Jyoti R Sachdeva
  Company Secretary
  Mumbai, India
  FCS 6794
Mumbai,  September 4, 2014 Mumbai,  September 4, 2014

 

10
 

  

REDIFF.COM INDIA LIMITED

 

Statement of Profit and Loss for the Year Ended March 31, 2014

 

   Note  For the year ended
March 31, 2014
   For the year ended
March 31, 2013
 
          
I Revenue From Operations  15   784,380,935    673,034,071 
II Other Income (Net)  16   124,533,664    183,250,707 
TOTAL REVENUE      908,914,599    856,284,778 
III Expenses:             
(a)  Employee Benefit Expenses  17   346,924,679    377,620,686 
(b)  Depreciation and Amortization Expense  9   139,709,101    153,416,360 
(c)  Operation and Other Expenses  18   727,496,674    599,119,716 
TOTAL EXPENSES      1,214,130,454    1,130,156,762 
IV LOSS BEFORE EXCEPTIONAL ITEMS AND TAX      (305,215,855)   (273,871,984)
V Exceptional Item:             
Diminution in Long Term Investments, etc.  31   421,138,377    266,183,605 
VI Provision for Tax      -    - 
VII LOSS FOR THE YEAR      (726,354,232)   (540,055,589)
VIII Earnings Per Equity Share  (Face Value of 5 each ) - Basic and Diluted      (49.04)   (36.47)
IX NOTES FORMING PART OF THE FINANCIAL STATEMENTS  1-35          

 

In terms of our report attached. For and on behalf of the Board of Directors
For Deloitte Haskins & Sells LLP  
Chartered Accountants  
   
/s/ Shyamak R Tata /s/ Ajit Balakrishnan /s/ Sunil Phatarphekar
Partner Chairman & Managing Director Director
  DIN: 00073814 DIN: 00005164
   
  /s/ Jyoti R Sachdeva
  Company Secretary
  Mumbai, India
  FCS 6794
Mumbai,  September 4, 2014 Mumbai,  September 4, 2014

 

11
 

  

REDIFF.COM INDIA LIMITED

 

Cash Flow Statement for the Year Ended March 31, 2014

 

     For the year ended
March 31, 2014
   For the year ended
March 31, 2013
 
         
Cash Flow from Operating Activities            
(Loss) Before Taxes     (726,354,232)   (540,055,589)
Adjustments for:            
Depreciation and Amortisation Expense     139,709,101    153,416,360 
Employee Stock Option Expenses     6,850,338    11,370,219 
Provision for Diminution in Long Term Investment     421,138,377    266,183,605 
Interest Income     (119,573,944)   (110,446,324)
(Write Back)/ Write Off of Provision of Doubtful Receivables     9,889,181    (5,199,050)
(Profit) / Loss on Sale of Investment     -    (64,200,000)
(Profit) / Loss on Sale of Fixed Assets     (28,326)   (49,336)
Unrealised Exchange Difference     8,855,392    837,604 
Operating Loss Before Working Capital Changes     (259,514,113)   (288,142,511)
Changes in Working Capital:            
Trade Receivables     3,687,933    107,143,361 
Loans and Advances     17,116,279    (1,860,804)
Trade Payables, Current Liabilities and Provisions     20,084,049    33,679,428 
Cash used in Operating Activities     (218,625,852)   (149,180,526)
Taxes Refund, Net of (Paid)     134,729,394    (7,854,334)
Net Cash used in Operating Activities (A)     (83,896,458)   (157,034,860)
Cash Flow From Investing Activities            
Payments to Acquire Fixed Assets     (86,310,732)   (94,775,793)
Proceeds from Sale of Fixed Assets     469,511    413,962 
Proceeds from Sale of long term Investment     -    79,200,000 
Loan given to Vubites India Pvt Ltd     (96,317,552)   (61,540,000)
Loan given to India abroad publication Inc.     (34,487,128)   (27,181,146)
Repayment of Loan from India abroad publications Inc.     83,666,293    - 
Interest Income Received     82,335,942    110,446,324 
Net Cash (used in)/from Investing Activities (B)     (50,643,666)   6,563,347 
Net (Decrease) in Cash and Cash Equivalents (A+B)     (134,540,124)   (150,471,513)
Cash and Cash Equivalents at the Beginning of the Year     1,075,348,839    1,225,820,352 
Cash and Cash Equivalents at the End of the Year     940,808,715    1,075,348,839 
Note ;            
Cash and Cash Equivalents Include:            
Cash on Hand     5,211    5,211 
Bank Balances     940,650,573    1,075,414,260 
Cash and Cash Equivalents     940,655,784    1,075,419,471 
Effect of Exchange Rate Changes     152,931    (70,632)
Cash and Cash Equivalents Restated     940,808,715    1,075,348,839 
NOTES FORMING PART OF THE FINANCIAL STATEMENTS  1-35         

 

In terms of our report attached. For and on behalf of the Board of Directors
For Deloitte Haskins & Sells LLP  
Chartered Accountants  
   
/s/ Shyamak R Tata /s/ Ajit Balakrishnan /s/ Sunil Phatarphekar
Partner Chairman & Managing Director Director
  DIN: 00073814 DIN: 00005164
   
  /s/ Jyoti R Sachdeva
  Company Secretary
  Mumbai, India
  FCS 6794
Mumbai,  September 4, 2014 Mumbai,  September 4, 2014

  

12
 

  

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’). These financial statements have been prepared to comply with the accounting standards notified under Section 211(3C) (which continues to be applicable in terms of General circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013) and other relevant provisions of the Companies Act, 1956.

 

b)Use of estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles in India requires the management to 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.

 

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REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

Revenue from display of 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. The Company earn revenues from the sending of email messages to its users on behalf of advertisers and such revenues are recognized ratably over the contracted period.

 

Fee based services

 

Online shopping (E-commerce) 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 recognizes as revenues the commission earned on these transactions and shipping costs recovered from customers. The Company provides incentives to its customers in the form of coupons and promo codes. These incentives are treated as reductions in revenue and in cases where such incentives exceed the commission amount; the excess is recognized as cost of revenue. 

 

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

 

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REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

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 five years. Maintenance expenses or costs that do not result in new features or functions are expensed as product development costs, when incurred.

 

e)Impairment of assets

 

The carrying values of assets/cash-generating units at each balance sheet date are reviewed for impairment 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.

 

oDefined-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.

 

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REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

oDefined-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

 

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 (American Depository Receipts) are converted to equity shares.

 

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REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

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.

 

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.

 

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REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

3.SHARE CAPITAL

 

   As at March 31, 2014   As at March 31, 2013 
   Number      Number    
Authorised                    
Equity Shares of 5 each   24,000,000    120,000,000    24,000,000    120,000,000 
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 

 

a.Reconciliation of shares outstanding at the beginning and at the end of the reporting period:

 

   As at March 31, 2014   As at March 31, 2013 
   Number      Number    
At the beginning of the year   14,810,178    74,050,890    14,810,178    74,050,890 
Shares issued during the year (on account of Stock Options exercised)   -    -    -    - 
Outstanding at the end of the period   14,810,178    74,050,890    14,810,178    74,050,890 

 

b.Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:

 

   As at March 31, 2014   As at March 31, 2013 
   Number      Number    
                 
    -    -    -    - 

 

c.Details of shares held by each shareholder holding more than 5% shares:

 

   As at March 31, 2014   As at March 31, 2013 
Name of shareholder  Number   % Holding   Number   % Holding 
Rediffusion Holdings Private Limited   2,200,002    14.85%   2,200,002    14.85%
Draper International India LP   2,178,000    14.71%   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%

 

18
 

 

 

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,
2014
   As at March 31,
2013
 
       
Securities premium account          
Opening balance   3,430,862,460    3,430,862,460 
Addition during the year (on account of Stock Options exercised)   -    - 
Closing balance   3,430,862,460    3, 430,862,460 
Stock option outstanding account          
Opening balance   127,901,477    116,531,258 
ESOP Compensation Cost   68,50,338    11,370,219 
Closing balance   134,751,815    127,901,477 
(Deficit) in the statement of profit and loss          
Opening balance   (1,618,135,961)   (1,078,080,372)
Deficit during the year   (726,354,232)   (540,055,589)
Closing balance   (2,344,490,193)   (1,618,135,961)
Total   1,221,124,082    1,940,627,976 

 

5.OTHER LONG-TERM LIABILITIES (UNSECURED)

Other long-term liabilities consist of the followings:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Income received in advance   19,188,361    11,803,771 
Total   19,188,361    11,803,771 

 

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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,
2014
   As at March 31,
2013
 
       
Provision for employee benefits:          
Gratuity (unfunded)   28,551,561    27,054,202 
Compensated absence (unfunded)   27,378,251    29,749,948 
Total   55,929,812    56,804,150 

 

7.OTHER CURRENT LIABILITIES

Other current liabilities consist of the followings:

   As at March 31,
2014
   As at March 31,
2013
 
       
Capital creditors   177,000    11,130,238 
Deposits from employees   3,849,887    3,849,887 
Advance received from customers   14,810,399    9,659,003 
Income received in advance   67,600,485    55,644,647 
Other Liabilities   1,175,483    2,566,118 
Statutory liabilities          
Tax deducted at source Payable   8,292,895    9,682,865 
Service Tax Payable   12,802,977    325,479 
Others   2,623,519    2,725,134 
Other payables to related parties (unsecured):          
Rediff.com Inc.   37,815,555    36,051,903 
Rediff Holding Inc.   3,805,388    6,492,621 
Value Communication Corporation   8,404,747    6,966,436 
           
Total   161,358,335    145,094,331 

 

8.SHORT – TERM PROVISIONS

Short-term provisions consist of the followings:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Provision for employee benefits:          
Gratuity (unfunded)   2,614,680    2,438,962 
Compensated absence (unfunded)   5,592,159    5,005,640 
Total   8,206,839    7,444,602 

 

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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, 2013
   Additions   Deletions   Gross Block
as at March
31, 2014
   Accumulated
Depreciation as
at April 1, 2013
   Depreciation
for the Year
   Deletions   Accumulated
Depreciation as
at March 31,
2014
   Net Block
Value as at
March 31,
2014
   Net Block
Value as at
March 31,
2013
 
Tangible assets                                                  
Furniture and fixture   20,542,335    161,996    -    20,704,331    (18,542,998)   (594,816)   -    (19,137,814)   1,566,517    1,999,337 
Computer   1,241,817,920    23,998,845    (330,853,350)   934,963,415    (1,124,616,248)   (81,178,890)   330,849,978    (874,945,160)   60,018,255    117,201,672 
Office equipment   17,387,912    803,488    (2,148,397)   16,043,003    (12,275,082)   (1,133,511)   2,094,358    (11,314,235)   4,728,768    5,112,830 
Vehicle   15,284,459    12,55,869    (1,433,488)   15,106,840    (6,275,260)   (1,874,451)   1,049,346    (7,100,365)   8,006,475    9,009,199 
Leasehold Improvement   24,990,385    -    -    24,990,385    (16,378,512)   (2,009,806)   -    (18,388,318)   6,602,067    8,611,873 
Total tangible assets   1,320,023,011    26,220,198    (334,435,235)   1,011,807,974    (1,178,088,100)   (86,791,474)   333,993,682    (930,885,892)   80,922,082    141,934,911 
Previous year   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    - 
Intangible assets                                                  
Software   228,439,244    59,259,480    -    287,698,724    (138,067,741)   (52,917,627)   -    (190,985,368)   96,713,356    90,371,503 
Total intangible assets   228,439,244    59,259,480    -    287,698,724    (138,067,741)   (52,917,627)   -    (190,985,368)   96,713,356    90,371,503 
Previous year   165,347,719    63,091,525    -    228,439,244    (82,585,619)   (55,482,122)   -    (138,067,741)   90,371503    - 
Intangible assets under development   -    -    -    -    -    -    -    -    36,639,725    46,761,840 
Grand Total   1,548,462,255    85,479,678    (334,435,235)   1,299,506,698    (1,316,155,841)   (139,709,101)   333,993,682    (1,121,871,260)   214,275,163    279,068,254 

 

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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, 2014
   As at March
31, 2013
 
              
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 
BigSlick Infotech Pvt. Ltd.   1    59,230    4,000,000    4,000,000 
              111,000,253    111,000,253 
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    1,599,246,611 
Less Provision for diminution in value of investments             1,544,324,216    1,531,170,807 
Net investments             54,922,395    68,075,804 

 

Book value of unquoted investments (net of provisions for diminution) – 54,922,395 (Previous Year 68,075,804)

 

Note : The provision for diminution in value of investment is as under (Amount in ) :

 

Name of the Company  2013-14   2012-13 
Traveljini.com Limited   60,300,253    60,300,253 
Tachyon Technologies Pvt. Ltd.   41,700,000    41,700,000 
Vakow Technologies Pvt.  Ltd.   5,000,000    5,000,000 
BigSlick Infotech Pvt. Ltd.   4,000,000    4,000,000 
Rediff Holding Inc., USA   1,079,560,605    1,079,560,605 
Value Communication Corporation, USA   340,609,949    340,609,949 
Vubites India Pvt. Ltd.   13,153,409    - 
           
TOTAL (Provision for diminution in value of investments)   1,544,324,216    1,531,170,807 

 

22
 

  

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,
2014
   As at March 31,
2013
 
       
Considered Good          
Rent deposits   40,836,191    39,987,191 
Loans to employees   2,856,976    1,736,658 
Recoverable taxes (net of provision of 2,075,691 as at March 31, 2013 and 2014)   57,085,836    154,563,726 
Prepaid expenses.   10,677,323    10,180,497 
Loans and advances to related parties:          
Rediff.com India Ltd. Employee Trust   201,002,530    201,002,530 
India Abroad Publication Inc.   -    70,165,914 
Considered Doubtful          
Loans and advances to related parties:          
Vubites India Pvt. Ltd.          407,984,968          
Less: diminution                    407,984,968   -    311,667,416 
    312,458,856    789,303,932 

 

12.TRADE RECEVABLES (Unsecured)

Trade receivables consist of the following:

 

      As at March
31, 2014
   As at March 31,
2013
 
          
(a)  Over six months from the date they were due for payments          
   (i)     Considered good          
   (ii)    Considered doubtful   -    1,903,991 
       22,460,553    21,876,674 
       22,460,553    23,780,665 
(b)  Others          
   (i)     Considered good   165,542,873    178,018,857 
   (ii)    Considered doubtful   9,113,482    - 
       174,656,355    178,018,857 
   Total (a+b)   197,116,908    201,799,522 
   Less: Provision for doubtful debts   31,574,034    21,876,674 
       165,542,874    179,922,848 

 

23
 

  

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,
2014
   As at March 31,
2013
 
          
(a)  Cash and cash equivalents          
   Balances with banks          
   In current account   110,761,734    48,037,231 
   In EEFC account   4,777,355    3,030,808 
   Cash on hand   5,211    5,211 
       115,544,300    51,073,250 
(b)  Other          
   In deposits account   825,264,415    1,024,275,589 
       825,264,415    1,024,275,589 
   Total (a+b)   940,808,715    1,075,348,839 

 

14.SHORT-TERM LOANS AND ADVANCES (Unsecured, considered good)

Short-term loans and advances consist of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Supplier advances   3,715,561    2,627,115 
Rent deposits   2,070,000    3,470,000 
Loan to employees   1,933,265    2,087,726 
Prepaid expenses   30,017,868    33,067,008 
Other loans and advances   50,000    250,593 
Total   37,786,694    41,502,442 

 

15.REVENUE FROM OPERATIONS

Revenue from operations consists of the following:

 

   For the year
ended March 31,
2014
   For the year
ended March 31,
2013
 
       
Online advertising   468,372,011    452,709,343 
Fee based services   316,008,924    220,324,728 
Total   784,380,935    673,034,071 

 

24
 

  

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,
2014
   For the year
ended March 31,
2013
 
       
Interest income:          
Interest on fixed deposits   80,787,692    106,201,609 
Interest on income-tax refund   37,251,504    2,427,292 
Interest others   1,534,748    1,817,423 
Profit on sale of long-term investments   -    64,200,000 
(Loss)/Gain on Sale of Fixed Assets   28,326    92,698 
Miscellaneous Income   4,931,394    3,312,635 
Provision for doubtful debts written back   -    5,199,050 
Total   124,533,664    183,250,707 

 

17.EMPLOYEE BENEFIT EXPENSES

Employee benefit expenses consist of the following:

   For the year
ended March 31,
2014
   For the year
ended March 31,
2013
 
       
Salaries and wages   316,882,634    338,974,679 
Contribution to provident fund   12,385,149    12,799,836 
Gratuity   3,018,443    7,434,551 
ESOP compensation costs   6,850,338    11,370,219 
Staff welfare expenses   7,788,115    7,041,401 
Total   346,924,679    377,620, 686 

 

25
 

  

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,
2014
   For the year
ended March 31,
2013
 
       
Content Charges   16,571,389    18,804,385 
Domain registration charges   24,664,923    21,716,779 
Subscription and SMS based costs   14,340,124    30,392,528 
E-Commerce – Courier, Freight & Forward   116,345,249    64,041,628 
Bandwidth   129,566,079    148,522,495 
Software Usage charges   34,821,938    28,675,109 
Product development charges   21,432,364    24,514,738 
Advertising   24,467,840    2,657,840 
Market support   71,060,592    41,166,234 
Rent and amenities   48,938,073    48,725,211 
Electricity charges   9,315,670    8,270,517 
Telecommunication   3,761,659    4,329,895 
Repairs and maintenance:          
Computers   35,477,938    39,024,484 
Others   1,479,941    1,263,830 
Insurance   14,905,967    19,094,062 
Travel and conveyance   27,006,621    32,460,137 
Rates and taxes   251,696    353,732 
Foreign exchange (gain)/ loss   (4,432,741)   495,334 
Bank Charges   8,940,325    6,697,493 
Provision for doubtful debts          
Write off of provision   9,697,360      
Bad debts written off   191,821    114,798,671 
Write back of Provision        (114,798,671)
Legal and professional fees   35,317,761    33,796,435 
Service Tax/Reversal of input credit (Refer note no. 32)   60,596,163    - 
Other Miscellaneous expenses   22,777,922    24,116,850 
Total   727,496,674    599,119,716 

 

26
 

  

REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

19.AUDITOR’S REMUNERATION

 

   2013-14   2012-13 
       
            
(i)  For service as auditors   2,000,000    2,000,000 
(ii)  For taxation matters   200,000    700,000 
(iii)  For other services (US GAAP and SOX)   7,050,000    7,050,000 
(iv)  For reimbursement of expenses   82,523    34,171 
(v)  For service tax*   1,153,500    1,209,324 
       10,486,023    10,993,495 

 

Auditors’ remuneration includes fees of NIL (2013: 5 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:

 

   2013-14
   2012-13
 
Benefit obligation at the beginning of the year   29,493,163    23,496,722 
Actuarial loss/(gain)   (4,216,225)   1,008,042 
Current service cost   4,604,420    4,139,798 
Interest cost   2,630,248    2,286,710 
Benefits paid   (1,345,365)   (1,438,109)
Benefit obligation at the end of the year   31,166,241    29,493,163 

  

Expense on defined benefit plan:

 

   2013-14
   2012-13
 
Service cost   4,604,420    4,139,798 
Interest cost   2,630,248    2,286,710 
Recognised net actuarial loss/(gain)   (4,216,225)   1,008,042 
Net gratuity cost   3,018,443    7,434,550 

 

27
 

  

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:

 

  2013-14   2012-13
Rate for discounting liabilities 9.00%   8.00%
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)
  Indian Assured
live mortality
table (2006-08)

 

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:

 

   2013-14   2012-13   2011-12   2010-11   2009-10 
                
Defined benefit obligation   31,166,242    29,493,164    23,496,723    20,732,081    17,342,909 
(Deficit)   (31,166,242)   (29,493,164)   (23,496,723)   (20,732,081)   (17,342,909)
Experience adjustment on plan liabilities   (1,104,278)   (544,577)   (55,456)   (1,058,058)   (1,231,042)

 

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 12,385,149 (Previous Year 12,799,836) 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.

 

28
 

  

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   16,500                
Expired   (4,750)   887           
Options outstanding, end of period   11,750         110 to 980    5.3 

 

Options exercisable as at March 31, 2014, were 8,000 (Weighted average exercise price 1,045).

 

(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   135,112                
Forfeited   (3,875)   331           
Options outstanding, end of period   131,237         251 to 1,279    2.5 

 

Options exercisable as at March 31, 2014, were 131,237 (Weighted average exercise price 697).

 

(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.

 

29
 

  

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   505,813                
Granted   1500    286           
Forfeited   (16,750)   301           
Options outstanding, end of period   490,563         10 to 1,279    4.9 

 

Options exercisable as at March 31, 2014, were 442,938 (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.

 

30
 

  

REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

(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.

   2013-14
   2012-13
 
Net loss as reported   (726,354,232)   (540,055,589)
Add: Stock-based employee compensation   6,850,338    11,370,219 
Less: Stock- based compensation expenses determined under fair value method (Proforma) #   29,230,896    41,214,467 
Proforma net loss   (748,743,790)   (569,899,837)
Loss per share          
Basic – as reported   (49.04)   (36.47)
  –Proforma   (50.56)   (38.48)
Diluted – as reported   (49.04)   (36.47)
  –Proforma   (50.56)   (38.48)

 

# 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 %.

 

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.

 

31
 

  

REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

  c.Associate Companies:

Tachyon Technology Private Limited (“Tachyon”)

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

 

Transactions with Related Parties during the year and balances outstanding as at March 31, 2014:

 

Name of the
Related party
  Transactions  2013-14
   2012-13
 
Value CommunicationsCorporation  Payable as at year end, net   8,404,747    6,966,436 
India abroad Publications, Inc.  Expenses incurred and other reimbursements by India Abroad Publication Inc on behalf of the Company   27,029    190,628 
  Expenses incurred and other reimbursements by the Company on behalf of India Abroad Publications, Inc.   6,677,099    11,675,892 
  Loan given during the year   27,783,000    27,181,146 
  Loan Repaid during the year   83,666,293    NIL 
   Loans and advances payable as at year end, net   NIL    70,165,914 
Rediff.com, Inc.  Payable as at year end   37,815,555    36,051,903 
Rediff Holdings, Inc.  Provision for diminution in value of Long Term Investment   NIL    266,183,605 

 

32
 

   

REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

Name of the
Related party
  Transactions  2013-14
   2012-13
 
   Payable as at year end, net   3,805,388    6,492,621 
Vubites India Private Limited  Expenses incurred and other reimbursements by the Company on behalf of Vubites India Private Limited   4,917,552    3,247,815 
   Loan given during the year (Interest free)   91,400,000    61,540,000 
   Loan and advances as at year end   NIL    311,667,416 
   Provision for diminution in value of Long Term Investment, etc   421,138,377    NIL 
Tachyon Technologies Limited  Product development expenses capitalised   Nil    52,000,00 
   Payable as at year end   Nil    800,000 
Rediff.com India Ltd Employee Trust  Loan and advances as at year end (Interest free)   201,002,530    201,002,530 

 

33
 

  

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:

 

 

   2013-14
   2012-13
 
Office Premises   44,002,682    43,298,367 
Residential flats for accommodation of employees   4,935,391    5,426,844 
Total   48,938,073    48,725,211 

 

The minimum annual rental commitments under operating leases are as follows:

 

   2013-14
   2012-13
 
Not later than one year   19,585,513    18,023,487 
Later than one year and not later than five years   5,123,324    210,000 
Total payments   24,708,837    18,233,487 

 

25.EARNING PER EQUITY SHARES

 

      2013-14   2012-13 
A.  Net (loss) attributable to equity shareholders ()    (726,354,232)   (540,055,589)
B.  Weighted average number of equity shares outstanding during the year   14,810,178    14,810,178 
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    14,810,178 
E.  Nominal value of Equity Shares ()   5.00    5.00 
   Basic Earnings per Share ()   (49.04)   (36.47)
   Diluted Earnings per Share ()   (49.04)   (36.47)

 

34
 

  

REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

26.CONTINGENCIES AND CAPITAL COMMITMENTS

 

Contingent liabilities:

 

During previous year 2012-13, Company had received a demand notice from Income Tax Authorities resulting in a contingent liability of interest u/s. 201 (1A) of 8,524,108. This was 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 matter is pending 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 :

 

   2013-14
   2012-13
 
Estimated amount of contracts remaining to be executed on capital account and not provided for   46,561,582    36,738,160 

 

35
 

  

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, 2014 and 2013.

Foreign exchange currency exposures not hedged by derivative instruments are:

 

      2013-14   2012-13 
Sl.
No.
  Particulars  Amount
$
   Amount
   Amount
$
   Amount
 
1  Amount receivable on account of sale of services   269,097    16,172,706    576,290    31,386,588 
2  Creditors payable on account of foreign currency expenditure   (167,928)   (10,092,464)   (84,438)   (4,592,508)
3  Foreign currency bank balances   79,490    4,777,354    55,825    3,030,808 
4  Amount (Payable) / Receivable (to)/from subsidiary companies   (832,374)   (50,025,690)   538,181    29,271,290 

 

28.MICRO AND SMALL ENTERPRISES

 

The information regarding Micro Enterprises and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

 

29.INCOME IN FOREIGN CURRENCIES

 

   2013-14
   2012-13
 
(i)  E-commerce services   1,505,454    1,424,585 
(ii)  Media, mobile and others services   82,337,466    27,981,955 
              
   Total   83,842,920    29,406,540 

 

36
 

  

REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

30.EXPENDITURE IN FOREIGN CURRENCIES

 

Particulars  2013-14
   2012-13
 
(i)  Professional charges   9,984,498    17,476,742 
(ii)  Product development   5,535,833    4,808,619 
(iii)  Dataline/ internet charges   4,014,196    8,604,741 
(iv)  Listing fees   450,750    2,091,033 
(v)  Software usage charges   29,931,999    14,005,397 
(vi)  Purchase of email domains   22,293,725    16,926,127 
(vii)  Advertising expenses   191,904    - 
(viii)  Other matters   705,839    2,111,690 
              
   Total   73,108,744    66,024,349 

 

31.PROVISION FOR DIMINUTION OF INVESTMENT AND LOAN

 

As at the year end 2014, the Company made provisions to recognise the other-than-temporary decline in the value of its long term investment and loan to its subsidiary company Vubites India Private Limited amounting to 13,153,409 and Rs. 407,984,968, respectively. During the previous year ended March 31, 2013, the Company had 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.

 

32.NOTE ON SERVICE TAX/REVERSAL OF INPUT CREDIT

 

The operating expenses (Note no. 18) includes an expense relating to service tax amounting to 60,596,163 (including resultant interest of 4,085,191)  26,379,570 pertaining to service tax of the previous year (including resultant interest of 1,642,122)] arising from an inadvertent excess availment of Cenvat credit against “selling of space or time slots for advertisements other than broadcast by radio or television” which were covered under negative list from July 2012. The company is in the process of determining and discharging its net unpaid obligations, as at 31 March 2014, of Rs. 12,802,977 in this regard.

 

37
 

 

REDIFF.COM INDIA LIMITED

 

Notes forming part of the Financial Statements

 

33.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/ reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

 

34.US BRANCH OFFICE

 

During the fiscal year ended March 31, 2014, Rediff opened a branch office in the United States of America. Its prime objective is to facilitate and expand the online advertising business in USA.

 

35.The previous year figures have been regrouped/ rearranged as necessary to make them comparable with those of the current year

 

  For and on behalf of the Board of Directors  
     
  /s/ Ajit Balakrishnan /s/ Sunil Phatarphekar
  Chairman & Managing Director Director
  DIN: 00073814 DIN: 00005164
     
   

/s/ Jyoti Ravi Sachdeva

Company Secretary

Mumbai, India

FCS 6794

Date: September 4, 2014

 

38
 

 

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-2014    31-Mar-2014    31-Mar-2014 
                
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  $0.0001    No par value  

Rs. 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*   141,188,163    Nil    (134,730,186)
                
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. 60.1

 

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, 2014. 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 4, 2014 Chairman & Managing Director  Director
  DIN: 00073814 DIN: 00005164
     
   /s/ Jyoti R Sachdeva  
   Company Secretary  
  FCS 6794  

 

39
 

 

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 2014.

 

1.FINANCIAL AND OPERATING RESULTS

 

During the year under review, the Company had incurred a loss of 135 million (previous year 111 million) after providing for depreciation of 48 million (previous year 60 million) and the said loss is carried forward to the next year.

 

2.DIVIDEND

 

Your Directors do not recommend any dividend for the year ended on March 31, 2014.

 

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, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

 

40
 

  

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 2014 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 2014 are given below:

  

  Earnings : Nil  
  Outgo : Nil  

 

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.

 

41
 

  

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 4, 2014  
  /s/ Swasti Bhowmick   /s/ Ashish Mehrotra
  Director Director
  Din – 02411091 Din - 02393919

 

42
 

 

Independent Auditors’ Report

 

TO THE MEMBERS OF VUBITES INDIA PRIVATE LIMITED

 

REPORT ON THE FINANCIAL STATEMENTS

 

We have audited the accompanying financial statements of Metaphor Communications Private Limited (the Company), which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss for the year then ended, and a summary of 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 notified under the Companies Act, 1956 (the Act) read with the  General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 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 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 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.

 

43
 

 

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 March 31, 2014;

 

(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

 

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 the 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 the Statement of Profit and Loss comply with Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

 

e. On the basis of the written representations received from the directors as on March 31, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of Section 274(1)(g) of the Act.

 

  For Vivek Mistry & Associates
  Chartered Accountants
  (Firm Registration No. 115553W)
   
  /s/ Vivek Mestry
  Proprietor
  Membership No: 49628

 

Place: Mumbai

 

Date: September 4, 2014

  

44
 

 

VUBITES INDIA PRIVATE LIMITED

Balance Sheet as at March 31, 2014

 

(in Rupees)

  

Particulars  Note
No.
   As at
March 31, 2014
   As at
March 31, 2013
 
                
 A   EQUITY AND LIABILITIES                 
                       
 1   Shareholders’ funds                 
                       
     (a)       Share capital   3    1,000,000     1,000,000  
     (b)       Reserves and surplus   4    (388,597,226)    (253,867,040 )
              (387,597,226)    (252,867,040 )
 2   Non-current liabilities                  
     Other Long Term Liabilities   5    407,984,968     311,667,416  
     Long-term provisions   6    2,940,933     3,239,463  
              410,925,901     314,906,879  
 3   Current liabilities                  
     (a)       Trade payables   7    10,217,492     9,157,596  
     (b)       Other current liabilities   8    7,070,937     2,789,685  
     (c)       Short-term provisions   9    460,773     528,605  
              17,749,202     12,475,886  
                       
     TOTAL        41,077,877     74,515,725  
                       
 B   ASSETS                 
                       
 1   Non-current assets                 
     (a)       Fixed assets   10             
     (i)        Tangible assets        11,988,416     32,125,417  
     (ii)       Intangible assets        128,628     24,852,932  
              12,117,044     56,978,349  
     (b)       Long-term loans and advances   11    11,696,507     6,798,229  
              23,813,552     63,776,578  
 2   Current assets                 
     (a)       Trade receivables   12    1,848,684     1,235,357  
     (b)       Cash and cash equivalents   13    5,830,238     3,681,114  
     (c)       Short-term loans and advances   14    9,585,405     5,822,676  
              17,264,327     10,739,147  
                        
     TOTAL        41,077,877     74,515,725  
                       
     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 Bhomick /s/Ashish Mehrotra
Membership no. 49628 Director Director
  DIN – 02411091 DIN No - 02393919
   
Mumbai, India Mumbai, India
Dated:  Sep 4,2014 Dated:  Sep 4,2014

 

45
 

  

VUBITES INDIA PRIVATE LIMITED

Profit and loss statement for the year ended March 31, 2014

  

(in Rupees)

  

Particulars  Note
No.
   For the year ended
March 31, 2014
   For the year ended
March 31, 2013
 
                 
 1   Revenue from operations   15    27,059,217    9,837,966 
                     
 2   Other income (net)   16    175,087    1,513,670 
                     
     TOTAL REVENUE        27,234,304    11,351,636 
                     
 3   Expenses:               
     (a) Employee benefit expenses   17    35,245,032    32,418,758 
     (b) Depreciation and amortization expenses   10    47,542,290    59,810,277 
     (c) Operation and other expenses   18    79,177,168    29,807,046 
                     
     TOTAL EXPENSES        161,964,490    122,036,081 
                     
 4   LOSS FOR BEFORE TAX        (134,730,186)   (110,684,445)
                     
     Tax Expense               
     Current tax expense for prior years        -    - 
                     
     LOSS FOR THE YEAR        (134,730,186)   (110,684,445)
                     
                     
 5   Earnings per equity share - Basic and Diluted   24    (134.73)   (110.68)
                     
                     
     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 Bhomick /s/Ashish Mehrotra
Membership no. 49628 Director Director
  DIN - 02411091 DIN No - 02393919
   
Mumbai, India Mumbai, India
Dated:  Sep 4,2014 Dated:  Sep 4,2014

 

46
 

 

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.

 

47
 

 

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.

 

oDefined-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.

 

oDefined-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

 

48
 

 

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.

 

49
 

 

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, 2014   As at march 31, 2013 
   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, 2014   As at march 31, 2013 
   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 

 

50
 

 

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, 2014   As at march 31, 2013 
   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, 2014   As at march 31, 2013 
   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, 2014   As at March 31, 2013 
       
Statement of Profit & Loss          
Opening balance   (253,867,040)   (143,182,595)
Deficit during the year   (134,730,186)   (110,684,445)
Closing balance   (388,597,226)   (253,867,040)
Total   (388,597,226)   (253,867,040)

 

5.OTHER LONG TERM LIABILITIES

Other Long Term Liabilities consist of following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Other payable to related party (Unsecured)          
Rediff.com India Limited   407,984,968    311,667,416 
Total   407,984,968    311,667,416 

 

51
 

 

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,
2014
   As at March 31,
2013
 
       
Provision for employee benefits:          
Gratuity   1,209,726    1,254,182 
Compensated absence   1,731,207    1,985,281 
Total   2,940,933    3,239,463 

 

7.TRADE PAYABLES

Trade Payables consist of following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Trade payables   1,02,17,492    9,157,596 
Total   1,02,17,492    9,157,596 

 

8.OTHER CURRENT LIABILITIES

Other Current Liabilities consist of the followings:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
a)     Statutory liabilities          
Tax deducted at source Payable   651,513    314,769 
Provident Fund  Payable   276,939    221,676 
Others   7,424    15,350 
b)    Advances from customers   6,135,061    2,237,890 
Total   7,070,937    2,789,685 

 

9.SHORT – TERM PROVISIONS

Short-term provisions consist of the followings:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Provision for employee benefits:          
Gratuity   103,007    156,110 
Compensated absence   357,766    372,495 
Total   460,773    528,605 

 

52
 

 

VUBITES INDIA PRIVATE LIMITED

 

Notes forming part of the Financial Statements

 

10.FIXED ASSETS

Fixed assets consist of the followings: (Amount in )

 

   Gross Block   Accumulated Depreciation / Amortisation   Net Block 
Description  As at 01/04/2013   Additions   Deletions   As at 31/03/2014   As at 01/04/2013   Additions   Deletions   As at 31/03/2014   As at 31/03/2014   As at 31/03/2013 
Tangible Assets                                                  
Leasehold improvements   14,57,434    -    -    14,57,434    14,57,434         -    14,57,434    -    - 
Furniture and fixtures   3,20,920    -    -    3,20,920    2,17,028    71,980    -    2,89,008    31,912    1,03,892 
Electrical Fittings   2,64,670    -    -    2,64,670    1,65,622    99,048    -    2,64,670    -    99,048 
Office Equipment   5,51,496    -    -    5,51,496    3,03,357    1,81,919    -    4,85,276    66,220    2,48,139 
Computers   8,72,97,294    26,80,986    -    8,99,78,280    5,56,22,956    2,24,65,038    -    7,80,87,994    1,18,90,285    3,16,74,338 
                                                   
Total tangible Assets   8,98,91,814    26,80,986    -    9,25,72,800    5,77,66,397    2,28,17,987    -    8,05,84,383    1,19,88,416    3,21,25,417 
Previous year   8,11,77,447    87,14,367    -    8,98,91,814    3,47,83,886    2,29,82,511    -    5,77,66,397    3,21,25,417    - 
Intangible Assets                                                  
Software   11,05,42,454    -    -    11,05,42,454    8,56,89,522    2,47,24,304    -    11,04,13,825    1,28,628    2,48,52,932 
                                                   
Total intangible assets   11,05,42,454    -    -    11,05,42,454    8,56,89,522    2,47,24,304    -    11,04,13,825    1,28,628    2,48,52,932 
Previous year   11,04,11,392    1,31,062    -    11,05,42,454    4,88,61,756    3,68,27,766    -    8,56,89,522    2,48,52,932    - 
Grand Total   20,04,34,268    26,80,986    -    20,31,15,254    14,34,55,919    4,75,42,290    -    19,09,98,209    1,21,17,044    5,69,78,349 
Previous year   19,15,88,839    88,45,428    -    20,04,34,268    8,36,45,642    5,98,10,277    -    14,34,55,919    5,69,78,349    - 

 

53
 

 

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,
2014
   As at March 31,
2013
 
       
Unsecured Considered Good          
Rent deposits   950,400    950,400 
Employee Advances   269,954    827,750 
Prepaid expenses   -    11,630 
Recoverable taxes   10,476,153    5,008,449 
Total   11,696,507    6,798,229 

 

12.TRADE RECEIVABLES (Unsecured)

Trade Receivables consists of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Unsecured:          
a)    Debts outstanding for more than six months from the date they are due for payment.          
-     Considered good   -    - 
-     Considered doubtful   1,663,877    - 
   1,663,877    - 
b)    Other Debts          
-     Considered good   1,848,684    1,235,357 
-     Considered doubtful   607,405    - 
    2,456,089      
Less:  Provision for Doubtful Debts   (2,271,282)   - 
Total   1,848,684    1,235,357 

 

54
 

 

VUBITES INDIA PRIVATE LIMITED

 

Notes forming part of the Financial Statements

 

13.CASH AND BANK BALANCES

Cash & Bank Balances consists of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
(i) Balances with Banks :          
  In Current Accounts   5,693,642    3,562,423 
  In Fixed Deposit Accounts   123,244    113,866 
           
(ii) Cash in Hand   13,352    4,825 
           
Total   5,830,238    3,681,114 

 

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.

 

14.SHORT TERM LOANS & ADVANCES

Short Term Loans & Advances consists of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Unsecured considered good :          
a)     Employee Advances   595,576    678,426 
b)     Capital advance   1,330,806    1,187,768 
c)     Advance to vendors   6,748,322    1,958,213 
d)     Security deposit to vendors   300,000    1,800,000 
e)     Prepaid expenses   610,700    198,269 
Total   9,585,405    5,822,676 

 

15.REVENUE FROM OPERATIONS:

Revenue from Operation consists of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Advertising Receipts (Net of Service Tax)   2,70,59,217    9,837,966 
Total   2,70,59,217    9,837,966 

 

55
 

 

VUBITES INDIA PRIVATE LIMITED

 

Notes forming part of the Financial Statements

 

16.OTHER INCOME

Other Income consists of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Interest Received   26,430    25,977 
Miscellaneous Income   5,619      
Foreign exchange gain   143,038      
Total   175,087    1,513,670 

 

17.EMPLOYEE BENEFIT EXPENSES

Employee Benefit Expenses consists of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Salaries and wages   32,993,351    30,144,337 
Gratuity   215,021    492,719 
Contribution to PF   1,476,927    1,344,714 
Staff welfare   5,59,733    436,988 
Total   3,52,45,032    32,418,758 

 

56
 

 

VUBITES INDIA PRIVATE LIMITED

 

Notes forming part of the Financial Statements

 

18.OTHER EXPENSES

Other Income consists of the following:

 

   As at March 31,
2014
   As at March 31,
2013
 
       
Advertisement insertion charges   4,84,49,081    15,215,432 
MSO MG Charges   1,10,45,155    - 
MSO Internet Charges   7,03,469    - 
Bandwidth charges   7,68,239    792,450 
Rent and amenities   1,903,502    2,161,001 
Electricity charges   542,684    772,100 
Telecommunication   393,765    146,588 
Repairs and maintenance          
Computer   3,77,658    359,111 
Other   82,665    144,063 
Insurance   5,10,460    65,950 
Travel and conveyance   37,05,341    1,842,395 
Rates and Taxes   3,75,033    39,064 
Legal and Professional Fees   42,64,512    4,083,831 
Commission & Brokerage   -    28,000 
Office Expenses   55,007    102,060 
Product Development Charges   -    100,000 
Freight & Forwarding Charges   44,755    133,327 
Security Service Charges   199,720    149,561 
Consumables - Stores & Spares   3,39,878    662,699 
Sundry balances written off   -      
Virtual Storage / Servers   12,86,985    1,353,229 
Office Maintenance   1,259,397    1,259,398 
Foreign Exchange Loss   -    150,331 
Provision for doubtful debts   22,71,282    - 
Miscellaneous expenses   5,98,580    246,456 
           
Total   79,177,168    29,807,046 

 

19.Expenditure In Foreign Currency (on accrual basis):

 

Particulars  2013-14   2012-13 
       
Software cards   -    2,499,921 
Total   -    2,499,921 

 

57
 

 

VUBITES INDIA PRIVATE LIMITED

 

Notes forming part of the Financial Statements

 

20.Payment to auditors (net of service tax):

 

Particulars  2013-14   2012-13 
       
a)  Statutory audit fees   100,000    100,000 
b)  Other Services   2,000    4,500 
c)  Tax Audit Fees   30,000    - 
d)  Service Tax (*)   16,315    12,916 

 

(*) 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:

 

   2013-14   2012-13 
       
Benefit obligation at the beginning of the year   14,10,292    917,573 
Actuarial losses   (295,491)   (119,765)
Current service cost   374,012    275,385 
Interest cost   136,500    97,569 
Benefit obligation at the end of the year   13,12,733    14,10,292 

 

Expenses on defined benefit plan:

 

   2013-14   2012-13 
       
Service cost   374,102    275,385 
Interest cost   136,500    97,569 
Recognised net actuarial losses   (295,491)   (119,765)
Net gratuity cost   215,021    492,719 

 

58
 

 

VUBITES INDIA PRIVATE 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:

 

  2013-14
  2012-13
 
Rate for discounting liabilities 9.00%   8.00%  
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)
  Indian Assured
Lives Mortality
(2006-08)
 

 

The estimate of future salary increase, considered in the actuarial valuation, take account of inflation, seniority, promotion, and other relevant facto The above information is certified by the actuary.

Experience adjustment:

 

   2013-14   2012-13 
       
Defined benefit obligation   13,12,733    14,10,292 
(Deficit)   (13,12,733)   (14,10,292)
Experience adjustment on plan liabilities   (132,679)   (34,779)

 

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:

 

   2013-14   2012-13 
Particulars      
Office Premises   1,903,502    2,161,001 

 

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:

 

   2013-14   2012-13 
Particulars      
         
Not later than one year   288,000    288,000 
           
Total payments   288,000    288,000 

 

59
 

 

VUBITES INDIA PRIVATE LIMITED

 

Notes forming part of the Financial Statements

 

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, 2014:

 

Name of the    2013-14   2012-13 
Related party  Transactions      
            
Rediff.com India Limited  Reimbursement of expenses   4,917,552    3,247,815 
              
   Loans received during the year   91,400,000    61,540,000 
   Payable as at year end   407,984,968    311,667,416 

 

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)

 

      2013-14   2012-13 
A.  Net loss attributable to equity shareholders ()    134,730,186    110,684,445 
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 ()   (134.73)   (110.68)
   Diluted Earning per Share ()   (134.73)   (110.68)

 

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.

  

60
 

 

Rediff Holding Inc.

 

BOARD OF DIRECTORS

 

Mr. Ajit Balakrishnan

Mr. Sridhar Iyengar

Mr. Sunil Phatarphekar

Mr. M. Madhavan Nambiar

 

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, 2014.

 

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

 

Profit for the Year is US $ 2,349,221/-. After giving effect taxes, net profit of US $ 2,339,370/- was carried to Balance Sheet.

 

DIVIDENDS

 

For the year ended March 31, 2014, your Directors do not recommend any dividend.

 

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

  

/s/ Ajit Balakrishnan

Director

 

Date: September 4, 2014

 

61
 

  

AUDITORS’ REPORT

 

To

The Members,

Rediff Holdings Inc.

 

Report on the Financial Statements

We have audited the accompanying financial statements of REDIFF 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, 2014, 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.

 

62
 

 

 

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, 2014; 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

F.R.No. 107824W

 

/s/ B.M. Pendse

Partner.

M.No. 32625

 

Place :  Mumbai
Date : September 4, 2014

 

63
 

Rediff Holdings Inc.

 

Balance Sheet as at 31st March, 2014

 

     2013-2014   2012-2013 
 Particulars  Note No   (USD)   (USD) 
I. EQUITY AND LIABILITIES               
(1) Shareholder's Funds               
(a) Share Capital   3    1,107    1,107 
(b) Reserves and Surplus   4    5,372,632    3,033,261 
(2) Non Current Liabilities               
(a) Other Non Current Liabilities   5    4,906,905    6,898,690 
(3) Current Liabilities               
(a) Trade payables   6    84,500    100,000 
(b) Short-term provisions   7    10,000    - 
         10,375,143    10,033,058 
II. ASSETS               
(1) Non-current assets               
(a) Non-current investments   8    5,390,536    6,795,522 
(b) long-term loans and advances   9    3,170,613    3,225,711 
(2) Current assets               
(a) Cash and cash equivalents   10    1,200,058    11,825 
(b) Other current assets   11    613,937      
         10,375,143    10,033,058 
                
Significant accounting policies   1 &2           
Notes on financial statements   3 to 17           

 

For Patkar & Pendse   For and on behalf of the board
Chartered Accountants   Rediff Holdings Inc.
Registration no. 107824W    
     
/s/ B.M. Pendse   /s/ Ajit Balakrishnan
Partner   Director
M. No. 32625    
     
Mumbai, India   Mumbai, India
Date: September 4, 2014   Date: September 4, 2014

 

64
 

 

Rediff Holdings Inc.

 

Statement of Profit and Loss for the year ended 31st March, 2014

 

     2013-2014   2012-2013 
Particulars  Note No   (USD)   (USD) 
I. Revenue from operations        -    - 
II. Other income   12    2,741,251      
Total Revenue        2,741,251    - 
III. Expenses:               
Employee benefit expense   13    223,643    222,770 
Other expenses   14    168,387    190,098 
         392,030    412,868 
IV Profit before exceptional Items & tax        2,349,221    (412,868)
V. Exceptional Items               
Impairment provision for promisory note        -    1,100,000 
VI. Profit before tax        2,349,221    (1,512,868)
VII. Tax expense:               
Current tax        9,850    5,804 
VIII. Profit/Loss for the period        2,339,370    (1,518,672)
IX. Earning per equity share:               
Basic        0.21    (0.14)
Diluted        0.21    (0.14)
                
Significant accounting policies   1 &2           
Notes on financial statements   3 to 17           

 

For Patkar & Pendse   For and on behalf of the board
Chartered Accountants   Rediff Holdings Inc.
Registration no. 107824W    
     
/s/ B.M. Pendse   /s/ Ajit Balakrishnan
Partner   Director
M. No. 32625    
     
Mumbai, India   Mumbai, India
Date: September 4, 2014   Date: September 4, 2014

 

65
 

 

REDIFF HOLDINGS INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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

 

66
 

 

REDIFF HOLDINGS INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

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.

 

67
 

  

REDIFF HOLDINGS INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

68
 

  

Rediff Holdings Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

NOTE 3: SHARE CAPITAL

 

  As at 31 March 2014   As at 31 March 2013 
Particulars  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:

 

   As at 31 March 2014   As at 31 March 2013 
   Equity Shares   Equity Shares 
Particulars  Number   Value   Number   Value 
Shares outstanding at the beginning of the year   11,066,667    1,107    11,066,667    1,107 
Shares issued during the year   -    -    -    - 
Shares outstanding at the end of the year   11,066,667    1,107    11,066,667    1,107 

 

3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:

 

   As at 31 March 2014   As at 31 March 2013 
Particulars  Number   Value   Number   Value 
Rediff.com India Ltd. (Holding Company)   11,066,667    1,107    11,066,667    1,107 
    11,066,667    1,107    11,066,667    1,107 

 

3.3 Details of shares held by each shareholder holding more than 5% shares:

 

   As at 31 March 2014   As at 31 March 2013 
Name of Shareholder  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.

 

NOTE 4: RESERVES AND SURPLUS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
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   (20,965,632)   (19,446,960)
(+) Net profitFor the current year   2,339,370    (1,518,672)
Closing Balance   (18,626,261)   (20,965,632)
Total   5,372,632    3,033,261 

 

69
 

 

NOTE 5: OTHER NON CURRENT LIABILITES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Loans and advances from related parties          
(Unsecured)          
India Abroad Inc.   1,471,591    3,493,376 
Rediff.com Inc.   3,435,313    3,405,314 
Total   4,906,905    6,898,690 

 

NOTE 6: TRADE PAYABLES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Trade payables   84,500    100,000 
Total   84,500    100,000 

 

NOTE 7: SHORT TERM PROVISIONS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Less: Advance tax and Tax deducted at source   -    - 
Total   10,000    - 

 

NOTE 8: NON-CURRENT INVESTMENTS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
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 $0.01per share         
Less: Provision for diminution   10,231,676    10,231,676 
    4,519,690    4,519,690 
Rediff.com Inc.   870,846    870,846 
Less: Provision for diminution   -    - 
    870,846    870,846 
In Other Companies (Fully Paid-up, Unquoted)          
Runa Inc.   1,404,986    1,404,986 
Less: Sale of investment   1,404,986    - 
    -    1,404,986 
Total   5,390,536    6,795,522 

 

70
 

 

NOTE 9: LONG TERM LOANS AND ADVANCES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Loans and advances to related parties          
Rediff.com India Ltd.   493,535    548,632 
Value Communication Corporation   2,677,078    2,677,079 
    3,170,613    3,225,711 
Promissory notes   1,100,000    1,100,000 
Less: Provision for dimination   1,100,000    1,100,000 
    -    - 
Total   3,170,613    3,225,711 

 

NOTE 10: CASH AND CASH EQUIVALENTS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Balance with Banks - in Current Accounts        
 In Current accounts   1,199,083    10,849 
In Deposit account   975    976 
Total   1,200,058    11,825 

 

NOTE 11: OTHER CURRENT ASSETS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Investment sale proceeds receivable   613,937    - 
Total   613,937    - 

 

NOTE 12: OTHER INCOME

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Profit on sale of investments   2,740,940    - 
Excess Provisions Written Back   311    - 
Total   2,741,251    - 

 

NOTE 13: EMPLOYEE BENEFIT EXPENSE

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Salaries and Wages    210,517    209,895 
Staff Welfare Expenses    13,127    12,875 
Total   223,643    222,770 

 

71
 

 

NOTE 14: OTHER EXPENSES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Travelling expenses   14,476    5,713 
Professional charges   83,400    73,897 
Telephone expenses   1,830    3,415 
Insurance charges   -    32,431 
Office expenses   -    5,444 
Payroll Processing Charges   3,322    3,687 
Misc Write off/back   -    - 
Bank Charges   359    511 
Total   168,387    190,098 

 

NOTE 15: 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 16: DEFERRED TAX

 

As of March 31, 2014, the Company has net operating loss carry forwards of approx $ 4,014,000 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 17: PRIOR YEAR COMPARATIVES

 

Prior year figures have been regrouped / reclassified to confirm with the current year.

  

72
 

 

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, 2014.

 

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 $ 2,184,209/-. Gross Loss (before depreciation & amortization) is US $ 770,539 /-. After giving effect to other adjustments, net loss of US $ 779,504/- was carried to Balance Sheet.

 

DIVIDENDS

 

For the year ended March 31 2014, your Directors do not recommend any dividend.

 

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

  

/s/ Ajit Balakrishnan

Director

 

Date: September 4, 2014

 

73
 

  

AUDITORS’ REPORT

 

To

The Board of Directors,

India Abroad Publications Inc.

 

Report on the Financial Statements

We have audited the accompanying financial statements of INDIA 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, 2014, 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.

 

74
 

 

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, 2014;

 

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

F.R.No. 107824W

 

/s/ B.M. Pendse

Partner.

M.No. 32625

 

Place : Mumbai

Date : September 4, 2014

 

75
 

 

India Abroad Publications, Inc.

 

Balance Sheet as at March 31, 2014

 

Particulars   Note No     2013-2014
(USD)
    2012-2013
(USD)
 
                       
I. EQUITY AND LIABILITIES                      
(1) Shareholder's Funds                      
(a) Share capital   3       31,981       31,981  
(b) Reserves and surplus   4       (1,796,201 )     (1,016,697 )
(2) Non Current Liabilities                      
(a) Other non current liabilities   5       3,160,936       4,470,890  
(3) Current Liabilities                      
(a) Trade payables   6       499,189       468,769  
(b) Other current liabilities   7       306,267       270,149  
Total           2,202,172       4,225,092  
II. ASSETS                      
(1) Non-current assets                      
(a) Fixed assets   8                  
     (i) Tangible assets           5,912       45,063  
(b) Non-current investments   9       129,793       129,793  
(2) Long Term Loans & Advances   10       1,537,005       3,499,212  
(2) Current assets                      
(a) Trade receivables   11       248,484       311,577  
(b) Cash and cash equivalents   12       113,664       77,243  
(c) Short-term loans and advances   13       119,352       114,244  
(d) Other current assets   14       47,962       47,962  
Total           2,202,172       4,225,094  
Significant accounting policies   1&2                  
Notes on financial statements   3 to 21                  

 

For Patkar & Pendse For and on behalf of the board
Chartered Accountants India Abroad Publications, Inc.
   
/s/ B.M. Pendse /s/ Ajit Balakrishnan
Partner Director
   
Mumbai, India Mumbai, India
Date: September 4, 2014 Date: September 4, 2014

 

76
 

  

India Abroad Publications, Inc.

 

Statement of Profit and Loss for the year ended March 31, 2014

 

Particulars  Note No  2013-2014
(USD)
   2012-2013
(USD)
 
      $   $ 
I. Revenue from operations  15   2,159,762    2,201,421 
II. Other Income  16   24,447    13,302 
       2,184,209    2,214,723 
III. Expenses:             
Employee benefit expense  17   951,173    890,063 
Depreciation and amortization expense      6,096    12,560 
Other expenses  18   2,003,575    2,206,862 
       2,960,844    3,109,485 
IV. Loss before tax      (776,635)   (894,762)
              
V. Tax expense             
Current tax      2,869    - 
VI. Loss for the year      (779,504)   (894,762)
VII. Earnings per equity share:             
(1) Basic      (0.24)   (0.28)
(2) Diluted      (0.24)   (0.28)
Significant accounting policies  1&2          
Notes on financial statements  3 to 21          

 

For Patkar & Pendse For and on behalf of the board
Chartered Accountants India Abroad Publications, Inc.
   
/s/ B.M. Pendse /s/ Ajit Balakrishnan
Partner Director
   
Mumbai, India Mumbai, India
Date: September 4, 2014 Date: September 4, 2014

 

77
 

  

INDIA ABROAD PUBLICATIONS INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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

 

78
 

 

INDIA ABROAD PUBLICATIONS INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

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.

 

79
 

  

INDIA ABROAD PUBLICATIONS INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

80
 

  

India Abroad Publications, Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

(Amt. in USD)

 

   Current Year   Previous Year 
  As at 31.03.2014   As at 31.03.2013 
 Particulars  Number   Value   Number   Value 
NOTE 3: SHARE CAPITAL                    
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:

 

   As at 31 March 2014   As at 31 March 2013 
  Equity Shares   Equity Shares 
Particulars  Number   Value   Number   Value 
Shares outstanding at the beginning and end of the year   3,198,080    31,981    3,198,080    31,981 
Shares issued during the year   -    -    -    - 
Shares outstanding at the end of the year   3,198,080    31,981    3,198,080    31,981 

 

3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:

 

   As at 31 March 2014   As at 31 March 2013 
Particulars  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:

 

   As at 31 March 2014   As at 31 March 2013 
Name of Shareholder  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.

 

81
 

  

NOTE 4: RESERVES AND SURPLUS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
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   (1,229,143)   (334,381)
Deficit for the year   (779,504)   (894,762)
Closing Balance   (2,008,647)   (1,229,143)
Total   (1,796,201)   (1,016,697)

 

NOTE 5: OTHER NON CURRENT LIABILITIES

 

  Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Other payables to related parties: (Unsecured)          
Rediff.com India Ltd.   1,363,823    2,789,692 
Value Communication Corporation   68,329    68,328 
India In New York Inc.   1,728,784    1,612,870 
Total   3,160,936    4,470,890 

 

NOTE 6: TRADE PAYABLES

 

  Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Trade Payables   499,189    468,769 
Total   499,189    468,769 

 

NOTE 7: OTHER CURRENT LIABILITIES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Advances from customers   70,020    51,505 
Income received in advance (Unearned revenue)   236,248    218,644 
Total   306,267    270,149 

 

82
 

  

India Abroad Publications, Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

(Amt. in USD)

 

NOTE 8: FIXED ASSETS

 

   Gross Block   Accumulated Depreciation   Net Block 
Fixed Assets  Balance as at
1 April 2013
   Additions   Acquired
through
business
combinations
   Deletions   Balance as at
31 March
2014
   Balance as at
1 April 2013
   Depreciation
charge for the
year
   Deletions   Balance as at
31 March
2013
   Balance as at
31 March
2014
   Balance as at
31 March
2013
 
(i) Tangible Assets                                                       
Machinery and Equipment   192,983    6,325    -    73,560    125,748    192,839    3,518    73,560    122,797    2,951    144 
Furniture and fixtures   43,607    -    -    25,910    17,697    38,068    2,578    25,910    14,736    2,961    5,539 
Telephone System   75,564    -    -    75,564    -    75,564         75,564    -    -    - 
Office Renovation   155,796    -    -    155,796    -    155,796         155,796    -    -    - 
Subtotal   467,950    6,325    -    330,830    143,445    462,267    6,096    330,830    137,533    5,912    5,683 
(ii) CWIP   39,380    -         39,380    -    -    -    -    -    -    39,380 
Subtotal   39,380    -         39,380    -    -    -    -    -    -    39,380 
Total   507,330    6,325         370,210    143,445    462,267    6,096    330,830    137,533    5,912    45,063 
Previous year's figures   505,237    5,420    (3,327)        507,330    449,928    12,339    -    462,267    45,061    - 

 

83
 

  

India Abroad Publications, Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

NOTE 9: NON-CURRENT INVESTMENTS

 

  Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
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

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Loans and advances to related parties          
(Unsecured, Considered good)          
Rediff Holding Inc.   745,319    2,717,526 
India Abroad Publications (Canada) Inc.   791,686    781,686 
Total   1,537,005    3,499,212 

 

NOTE 11: TRADE RECEIVABLES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
(Unsecured, Considered good)          
Debts outstanding over six months from the due date of payment   52,763    307,077 
Less: Provision for doubtful debts   52,763    307,077 
Others   248,484    311,577 
Less: Provision for doubtful debts   -    - 
    248,484    311,577 
Total   248,484    311,577 

 

NOTE 12: CASH AND CASH EQUIVALENTS

 

  Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Balance with Banks - in Current Accounts          
In Current accounts   113,664    77,243 
Total   113,664    77,243 

 

84
 

  

NOTE 13: SHORT TERM LOANS AND ADVANCES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Advances recoverable in cash or kind          
(Unsecured, Considered good)          
Advances and Deposits   87,387    87,387 
Prepaid Expenses   25,115    22,007 
Advance to Employees   6,850    4,850 
Total   119,352    114,244 

 

Interest free loans payable on demand

 

NOTE 14: OTHER CURRENT ASSETS

 

  Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
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

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Subscription Income   197,878    236,278 
Classified Income   290,461    370,175 
Display Income   1,664,833    1,594,090 
Retail Sale   6,590    878 
Total   2,159,762    2,201,421 

 

NOTE 16: OTHER INCOME

 

Particulars  Current Year   Previous Year 
   As at 31.03.2014   As at 31.03.2013 
Interest   2    188 
Royalty   4,485    5,930 
Misc Income   9,459    7,184 
Excess Provisions Written Back   10,501    - 
Total   24,447    13,302 

 

NOTE 17: EMPLOYEE BENEFIT EXPENSE

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Salaries and Allowances   793,517    752,283 
Staff Welfare Expenses   157,656    137,780 
Total   951,173    890,063 

 

85
 

  

NOTE 18: OTHER EXPENSES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Production Expenses   725,931    783,638 
Editorial Expenses   105,468    131,267 
Circulation Expenses   482,066    507,271 
Advertising and Promotion   69,864    148,768 
Rent   213,998    204,959 
IA Person Of the Year Expenses   169,218    142,273 
Office Expenses   55,420    53,679 
Bank Charges   42,723    58,628 
Telephone and Telegrams   18,043    23,683 
Electricity Expenses   20,418    20,879 
Professional fees   -    2,270 
Provision for doubtful debts   -    22,702 
Internet-bandwidth cost   7,774    7,980 
Exchange loss   47,024    91,899 
Dues and Subscriptions   6,248    6,966 
Miscelleneous Expenses Written-Off   39,380    - 
Total   2,003,575    2,206,862 

 

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:

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Leased Premises   213,998    204,959 
Total   213,998    204,959 

 

NOTE 20: EARNINGS IN FOREIGN CURRENCY

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Advertising Revenue   -    253,852 
Total   -    253,852 

 

NOTE 21: PRIOR YEAR COMPARATIVES

 

Prior year figures have been regrouped / reclassified to confirm with the current year.

 

86
 

 

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, 2014.

 

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$ 103,830/- and the net profit of US $ 103,830/- 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/ Ajit Balakrishnan

Director

 

Date: September 4, 2014 24, 2012

 

87
 

 

AUDITORS’ REPORT

 

To

The Members,

India In New York Inc.

 

Report on the Financial Statements

We have audited the accompanying financial statements of INDIA 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, 2014, 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.

 

88
 

  

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, 2014;

 

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

F.R.No. 107824W

 

/s/ B.M. Pendse

Partner.

M.No. 32625

 

Place : Mumbai

Date : September 4, 2014

 

89
 

 

India In New York, Inc.

 

Balance Sheet as at March 31, 2014

 

Particulars  Note
No
  2013-2014
(USD)
   2012-2013
(USD)
 
I. EQUITY AND LIABILITIES             
(1) Shareholder's Funds             
(a) Share capital  3   -    - 
(b) Reserves and surplus  4   1,774,593    1,670,763 
(2) Current Liabilities             
(a) Other current liabilities  5   12,247    14,546 
       1,786,840    1,685,309 
II. ASSETS             
(1) Non-Current assets             
Long term loans & advances  6   1,728,783    1,612,868 
(2) Current assets             
(a) Trade receivables  7   31,783    64,704 
(b) Cash and cash equivalents  8   26,274    7,737 
       1,786,840    1,685,309 
              
Significant accounting policies  1 & 2          
Notes on financial statements  3 to 11          

 

For Patkar & Pendse   For and on behalf of the board
Chartered Accountants   India In New York, Inc.
Registration no. 107824W    
     
/s/ B.M. Pendse    /s/ Ajit Balakrishnan
Partner    Director
M. No. 32625    
     
Mumbai, India    Mumbai, India
Date: September 4, 2014    Date: September 4, 2014

 

90
 

 

India In New York, Inc.

 

Statement of Profit and Loss for the year ended March 31, 2014

 

Particulars  Note
No
  2013-2014
(USD)
   2012-2013
(USD)
 
I. Revenue from operations  9   103,830    111,332 
Total      103,830    111,332 
II. Expenses:             
Other expenses  10   -    67 
Total Expenses      -    67 
III. Profit for the period      103,830    111,265 
IV. Earning per equity share:             
(1) Basic      1,038    1,113 
(2) Diluted      1,038    1,113 
              
Significant accounting policies  1 & 2          
Notes on financial statements  3 to 11          

 

For Patkar & Pendse   For and on behalf of the board
Chartered Accountants    India In New York, Inc.
Registration no. 107824W    
     
/s/ B.M. Pendse    /s/ Ajit Balakrishnan
Partner    Director
M. No. 32625    
     
Mumbai, India   Mumbai, India
Date: September 4, 2014   Date: September 4, 2014

 

91
 

  

INDIA IN NEW YORK, INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

92
 

 

INDIA IN NEW YORK, INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

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.

 

93
 

 

India In New York, Inc.

 

 Notes to Financial Statements for the year ended March 31, 2014

 

(Amt. in USD)

NOTE 3: SHARE CAPITAL

 

   As at 31 March 2014   As at 31 March 2013 
Particulars  Number   Value   Number   Value 
Authorised                    
Equity Shares of no par value   200    -    200    - 
Issued and Subscribed                    
Equity Shares of no par value   100    -    100    - 
    100    -    100    - 

 

3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:

 

   As at 31 March 2014   As at 31 March 2013 
   Equity Shares   Equity Shares 
Particulars  Number   Value   Number   Value 
Shares outstanding at the beginning of the year   100    -    100    - 
Shares issued during the year   -    -    -    - 
Shares outstanding at the end of the year   100    -    100    - 

 

3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:

 

   As at 31 March 2014   As at 31 March 2013 
Particulars  Number   Value   Number   Value 
India Abroad Inc. (Holding Company)   100    -    100    - 
    100    -    100    - 

 

3.3 Details of shares held by each shareholder holding more than 5% shares:

 

   As at 31 March 2014   As at 31 March 2013 
Name of Shareholder  No. of Shares
held
   % of Holding   No. of
Shares held
   % of Holding 
India Abroad Inc. (Holding Company)   100    100%   100    100%
    100    100%   100    100%

 

3.4 Terms / rights attached to equity shares

 

In respect of every ordinary share, voting right shall be in thes same proportion as the capital paid upon such Ordinary share bears to the total paid up ordinary capital of the Company.

 

NOTE 4: RESERVES AND SURPLUS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
a) Securities Premium Account   25,000    25,000 
b) Surplus          
Opening balance   1,645,763    1,534,498 
(+) Net Profit for the current year   103,830    111,265 
Closing Balance   1,749,593    1,645,763 
    1,774,593    1,670,763 

 

94
 

 

India In New York, Inc.

 

Notes to Financial Statements for the year ended March 31, 2014

 

(Amt. in USD)

 

NOTE 5: OTHER CURRENT LIABILITIES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Deposits received from customers   12,247    14,546 
(Unsecured)          
    12,247    14,546 

 

NOTE 6: LONG TERM LOANS AND ADVANCES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Loans and advances to related parties        
(Unsecured, Considered good)        
India Abroad Inc. (Holding Company)   1,728,783    1,612,868 
    1,728,783    1,612,868 

 

NOTE 7: TRADE RECEIVABLES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
(Unsecured, Considered good)        
Debts outstanding over six months from the due date of payment  -   - 
Others   31,783    64,704 
    31,783    64,704 

 

NOTE 8: CASH AND CASH EQUIVALENTS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Balances with Banks - Current accounts        
Citibank   26,274    7,737 
    26,274    7,737 

 

NOTE 9: REVENUE FROM OPERATIONS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Display income   103,830    111,332 
    103,830    111,332 

 

NOTE 10: OTHER EXPENSES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Paper and Printing Expenses   -    67 
    -    67 

 

NOTE 11: PRIOR YEAR COMPARATIVES

 

Prior year figures have been regrouped / reclassified to confirm with the current year.

 

95
 

 

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, 2014.

 

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 Net profit of C$ 50,428/- was carried to Balance Sheet.

 

DIVIDENDS

 

For the year ended March 31, 2014, your Directors do not recommend any dividend.

 

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

 

/s/ Ajit Balakrishnan

Director

 

Date: September 4, 2014

 

96
 

 

 

AUDITORS’ REPORT

 

To

The Members,

India Abroad Publications (Canada) Inc.

 

Report on the Financial Statements

We have audited the accompanying financial statements of INDIA ABROAD PUBLICATIONS (CANADA) INC., a Company incorporated in the United States, (“the Company”), which comprise the Balance Sheet as at March 31, 2014, 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.

 

97
 

 

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, 2014;

 

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

F.R.No. 107824W

 

/s/ B.M. Pendse

Partner.

M.No. 32625

 

Place : Mumbai

Date : September 4, 2014

 

98
 

 

India Abroad Publications (Canada), Inc.

 

Balance Sheet as at March 31, 2014

 

Particulars  Note
No
   2013-2014
(C$)
   2012-2013
(C$)
 
I. EQUITY AND LIABILITIES               
(1) Shareholder's Funds               
(a) Share capital   3    -    - 
(b) Reserves and surplus   4    (673,802)   (724,230)
(2) Non Current Liabilities               
(a) Other non current liabilities   5    676,065    666,065 
(3) Current Liabilities               
(a) Trade payables   6    15,356    114,655 
(b) Other current liabilities   7    (17,846)   (17,465)
         (227)   39,025 
II. ASSETS               
(1) Non-current assets               
(a) Fixed assets               
 Tangible assets   8    -    - 
(1) Current assets               
(a) Trade receivables   9    (1,134)   7,525 
(b) Cash and cash equivalents   10    908    31,500 
         (227)   39,025 
Significant accounting policies   1 & 2           
Notes on financial statements   3 to 15           

 

For Patkar & Pendse   For and on behalf of the board
Chartered Accountants   India Abroad Publications (Canada), Inc.
     
/s/ B.M. Pendse   /s/ Ajit Balakrishnan
Partner   Director
M. No. 32625    
     
Mumbai, India   Mumbai, India
Date: September 4, 2014   Date: September 4, 2014

 

99
 

  

India Abroad Publications (Canada), Inc.

 

Statement of Profit and Loss for the year ended March 31, 2014

 

Particulars  Note
No
   2013-2014
(C$)
   2012-2013
(C$)
 
I. Revenue from operations   11    -    68,685 
II. Other Income   12    53,543    3,135 
         53,543    71,820 
II. Expenses:               
Employee benefit expense   13    -    114,210 
Other expenses   14    3,115    214,770 
         3,115    328,980 
III. Profit /(Loss) for the year        50,428    (257,160)
IV. Earning per equity share:               
(1) Basic        0.31    (1.58)
(2) Diluted        0.31    (1.58)
                
Significant accounting policies   1 & 2           
Notes on financial statements   3 to 15           

 

For Patkar & Pendse   For and on behalf of the board
Chartered Accountants   India Abroad Publications (Canada), Inc.
     
/s/ B.M. Pendse   /s/ Ajit Balakrishnan
Partner   Director
M. No. 32625    
     
Mumbai, India   Mumbai, India
Date: September 4, 2014   Date: September 4, 2014

 

100
 

 

INDIA ABROAD PUBLICATIONS (Canada) INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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:

 

101
 

 

INDIA ABROAD PUBLICATIONS (Canada) INC.

 

Notes to Financial Statements for the year ended 31.03.2014

 

Furniture and fixtures 7 years
Office equipment 5 years

 

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.

 

102
 

 

India Abroad Publications (Canada), Inc.

 

Notes to Financial statements for the year ended March 31, 2014

(Amt. in C$)

 

NOTE 3: SHARE CAPITAL

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
   Number   Value   Number   Value 
Authorised                    
Equity Shares of no par value   -    -    -    - 
Issued and Subscribed                    
Equity Shares of no par value   162,974    -    162,974    - 
    162,974    -    162,974    - 

 

3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:

 

   As at 31.03.2014   As at 31.03.2013 
Particulars  Equity Shares   Equity Shares 
   Number   Value   Number   Value 
Shares outstanding at the beginning of the year   162,974    -    162,974    - 
Shares issued during the year   -    -    -    - 
Shares outstanding at the end of the year   162,974    -    162,974    - 

 

3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:

 

   As at 31.03.2014   As at 31.03.2013 
Particulars  Number   Value   Number   Value 
India Abroad Inc. (Holding Company)   162,974    -    162,974    - 
    162,974    -    162,974    - 

 

3.3 Details of shares held by each shareholder holding more than 5% shares:

 

   As at 31.03.2014   As at 31.03.2013 
Name of Shareholder  No. of Shares held   % of Holding   No. of Shares
held
   % of Holding 
India Abroad Inc. (Holding Company)   162,974    100%   162,974    100%
    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.

 

NOTE 4: RESERVES AND SURPLUS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Particulars          
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   (867,204)   (610,044)
(+) (Net Loss) For the current year   50,428    (257,160)
Closing Balance   (816,776)   (867,204)
    (673,802)   (724,230)

 

103
 

  

NOTE 5: OTHER NON CURRENT LIABILITIES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Payable to related parties : (Unsecured)          
India Abroad Publication inc.   676,065    666,065 
    676,065    666,065 

 

NOTE 6: TRADE PAYABLES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Trade Payables   15,356    114,655 
    15,356    114,655 

 

NOTE 7: OTHER CURRENT LIABILITIES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Advances from customers   (17,846)   (17,465)
    (17,846)   (17,465)

 

104
 

  

India Abroad Publications (Canada), Inc.

 

Notes to Financial statements for the year ended March31, 2014

(Amt. in C$)

 

NOTE 8: FIXED ASSETS

 

Fixed Assets  Gross Block   Accumulated Depreciation   Net Block 
   Balance
as at 1
April
2013
   Additions/
(Disposals)
   Acquired
through
business
combinations
   Revaluations/
(Impairments)
   Balance
as at 31
March
2014
   Balance
as at 1
April
2013
   Depreciation
charge for
the year
   Adjustment
due to
revaluations
   On
disposals
   Balance
as at 31
March
2014
   Balance
as at 31
March
2014
   Balance
as at 31
March
2013
 
Tangible Assets                                                            
Machinery and Equipment   -    -    -    -    -    -    -    -    -    -    -    - 
Furniture and Fixtures   -    -    -    -    -    -    -    -    -    -    -    - 
 Total   -    -    -    -    -    -    -    -    -    -    -    - 
                                                             
Previous year figures   -    -    -    -    -    -    -    -    -    -    -    - 

 

105
 

 

NOTE 9: TRADE RECEIVABLES

  

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
(Unsecured, Considered good)          
Debts outstanding over six months from the due date of payment   -    - 
Others   (1,134)   7,525 
    (1,134)   7,525 

 

NOTE 10: CASH AND CASH EQUIVALENTS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Balances with Banks          
In current accounts   908    31,500 
    908    31,500 

 

NOTE 11: REVENUE FROM OPERATIONS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Subscription Income   -    15,194 
Classified Income   -    550 
Display Income   -    52,583 
Retail Sale   -    358 
    -    68,685 

 

NOTE 12: OTHER INCOME

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Excess provisions written back          
i) Printing   28,000      
ii) Marketing Commission   25,543    3135 
    53,543    3,135 

 

NOTE 13: EMPLOYEE BENEFIT EXPENSE

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Salaries and Wages   -    114,210 
    -    114,210 

 

106
 

  

NOTE 14: OTHER EXPENSES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Printing   -    124,904 
Mailing & Distribution   -    65,476 
Editorial Expenses   -    11,654 
Office Expenses   1,207    8,061 
Bank charges   -    25 
Telephone Expenses   664    1,310 
Professional Fees   1,243    2,500 
Miscelleneous Expenses   -    840 
    3,115    214,770 

 

NOTE 15: PRIOR YEAR COMPARATIVES

 

Prior year figures have been regrouped / reclassified to confirm with the current year.

 

107
 

 

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, 2014.

 

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 $ 475,220/- Gross loss before taxes is US $ 86,875/-. After giving effect to other adjustments, the net loss of US $ 88,030/- 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/ Ajit Balakrishnan

Director

 

Date: September 4, 2014

 

108
 

 

 

AUDITORS’ REPORT

 

To

The Members,

Rediff.Com Inc.

 

Report on the Financial Statements

We have audited the accompanying financial statements of REDIFF.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, 2014, 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.

 

109
 

 

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, 2014;

 

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

F.R.No. 107824W

 

/s/ B.M. Pendse

Partner.

M.No. 32625

 

Place : Mumbai

Date  : September 4, 2014

  

110
 

Rediff.com Inc.

 

Balance Sheet as at March 31, 2014

 

Particulars  Note
No
   2013-2014
(USD)
   2012-2013
(USD)
 
I. EQUITY AND LIABILITIES              
(1) Shareholder's Funds              
(a) Share Capital  3    5    5 
(b) Reserves and Surplus  4    5,759,241    5,847,271 
(2) Current Liabilities              
(a) Trade payables  5    52,682    46,000 
        5,811,928    5,893,276 
II. ASSETS              
(1) Non-current assets              
(a) Fixed assets              
(i) Tangible assets  6    -    - 
(b) Long-term loans and advances  7    5,724,402    5,743,981 
(2) Current assets              
(a) Trade receivables  8    72,749    137,256 
(b) Cash and cash equivalents  9    14,777    12,039 
        5,811,928    5,893,276 
               
Significant accounting policies  1&2           
Notes on financial statements  3 to 13           

 

     
For Patkar & Pendse   For and on behalf of the board
Chartered Accountants   Rediff.com Inc.
Registration no. 107824W    
     
/s/ B.M. Pendse   /s/ Ajit Balakrishnan
Partner   Director
M. No. 32625    
     
Mumbai, India   Mumbai, India
Date: September 4, 2014   Date: September 4, 2014

 

111
 

 

Rediff.com Inc.

 

Statement of Profit and Loss for the year ended March 31, 2014

 

  Note   2013-2014   2012-2013 
 Particulars   No   (USD)   (USD) 
I. Revenue from operations  10    475,220    744,030 
Total Revenue       475,220    744,030 
II. Expenses:              
Employee benefit expense  11    491,845    454,381 
Other expenses  12    70,250    107,852 
Total Expenses       562,095    562,233 
III. Loss for the year       (86,875)   181,797 
IV. Tax expense:              
(1) Current tax       1155    3,464 
V. Loss for the year       (88,030)   178,333 
IV. Earning per equity share:              
(1) Basic       (17.61)   35.67 
(2) Diluted       (17.37)   36.36 
               
Significant accounting policies  1&2           
Notes on financial statements  3 to 13           

 

For Patkar & Pendse    For and on behalf of the board
Chartered Accountants   Rediff.com Inc.
 Registration no. 107824W    
     
/s/ B.M. Pendse   /s/ Ajit Balakrishnan
Partner    Director
M. No. 32625    
     
Mumbai, India    Mumbai, India
Date: September 4, 2014    Date: September 4, 2014

 

112
 

 

Rediff.com Inc.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

113
 

 

Rediff.com Inc.

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

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.

 

114
 

  

Rediff.com Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

(Amt. in USD)

NOTE 3: SHARE CAPITAL

 

   Current Year   Previous Year 
   As at 31.03.2014   As at 31.03.2013 
Particulars  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 
    5,000    5    5,000    5 

 

3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:

 

   As at 31.03.2014   As at 31.03.2013 
   Equity Shares   Equity Shares 
Particulars  Number   Value   Number   Value 
Shares outstanding at the beginning of the year   5,000    5    5,000    5 
Shares issued during the year   -    -    -    - 
Shares outstanding at the end of the year   5,000    5    5,000    5 

 

3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:

 

   As at 31.03.2014   As at 31.03.2013 
Particulars  Number   Value   Number   Value 
Rediff Holding Inc. (Holding company)   5,000    5    5,000    5 
    5,000    5    5,000    5 

  

3.3 Details of shares held by each shareholder holding more than 5% shares:

 

   As at 31.03.2014   As at 31.03.2013 
Name of Shareholder  No. of Shares
held
   % of
Holding
   No. of Shares
held
   % of
Holding
 
Rediff Holding Inc. (Holding company)   5,000    100%   5,000    100%
    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.

 

115
 

 

Rediff.com Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

(Amt. in USD)

NOTE 4: RESERVES AND SURPLUS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
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   2,515,126    2,336,793 
(-) Loss for the current year   (88,030)   178,333 
Closing Balance   2,427,096    2,515,126 
Total   5,759,241    5,847,271 

 

NOTE 5: TRADE PAYABLES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Micro, Small and Medium Enterprises  -   - 
Others   52,682    46,000 
    52,682    46,000 

 

Rediff.com Inc.

 

Notes to Financial statements for the year ended 31.03.2014

 

(Amt. in USD)

NOTE 6: FIXED ASSETS

 

   Gross Block   Accumulated Depreciation   Net Block 
Fixed Assets  Balance as
at 1 April
2013
   Additions/
(Disposals)
   Acquired
through
business
combinations
   Revaluations/
(Impairments)
   Balance as
at 31
 March 2014
   Balance as
at 1 April
2013
   Depreciation
charge for
the year
   Adjustment
due to
revaluations
   On
disposals
   Balance as
at 31
March 2014
   Balance
as at 1
April
2013
   Balance
as at 31
March
2014
 
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)   -    -    -    -    - 

   

116
 

 

 

Rediff.com Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

(Amt. in USD)

NOTE 7: LONG TERM LOANS AND ADVANCES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Loans and advances to related parties          
(Unsecured, Considered good)          
Rediff.com India Ltd.   1,562,818    1,562,818 
Rediff Holding Inc.   3,435,314    3,405,314 
India Abroad Publications Inc.   726,270    775,849 
    5,724,402    5,743,981 

 

NOTE 8: TRADE RECEIVABLES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
(Unsecured, Considered good)          
Debts outstanding over six months from the due date of payment   2,142    167,004 
Less: Provision for doubtful debts   2,142    167,004 
    -    - 
Others   72,749    137,256 
Less: Provision for doubtful debts   -    - 
    72,749    137,256 
    72,749    137,256 

 

NOTE 9: CASH AND CASH EQUIVALENTS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Balance with Banks - Current Account        
Citibank   14,777    12,039 
    14,777    12,039 

 

NOTE 10: REVENUE FROM OPERATIONS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Display Income   475,220    744,030 
    475,220    744,030 

 

NOTE 11: EMPLOYEE BENEFIT EXPENSE

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Salaries and Allowances   491,845    454,381 
    491,845    454,381 

 

117
 

 

 Rediff.com Inc.

 

Notes to Financial statements for the year ended March 31, 2014

 

(Amt. in USD)

NOTE 12: OTHER EXPENSES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Travelling expenses   -    1,355 
Payroll processing fee   3,691    3,976 
Insurance charges   64,564    75,801 
Office expenses   1,995    2,624 
Provision for doubt ful debts   -    24,096 
    70,250    107,852 

 

NOTE 13: PRIOR YEAR COMPARATIVES

 

Prior year figures have been regrouped / reclassified to confirm with the current year.

 

118
 

  

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, 2014.

 

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/ Ajit Balakrishnan

Director

 

Date: September 4, 2014

 

119
 

 

 

AUDITORS’ REPORT

 

To

The Members,

Value Communications Corporation

.

 

Report on the Financial Statements

We have audited the accompanying financial statements of VALUE 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, 2014, 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.

 

120
 

  

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, 2014;

 

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

F.R.No. 107824W

 

/s/ B.M. Pendse

Partner.

M.No. 32625

 

Place : Mumbai

Date  : September 4, 2014

 

 

121
 

 

 

Value Communications Corporation

 

Balance Sheet as at 31st March, 2014

 

Particulars  Note
No
   2013-2014
(USD)
   2012-2013
(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 
(3) Current Liabilities               
Trade payables   6    14,369    14,369 
         208,175    208,175 
II. ASSETS               
(1) Non-Current assets               
Long-term loans and advances   7    208,175    208,175 
         208,175    208,175 
Significant accounting policies   1 & 2           
Notes on financial statements   3 to9           

 

For Patkar & Pendse For and on behalf of the board
Chartered Accountants Value Communications Corporation
Registration no. 107824W  
   
/s/ B.M. Pendse /s/ Ajit Balakrishnan
Partner Director
M. No. 32625  
   
Mumbai, India Mumbai, India
Date: September 4, 2014 Date: September 4, 2014

 

122
 

 

Value Communications Corporation

 

Profit and Loss Statement for the year ended 31st March, 2014

 

Particulars  Note
No
   2013-2014
(USD)
   2012-2013
(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        -    - 
                
Significant accounting policies   1 & 2           
Notes on financial statements   3 to9           

 

  For and on behalf of the board
For Patkar & Pendse Value Communications Corporation
Chartered Accountants  
Registration no. 107824W  

 

/s/ B.M. Pendse /s/ Ajit Balakrishnan
Partner Director
M. No. 32625  
   
Mumbai, India Mumbai, India
Date: September 4, 2014 Date: September 4, 2014

 

123
 

 

Value Communications Corporation

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

124
 

 

Value Communications Corporation

 

Notes to Financial Statements for the year ended 31.03.2014

 

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.

 

 

125
 

 

Value Communications Corporation

 

Notes to Financial statements for the year ended 31.03.2014

 

(Amt. in USD)

NOTE 3: SHARE CAPITAL

 

   As at 31 March 2014   As at 31 March 2013 
Particulars  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    - 
    12,000,000    -    12,000,000    - 

 

3.1 Reconciliation of shares outstanding at the beginning and at the end of the reporting period:

 

   As at 31 March 2014   As at 31 March 2013 
   Equity Shares   Equity Shares 
Particulars  Number   Value   Number   Value 
Shares outstanding at the beginning of the year   12,000,000    -    12,000,000    - 
Shares issued during the year   -    -    -    - 
Shares outstanding at the end of the year   12,000,000    -    12,000,000    - 

 

3.2 Shares held by Holding/Ultimate Holding Company and/or its subsidiaries/associates:

 

   As at 31 March 2014   As at 31 March 2013 
Particulars  Number   Value   Number   Value 
Rediff.com India Ltd. (Holding Company)   12,000,000    -    12,000,000    - 
    12,000,000    -    12,000,000    - 

 

3.3 Details of shares held by each shareholder holding more than 5% shares:

 

   As at 31 March 2014   As at 31 March 2013 
Name of Shareholder  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%
    12,000,000    100%   12,000,000    100%

 

NOTE 4: RESERVES AND SURPLUS

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
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)
    (2,483,273)   (2,483,273)

  

126
 

 

Value Communications Corporation

 

Notes to Financial statements for the year ended 31.03.2014

 

(Amt. in USD)

NOTE 5: OTHER NON CURRENT LIABILITES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Loans and advances from related parties        
(Unsecured)        
Rediff Holdings Inc   2,677,079    2,677,079 
    2,677,079    2,677,079 

 

NOTE 6: TRADE PAYABLES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Micro, Small and Medium Enterprises  -   - 
Others   14,369    14,369 
    14,369    14,369 

 

NOTE 7: LONG TERM LOANS AND ADVANCES

 

   Current Year   Previous Year 
Particulars  As at 31.03.2014   As at 31.03.2013 
Loans and advances to related parties          
(Unsecured, Considered good)          
Rediff.com India Ltd   139,846    139,846 
India Abroad Inc.   68,329    68,329 
    208,175    208,175 

 

NOTE 8: DEFERRED INCOME TAX

 

As of March 31, 2014, 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

 

Prior year figures have been regrouped / reclassified to confirm with the current year.

 

127



 

Exhibit 99.1

 

NOTICE

 

Notice is hereby given that the Nineteenth Annual General Meeting of the Members of Rediff.com India Limited will be held on Monday, September 29, 2014, 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 financial Statements Balance Sheet as at March 31, 2014 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. Ashok Narasimhan, Director retiring by rotation and being eligible, offers himself for reappointment.

 

3.To appoint a Director in place of Mr. Rashesh Shah, 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.”

 

    By Order of the Board
    For Rediff.com India Limited
     
Place: Mumbai   /s/ Jyoti Ravi Sachdeva
Date: 4th September, 2014   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.

A PERSON CAN ACT AS A PROXY ON BEHALF OF MEMBERS NOT EXCEEDING FIFTY AND HOLDING IN THE AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS. A MEMBER HOLDING MORE THAN TEN PERCENT OF THE TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS MAY APPOINT A SINGLE PERSON AS PROXY AND SUCH PERSON SHALL NOT ACT AS A PROXY FOR ANY OTHER PERSON OR MEMBER.

 

 
 

 

 

Form No. MGT – 11

PROXY FORM

[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies

(Management and Administration) rules, 2014]

 

CIN: U22100MH1996PLC096077

Name of Company: Rediff.com India Limited

Registered office: 1st Floor Mahalaxmi Engineering Estate, L. J. First Cross Road, Mahim (W),

Mumbai 400016

 
Name of the member(s):
Registered address:
E-mail Id:
Folio No/ / Client ID
DP ID:

 

I/We, being the member(s) of ……………..…………..shares of the above named company, hereby appoint

 

  1. Name : …………………………………………………………
    Address:
    Email Id:
    Signature :……………………………………. Or failing him

 

  2. Name : …………………………………………………………
    Address:
    Email Id:
    Signature :……………………………………. Or failing him

 

  3. Name : …………………………………………………………
    Address:
    Email Id:
    Signature :……………………………………. Or failing him

 

as my/our proxy to attend and vote (on a poll) for me/us and my/our behalf at the 19th Annual General Meeting of the company, to be held on the Monday of 29th September, 2014 At 10 AM IST. at First Floor, Mahalaxmi Engineering Estate, L. J. First Cross Road, Mahim (West), Mumbai 400016 and at any adjournment thereof in respect of such resolutions as are indicated below:

 

I wish my proxy to attend in the following manner

Resolution
no.
Description   For   Against
1. To receive, consider and adopt the Audited financial Statements Balance Sheet as at March 31, 2014 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. Ashok Narasimhan, Director retiring by rotation and being eligible, offers himself for reappointment    
3. To appoint a Director in place of Mr. Rashesh Shah, 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)    

 

Signed this …………..day of …………..20…….   Affix
Signature of Shareholder   Revenue
    Stamp

 

Signature of First Proxy holder Signature of Second Proxy holder Signature of third proxy holder

  

 

 
 

 

 

Note: 1. This Form of Proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

2.  A Proxy need not be a member of the Company.

3.  A Person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

4.  This is only optional, please put a 'X' in the appropriate column against the resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.

5.  Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes.

6.  In the case of jointholders, the signature of any one holder will be sufficient, but names of all the jointholders should be stated.

 

 

 

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