1. NATURE OF OPERATIONS:
The Company is in the business of offering concrete solutions in
Communication and Collaboration, financial products and services,
providing content delivery platforms for mobile services and in
electronic computing. The Company continuously upgrades existing
products and develops new products to keep ahead of the curve.
PRESENTATION OF FINANCIAL STATEMENTS
A revised schedule VI format is introduced and made mandatory for
preparation of financial statements beginning from April 2011. The
revised schedule VI has classified the Assets and liabilities into
Current and Noncurrent based on the Company''s normal operating cycle
and other criteria set out in the Schedule VI to the Companies Act,
1956. The Company has ascertained its operating cycle as 12 months for
the purpose of current and noncurrent classification of assets and
liabilities, based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and
The Board of Directors have considered and passed resolution by
circulation on 30th March, 2012 under section 210 (4) of the Companies
Act 1956 extending the current financial year by 3 months from March
31st to June 30th. Therefore the Balance Sheet and Profit & Loss
Account of the Company have been prepared for a period of fifteen
months from April 01, 2011 to June 30, 2012.
A Rights, preferences and restrictions attached to Equity Shares:
The Company has only one class of equity shares having par value of Rs.
2 per share. Each holder of equity shares is entitled to one vote per
share. The dividend if any proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
2. Segment Reporting:
The primary reporting of the Company has been disclosed on the basis of
business segment. The Company has only one business segment which is
software product sale and related consultancy services. Accordingly,
the amounts appearing in these financial statements relate to this
primary segment. Further the Company sells and provides services mainly
outside India and also within India. Thus disclosures under secondary
segment reporting are as follows:
3. Miscellaneous Expenditure written off:
During the period ended 30th June 2012, the policy for writing
off of miscellaneous expenditure over a period of ten years have been
changed to bring it in line with The Accounting Standard 26 (AS-26) on
Accounting for Intangible Assets. The AS-26 requires miscellaneous
expenditure to be written off during the same period of incurrence, if
no intangible asset or any other asset is acquired or created. As a
result of this change in Accounting Policy miscellaneous expenditure of
Rs. 7.88 lakhs is charged to profit and loss account resulting in
reduction of profits to this extent.
4. Contingent Liability (not provided for) exist in respect of:
Rs. in lakhs
Sr.No. Particulars For the period For the year
ended 30th ended 31st
June 2012 March 2011
a) Outstanding bank
guarantees 96.06 32.62
b) Letter of Credit given by
Bank on 1,731.74 759.49
behalf of the Company
c) Times Internet disputed
payment 223.15 -
d) Income tax Demand in respect
of an earlier year(s)
1. Appeal pending with CIT
Appeals VIII - 6.93
for AY 2005-06
Total 2,050.95 799.04
5. Share Capital:
Employees have not exercised stock options during the period ended 30th
6. Foreign Currency Convertible Bonds (FCCB):
In January 2008, the Company raised Rs. 49,962.50 lakhs equivalent to
US$ 125 million on the issue of Zero Coupon Convertible Bonds, due on
18th January, 2013 to overseas investors vide RBI approval no.
FED.CO.EBCD/3013/03.02.766/2077-08 dated 5th December, 2007. As per the
approval the funds can be utilised only for overseas acquisitions and
investments in joint ventures / wholly owned subsidiaries and for any
other use as may be permitted under applicable laws or regulations from
time to time.
The Bonds constitute the Company''s direct, unconditional,
unsubordinated and unsecured obligations and will at all times rank
parri passu and without any priority amongst themselves. The Company''s
payment obligations under the Bonds shall, save for such exceptions as
may be provided by mandatory provisions of applicable law, at all times
rank at least equally with all of its other present and future direct,
unconditional, unsubordinated and unsecured obligations.
The conversion price of the Bonds, subject to certain conditions, will
initially be Rs. 302.27 per share with a fixed rate of exchange on
conversion of Rs. 39.13 = US$ 1.00.
The Bonds are listed on the official list of the Singapore Exchange
Securities Trading Ltd (SGX-ST) (the Singapore Stock Exchange).
During the year ending March 2010, the Company has repurchased FCCB of
the face value of US$ 8.50 Million, listed on the Singapore Stock
Exchange, in accordance with the A.P. (DIR Series) Circular No. 39
dated 8th December, 2008 (the Circular) issued by the Reserve Bank of
India. As on 30th June, 2012 Bonds with the nominal value of US$ 113.50
million are outstanding. The Company may repurchase more of these bonds
depending upon the market conditions.
The Bonds carry an yield of 6.60% per annum based on the same, interest
of Rs. 4761.40 lakhs (P.Y. Rs. 3,389.27 lakhs) has been provided in
the accounts (refer Note 29 forming part of the financial statements ).
7. Related Party Disclosures:
a. List of Related Parties
Related Parties with whom transactions have taken place during the
- Key Managerial Personnel (KMP):
- Mr. Pankaj Kumar
- Mr. Kiran Kulkarni
- Mr. Prashant Mulekar
- Enterprise over which Key Management Personnel exercise significant
8. Subsidiary Companies / Acquisition of Companies:
During the period the Company invested Rs. 348.82 lakhs (P.Y. Rs.
35,332.47 lakhs) towards 7,80,000 (P.Y. 77,999,900) shares of US$ 1
each in Geodesic Holdings Limited, Mauritius.
Geodesic Hongkong Ltd. (a 100% step down subsidiary) has paid the loan
amount entirely during the period ended as on 30th June 2012. A sum of
Rs. Nil (P.Y. Rs. 14.92 lakhs) has been accrued towards interest
receivable from Geodesic (Hong Kong) Ltd., for the period ended as on
30th June 2012.
The Share Application as at the end of the period 30th June 2012 for
Geodesic Technology Solutions Limited, Hong kong (GTSL) is Rs. 2,450.55
lakhs. During the period the Company has granted a loan of Rs. 413.69
lacs to GTSL, Hongkong. The closing balance of loan Rs. 7,388.21 lakhs
(P.Y. Rs. 5,492.41 lakhs) net of foreign exchange rate fluctuation, is
shown under Long Term Loans and Advances in Note 15 forming part of
the financial statements.
During the period, the Company has applied for an additional 12,50,000
(P.Y. 22,70,000) equity shares of Rs. 10 each in Chandamama India
Limited on a preferential basis for an amount of Rs. 125 lakhs (P.Y.
Rs.227 lakhs). This money is lying in Share Application pending
allotment which is shown under Non-Current Investments in Note 14
forming part of financial statements.
During the period the Company advanced Rs. 88.18 lakhs to Chandamama
India Limited which is shown under Long Term Loans and Advances i n
Note 15 forming part of financial statements.
During the period Company has advanced Rs. 83.37 lakhs (P.Y. 55.15
lakhs) to Filmorbit.Com India Private Limited which is shown under
Long Term Loans and Advances in Note 15 forming part of financial
During the period the Company invested additional funds at par in the
following Indian subsidiaries and associates:
a) ITM Digital Private Limited (IDPL) was incorporated as a subsidiary
in FY 2009-10, but thereafter Zee Entertainment Limited invested 60% in
the Company, after which it ceased to be a subsidiary of the Company.
The investment of Rs. 40 lakhs made in the company has been purchased
by Zee Entertainment t L i mi ted in the month of May 2011. The
investment as at end of period is Rs. 99,990 (P.Y. Rs. 99,990).
b) Geodesic Gridpoint Energy Private Limited (GGEPL) with an investment
of Rs. Nil (P.Y.Rs. 24,59,990). During the period the Company advanced
Rs. 143.58 lakhs (P.Y. Rs. 1.23 lakhs) to Geodesic Gridpoint Energy
Private Limited which is shown under Long Term Loans and Advances in
Note 15 forming part of financial statements.
c) The Company has invested Rs. Nil (P.Y. Rs. 31,50,000) in
Filmorbit.Com India Private Limited (FIPL).
The Company is having pending share application allotment to the tune
of Rs. 15.68 lakhs as at the period ended on 30th June 2012. As per the
provisions of section 72(2)(2A) of Companies Act 1956, the Company is
required to maintain a separate bank account for the same and also
needs to provide interest on the same.
9. Disclosure for operating leases:
a) Non-cancellable lease:
The Company''s significant leasing agreements are in respect of
operating leases for official premises and guest house. These leasing
arrangements are non-cancellable for a period of three years and are
usually renewable by mutual consent on mutually agreeable terms.
The aggregate lease rentals are charged as Rent under Other Expenses
Note 31 which forms part of the financial statement.
10. The Company has investments in its wholly owned subsidiary,
Chandamama India Limited to the tune of Rs. 1,954.59 lakhs. The net
worth of this subsidiary is negative / less than 25% of investment in
that subsidiary as on 31st march, 2011. The Company has not made any
provision against diminution in value of investment in shares of the
aforesaid subsidiary. The management is confident of fetching the value
of investment based on the assets owned by the Company – both physical
and non-physical. The Company is in the process of producing two
animation film series, enhancing its subscription base and selling
content on new media which will ultimately generate profits in the
11. Based on the information available with the Company, none of the
vendors fall under the definition of micro, small and medium scale
enterprises. This information is not verifiable by the auditors.
12. Figures of the previous year have been regrouped/ rearranged
wherever necessary to correspond with the figures of the current period
on account of revised schedule VI format. Amounts and other disclosures
for the preceding year are included as an integral part of the current
period financial statements and are to be read in relation to the
amounts and other disclosures relating to the current period.