Mar 31, 2016
1. Provisions and contingencies
a. Claims against the Company not acknowledged as debts:
i. The Company has received demands ascertaining to Rs. 3087.80 lakhs (previous year - Rs. 974.17 lakhs) towards Income Tax for the assessment years 2005-06, 2006-07, 2008-09, 2009-10 and 2010-11. The Company has disputed the demands and has preferred appeals before appellate authorities and also deposited Rs 671.25 lakhs upto 31 March 2016
ii. Sales tax/Works Contract tax matters disputed by the Company relating to issue of applicability, allow ability, etc. aggregating to Rs.4,585 lakhs (previous year Rs. 3,196.92 lakhs) for the F.Y 2000-01 2001-02, 2002-03, 2003-04, 2004-05, 2006-07,2007-08, 2008-09, 2009-10 and F.Y 2010-11.
In respect of the demands/claims described in paragraphs (i) and (ii) above, the Company has also assessed that the possibility of these cases being decided against the Company and the demand crystallizing on the Company is not likely and hence no provision is required.
2. The Company has contributed Rs. 0.11 (previous year Rs. 0.11 Lakhs) towards Contribution to provident fund.
3. During the previous years, the Company has closed the printing press business and discontinued the printing operations. As at
31 March 2016, the carrying amount of such assets and liabilities of discontinuing operations which were not disposed off for previous year was Rs. 860.93 Lakhs (previous year Rs 851.44 lakhs) and Rs. 639.59 lakhs (previous year Rs. 697.37 Lakhs) respectively. The following statement shows the revenue and expenses of continuing and discontinuing operations:
4. The accumulated losses of the Company have resulted in the erosion of its net worth. The Company has been legally advised that in view of closure of its printing operations, the provisions of Sick Industrial Companies (Special provisions) Act, 1985 are not applicable to it.
5. The Company had discontinued its operations in the previous years and has incurred net loss of Rs. 370.76 lakhs during the year ended 31 March 2016 and as of that date the Companyâs accumulated losses amount to Rs.7,899.66 lakhs which has resulted in erosion of hundred percent of net worth of the Company. The management is evaluating various options, including starting a new line of business. There is a material uncertainty related to the aforementioned conditions that may cast significant doubt on the Company continuing as a going concern and accordingly, the Company may be unable to realise its assets and discharge its liabilities in the normal course of business. Network18 Media & Investments Limited, the Holding Company, has given a support letter to extend, for the foreseeable future (i.e. twelve months from 31 March 2016), any financial support, which may be required by the Company. Considering these factors, the management has assessed that the Company continues to be a going concern and hence, these financial statements have been prepared on a going concern basis.
6. As the Company operates in a single business and geographical segment, the reporting requirements for primary and secondary segment disclosures prescribed by Accounting Standard 17 âSegment Reportingâ, have not been provided in these financial statements.
Net deferred tax (liability) / asset - -
The Company had recognized deferred tax asset to the extent of the deferred tax liability only, in view of estimated tax losses and absence of virtual certainty supported by convincing evidence that sufficient future taxable income will not be available against which such deferred tax assets can be realized.
7. Previous yearâs figures have been regrouped wherever necessary to conform with figures of the current year.
Mar 31, 2014
1. Share capital
a. There is no movement in the share capital during the current and
previous year
b. Description of the rights, preferences and restrictions attached to
each class of shares.
Equity shares : The Company has only one class of equity shares having
a par value of Rs. 10 per share. Each holder of equity shares is
entitled to one vote per share. The Company declares and pays dividends
in Indian rupees. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
General Meeting. 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 shareholders.
b. Shares reserved for issue under options and other commitments
As on 31 March 2014, 45,150 (31 March 2013 : 452,400) Employee Stock
Options were outstanding under the Employee Stock Option Plan of the
Company. Each option would entitle the holder thereof to subscribe to
one Equity Share of Rs. 10 each in the Company. For details of shares
reserved for issue under the employee stock option (ESOP) plan of the
Company please refer note 30.
2. Trade payables
*The management has identified enterprises which have provided goods
and services to the Company and which qualify under the definition of
micro and small enterprises, as defined under Micro, Small and Medium
Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure
in respect of the amounts payable to such enterprises as at 31 March
2014 has been made in the financials statements based on information
received and available with the Company. Futher in the view of the
management, the impact of interest, if any, that may be payable in
accordance with the provisions of the MSMEDA is not expected to be
material.
3. Provisions and contingencies
a. Claims against the Company not acknowledged as debts
i. The Company has received demands of Rs. 97,416,646 (31 March 2013 -
Rs. 97,416,646) towards Income Tax for the Assessment Years 2005-06,
2006-2007, 2008-2009 and 2010-2011. The Company has disputed the
demands and has preferred appeals before appellate authorities. The
Company has also been legally advised that the possibility of matters
being decided against the Company and the demands crystallizing is not
likely.
ii. Sales tax/Works Contract tax matters disputed by the Company
relating to issue of applicability, allowability, etc. aggregating to
Rs. 299,987,328 (31 March 2013 : Rs. 35,368,422) for the F.Y 2000-2001,
2001-2002, 2002- 2003, 2003-2004, 2004-2005, 2006-07, 2008-09 and F.Y
2009-10.
In respect of the demands/claims described in paragraphs (i) and (ii)
above, the Company has also assessed that the possibility of these
cases being decided against the Company and the demand crystallizing on
the Company is not likely and hence no provision is required.
4. The Company has reached a compensation settlement with the permanent
employees of the Company through a Voluntary Retirement Scheme
resulting in expenditure amounting to Rs. 81,916,592 (31 March 2013 :
Rs 100,836,817). The compensation was paid during the financial year
and was charged to the statement of profit and loss for the year ended
31 March 2014 and presented as exceptional item in note 27.
5. Employees Stock Purchase Pian 2010 (ESRR 2010):
During the year 2010-2011, the Company had also introduced an Employee
Stock Purchase Plan, 2010 (ESPP 2010) which was approved by
shareholders vide postal ballot resolution, results whereof were
declared on 7 May 2010. However, there has been no activity under this
scheme till balance sheet date.
The Company has adopted the intrinsic value method as stipulated under
the SEBI Guidelines and the Guidance Note on Accounting for Employee
Share Based Payment issued by the Institute of Chartered Accountants of
India for measuring the cost of the options granted.
6. Related parties disclosures
a. List of related parties
i. Parties where control exists (Holding company)
* Network18 Media & Investments Limited
ii. Fellow subsidiaries (with whom transactions have been undertaken
during the year).
* TV18 Broadcast Limited
* Digital 18 Media Limited
iii. Key Management Personnel
* Raghav Bahl
* Sanjeev Singh
7. The Company has contributed Rs. 99,170 (previous year Rs. 3,246,866)
towards Contribution to provident fund.
8. During the previous year the Company has closed the printing press
business and discontinued the printing operations. As at 31 March 2014,
the carrying amount of such assets and liabilities of discontinuing
operations which were not disposed off was Rs.100,107,227 (previous
year Rs.169,553,855) and Rs. 76,716,301 (previous year Rs.137,733,109)
respectively. The following statement shows the revenue and expenses
of continuing and discontinuing operations:
9. The Board of Directors of the Company, on 7 July 2010, announced and
approved Scheme of Arrangement between the Company and Network18 Media
& Investments Limited (ÂNetwork18) and their respective shareholders
and creditors. As per the Scheme, the Business Directories business,
the New Media business and the Publishing business of the Company
(ÂDemerged undertaking'') have demerged into Network18 while the
Printing Press business continued to remain with the Company. The
Scheme was approved by the Hon''ble High Court of Delhi on 22 May 2012
and made effective on 1 June 2012 with an appointed date of 1 April
2010. Pursuant to the scheme, all properties and assets, rights and
licenses, registrations (including Registrar of Newspapers of India) of
the demerged undertaking stand transferred to Network18. Pending
approval from Registrar of Newspapers of India for transfer of titles
in the name of Network18, all the purchases of paper are being done by
the Company on behalf of Network18.
10. The accumulated losses of the Company have resulted in the erosion
of its net worth. The Company has been legally advised that in view of
closure of its printing operations, the provisions of Sick Industrial
Companies (Special provisions) Act, 1985 are not applicable to it.
11. The Company had discontinued its operations during the previous
year and has incurred net loss of Rs. 99,215,339 during the year ended
31 March 2014 and as of that date the Company''s accumulated losses
amount to Rs. 718,150,553 resulting in erosion of hundred percent of
net worth of the Company. The management is evaluating various options,
including starting a new line of business and has appointed external
consultants to assist with the same. There is a material uncertainty
related to the aforementioned conditions that may cast significant
doubt on the Company continuing as a going concern and accordingly the
Company may be unable to realize its assets and discharge its
liabilities in the normal course of business. Network18 Media &
Investments Limited has given a support letter to extend for the
foreseeable future (i.e. twelve months from 31 March 2014), any
financial and business support, which may be required by the Company.
Considering these factors, the management has assessed that the Company
continues to be a going concern and hence, these financial statements
have been prepared on a going concern basis.
12. Previous year''s figures have been regrouped wherever necessary to
conform with figures of the current year.
Mar 31, 2013
1. Background:
Infomedia Press Limited (''the Company'') was incorporated on 30 May
1955.The Company is engaged in the business of printing operations.
2. The Hon''ble High Court of Delhi approved the Scheme of Arrangement
(''the Scheme'') between Infomedia Press Limited (''the Demerged
Company''or ''Infomedia'') and Network 18 Media & Investments Limited
(''Network 18'' or ''the Resulting Company'') and their respective
shareholders and creditors vide its orders dated 22 May 2012 (read with
orders dated 3 May 2012,10 February 2012 and 22 November 2011). The
appointed date as per the scheme was 1 April 2010 and the scheme was
made effective on 1 June 2012 (the ''Effective Date'') on filing the
copies of the order of the Hon''ble High Court with the Registrar of
Companies. Accordingly the effect of the Scheme was given in the
financial statements of the Company for the year ended 31 March 2012.
Pursuant to the Scheme, the ''Demerged Undertaking'' (as defined in the
Scheme) inter alia comprising of the Business Directories business, the
New Media business and the Publishing business of the Company demerged
into Network18 with effect from appointed date of 1 April 2010. The
printing press business (the''Remaining Businesses defined in the
Scheme) continued to remain with the Company. Further the book value of
the assets and liabilities of the Demerged Undertaking as at 1 April
2010 standing in the books of account of Infomedia have been
transferred to Network18 and the aggregate of the net assets of the
Demerged Undertaking as at 1 April 2010 transferred to Networkl 8
amounting to Rs 289,523,052 as increased by the debit balance of
Statement of profit and loss of Infomedia Press Limited as at 1 April
2010 have been adjusted against the following balances as at 1 April
2010.
i. Capital reserve Rs 142,200,000; and
ii. Securities premium account Rs 679,458,130
Pursuant to the provisions of the Scheme and Section 100 and all other
applicable provisions of the Act, reduction in the balance in
Securities premium account and Capital reserve as mentioned above has
been effected as an integral part of this Scheme only, as the same does
not involve either diminution of liability in respect of unpaid capital
or payment to any shareholder of any amount paid in respect of shares
issued and the order of the Court is deemed to be an order under
Section 102 of the Act, confirming the reduction. Notwithstanding the
reduction in capital of the Company as aforesaid, it shall not be
required to add "and reduced" as suffix to its name.
The Scheme provides that as and from the appointed date, upto and
including the effective date:
(i) Demerged Company (to the extent of the Demerged Undertaking), shall
carry on and be deemed to have carried on its business and activities
and shall stand possessed of all the assets and properties, in trust
for Resulting Company and shall account for the same to Resulting
Company.
(ii) Income or profit accruing or arising to the Demerged Undertaking
and all costs, charges, expenses and losses or taxes incurred by the
Demerged Undertaking shall for all purposes be treated as the income,
profits, costs, charges, expenses and losses or taxes, as the case may
be, of Resulting Company and shall be available to the Resulting
Company for being disposed off in any manner as it thinks fit.
Accordingly the loss of the Demerged Undertaking for the period 1 April
2010 to 31 March 2011 amounting to Rs 320,979,704 has also been
transferred to the Resulting Company.
Pursuant to the Scheme, the name of Company has been changed to
Infomedia Press Limited with effect from 5 July, 2012.
The Company has incurred a loss of Rs. 242,261,261 during the year
ended 31 March 2013 and has discontinued its printing operations. The
management is evaluating various options, including sale of certain
assess of the Printing Press business and starting a new line of
business in the Company. There is a material uncertainty related to the
aforementioned conditions that may cast significant doubt on the
Company continuing as a going concern and accordingly the Company may
be unable to realize its assets and discharge its liabilities in the.
normal course of business. Networkl 8 has given a support letter to,
extend for the foreseeable future (i.e. twelve months from the balance
sheet date), any financial and business support, which may be required
by the Company. Considering these '' factors the management has assessed
that the Company continues to be a going concern and hence, these
financial statements have been prepared on a going concern basis.
3. Provisions and contingencies
a. Claims against the Company not acknowledged as debts:
i. The Company has received demands of Rs. 97,416,646 (31 March 2012 -
Rs. 109,870,463) towards Income Tax for the Assessment Year 2005-06,
2006-2007, 2008-09 and 2010-2011. The Company has disputed the demands
and has preferred appeals before appellate authorities, to set aside
the demands and carry out necessary rectifications. The Company has
also been legally advised that the possibility of matters being decided
against the Company and the demands crystallizing is not likely.
ii. Sales tax/Works Contract tax matters disputed by the Company
relating to issue of applicability, allowability, etc. aggregating to
Rs. 35,568,422 (31 March 2012 : Rs. 36,717,487) for the F.Y 2001-2002,
2002-2003, 2003- 2004 and 2004-2005.
In respect of the demands/claims described in paragraphs (i) and (ii)
above, the Company has also assessed that the possibility of these
cases being decided against the Company and the demand crystallizing on
the Company is not probable and hence no provision is required.
iii. Bank guarantee given to Bombay Stock Exchange (''BSE'') towards
issue of Equity shares on rights basis amounting to Rs. Nil (31 March
2012 - Rs. 5,000,000).
4. During the year ended 31 March 2013, the Company reached a
compensation settlement with majority of the permanent employees of the
Company through a Voluntary Retirement Scheme resulting in expenditure
amounting to Rs. 100,836,817. The compensation was paid during the
financial year and was charged to profit and loss for the year ended 31
March 2013 and presented as exceptional item.
5. Employee Stock Option Plans
The Company''s Employee Stock Option Plans (ESOPs) framed in accordance
with the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI
Guidelines") which have been approved by the Board of Directors and the
Shareholders are listed below. Employee Stock Option Plan 2004 (ESOP
2004):
6. Related parties disclosures: a. List of related parties
i. Parties where control exists:
- Network18 Media & Investments Limited (w.e.f. 11 June 2011)
- Television Eighteen India Limited by virtue of control of the Board
of Directors (upto 10 June 2011) ii. Fellow subsidiaries (with whom
transactions have been undertaken during the year)
- TV18 Broadcast Limited
- Digital 18 Media Limited iii. Key Management Personnel
- Mr. Haresh Chawla - Managing Director of the Company upto 15 February
2012 iv. Joint Venture
7. Employee benefits
Defined Contribution Plan
The Company has contributed Rs. 3,246,866 (previous year Rs. 2,908,455)
to Provident Fund
Defined Benefit Plan
Gratuity
The Company has given voluntary retirement to certain employees and is
in the process of giving voluntary retirement to the remaining
employees. Considering the same, the gratuity liability has been has
been assessed on actual basis and the same has been classified as short
term in nature.
Statement of profit and loss Net employee benefit expense
The present value of defined benefit obligations and the related
current service cost are measured using the projected unit credit
method with actuarial valuation being carried at each balance sheet
date. The details are set out as under:
8. During the year the Company has closed the printing press business
and discontinued the printing operations. As at 31 March 2013, the
carrying amount of such assets and liabilities of discontinuing
operations which were not disposed off was Rs 161,786,077 (previous
year Rs 234,830,829) and Rs 129,965,331 (previous year Rs 96,538,436)
respectively. The following statement shows the revenue and expenses of
continuing and discontinuing operations:
9. Since the accumulated losses of the Company have resulted in the
erosion of its net worth, the Company is evaluating the applicability
of the provisions of Sick Industrial Companies Act (SICA) and will take
necessary steps to comply with the same, as applicable.
10. As the Company operates in a single business and geographical
segment, the reporting requirements for primary and secondary segment
disclosures prescribed by Accounting Standard 17 "Segment Reporting",
have not been provided in these financial statements.
11. Previous year''s figures have been regrouped wherever necessary to
conform with figures of the current year.
Mar 31, 2012
Notes:
1. Direct taxes (paid)/refunded are treated as arising from operating
activities and are not allocated to investing and financing activities.
Nature of Operations:
Info media Press Limited ('the Company') is in the business of Printing
services (31 March 2011: publishing Business Directories and Special
Interest Magazines in India, Printing services and Agency services).
a Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting. 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 shareholders.
a Reconciliation of the shares outstanding at the beginning and at the
end of the year
d Aggregate number of bonus shares issued for consideration other than
cash and shares bought back during their period of five years
immediately preceding the reporting date:
In addition, the Company has issued total 628,750 shares (31 March
2011:304,800) during the period of five years immediately preceding the
reporting date on exercise of options granted under the employee stock
option plan (ESOP) wherein part consideration was received in form of
employee services.
As per records of the Company, including its register of
shareholders/members and other declarations received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownerships of shares.
f Shares reserved for issue under options
For details of shares reserved for issue under the employee stock
option (ESOP) plan of the Company, please refer note 33.
Security for Secured Loan
Rs. Nil (Refer Note : 28)(31 March 2011 :Term loan from Punjab National
Bank was taken during the financial year 2009-2010 and carries interest
@14.50% to 16.50% pa. The loan is repayable in 27 quarterly
installments. The loan is secured by first hypothecation
charge/mortgage on all movable assets of the Company which are acquired
out of Term Loan and second charge on all existing fixed assets of the
Company including all immovable properties of the Company. Further the
loan has been guaranteed by the corporate guarantee of Network18 Media
& Investments Limited, the holding company).
Security for Secured Loan
Rs.Nil (Refer Note : 28) (31 March 2011 :Cash Credit from Axis Bank
Limited is secured by pari passu second charge on all fixed assets of
the Company and pari passu first charge on all current assets of the
Company. Further the cash credit has been guaranteed by the corporate
guarantee of Network18 Media & Investments Limited, the holding
company. The cash credit is repayable on demand and carries interest @
12.75%-16% pa)
Land includes land held on leasehold basis:
Gross block Rs. 1,873,125(31st March 2011: Rs. 1,873,125) Depreciation
charge for the year Rs. 31,219 (31 March 2011: Rs. 31,219) Accumulated
depreciation Rs. 842,910 (31 March 2011: Rs. 811,691) Net book value
Rs. 1,030,215 (31 March 2011: Rs. 1,101,434) Building includes those
constructed on leasehold land: Gross block Rs. 33,885,516 (31 March
2011: Rs. 33,885,516)
Depreciation charge for the year Rs. 1,253,822 (31 March 2011: Rs.
1,253,822) Accumulated depreciation Rs. 26,848,554 (31 March 2011: Rs.
25,594,732) Net book value Rs. 7,036,962 (31 March 2011: Rs. 8,290,784)
Notes to Accounts
1. The Hon'ble High Court of Delhi approved the Scheme of Arrangement
('the Scheme') between Info media Press Limited ('the Demerged Company'
or' Info media') and Network 18 Media & Investments Limited ('Network
18'or 'the Resulting Company') and their respective shareholders and
creditors vide its orders dated 22nd May 2012 (read with orders dated
May 3, 2012, February 10,2012 and November 22, 2011). The Appointed
Date as per the scheme was April 1,2010 and the Scheme has been made
effective on June 1, 2012 (the 'Effective Date') on filing the copies
of the order of the Hon'ble High Court with the Registrar of Companies.
Accordingly the effect of the Scheme has been given in the financial
statements of the Company for the year ended March 31,2012.
Pursuant to the Scheme, the 'Demerged Undertaking' (as defined in the
Scheme) inter alia comprising of the Business Directories business, the
New Media business and the Publishing business of the Company stands
demerged into Network18 with effect from Appointed Date of April 1,
2010. The Printing Press business (the 'Remaining Business's defined
in the Scheme) continues to remain with the Company. Further the book
value of the assets and liabilities of the Demerged Undertaking as at
April 1, 2010 standing in the books of account of Info media have been
transferred to Network 18 and the aggregate of the net assets of the
Demerged Undertaking as at April 1, 2010 transferred to Network 18
amounting to Rs 289,523,052 as increased by the debit balance of
Statement of profit and loss of Info media Press Limited as at April
1,2010 have been adjusted against the following balances as at April
1,2010.
i. Capital Reserve Account Rs 142,200,000; and
ii. Securities Premium Account Rs 679,458,130
Pursuant to the provisions of the Scheme and Section 100 and all other
applicable provisions of the Act, reduction in the balance in
Securities Premium account and Capital Reserves as mentioned above has
been effected as an integral part of this Scheme only, as the same does
not involve either diminution of liability in respect of unpaid capital
or payment to any shareholder of any amount paid in respect of shares
issued and the order of the Court is deemed to be an order under
Section 102 of the Act, confirming the reduction. Notwithstanding the
reduction in capital of the Company as aforesaid, it shall not be
required to add "and reduced" as suffix to its name.
The Scheme provides that as and from the Appointed Date, upto and
including the Effective Date:
(i) Demerged Company (to the extent of the Demerged Undertaking), shall
carry on and be deemed to have carried on its business and activities
and shall stand possessed of all the assets and properties, in trust
for Resulting Company and shall account for the same to Resulting
Company.
(ii) Income or profit accruing or arising to the Demerged Undertaking
and all costs, charges, expenses and losses or taxes incurred by the
Demerged Undertaking shall for all purposes be treated as the income,
profits, costs, charges, expenses and losses or taxes, as the case may
be, of Resulting Company and shall be available to the Resulting
Company for being disposed off in any manner as it thinks fit.
Accordingly the loss of the Demerged Undertaking for the period April
1,2010 to March 31,2011 amounting to Rs 320,979,704 has also been
transferred to the Resulting Company.
Since the Effective date is June 1,2012, the effect of the Scheme has
been given in the financial statements of the Company for the year
ended March 31, 2012 and hence the figures as at and for the year ended
march 31,2012 are not comparable to the figures as at and for the year
ended March 31,2011.
Pursuant to the Scheme, the name of Company has been changed to
Infomedia Press Limited with effect from July 5, 2012.
The term loan from Punjab National Bank Limited has been transferred to
Network18 in pursuance of the Scheme. With the approval of the Lender,
Network18 is in the process of creating necessary charges and existing
first charge inter alia on immovable properties, plant and machinery
and immovable properties of the Company shall be vacated.
The cash credit limits from Axis Bank Limited has been transferred to
Network18 in pursuance of the Scheme of Arrangement. With the approval
of the Lender, Network18 is in the process of creating necessary
charges and existing pari passu first charge inter alia on all currents
assets of the Company shall be vacated.
Network18 has also given a guarantee Rs. 85.00 crores in the previous
year to the bankers in connection with the above term loan from Punjab
National Bank and the cash credit from Axis Bank limited.
2. As stated in Note 28 above, as per the Scheme, the Business
Directories business, the New Media business and the Publishing
business(together the 'Publishing' and 'Other' Segments) of the Company
have been demerged into Network 18 Media & Investments Limited from
April 1, 2010 (Appointed Date) while the Printing Press business
(Printing Segment) continues fo remain with the Company. Since the
Effective date is June 1, 2012, the effect of the Scheme has been given
in the financial statements of the Company for the year ended March
31,2012. As at and for the year ended March 31, 2011, the Business
Directories business, the New Media business and the Publishing
business were considered as Discontinuing Operations and the Printing
business was considered as Continuing Operations. The following
statement shows the revenue, expenses, assets and liabilities of
Continuing and Discontinuing operations as at and for the year ended
March 31, 2011:
3. The net difference in foreign exchange (i.e. the difference
between the spot rates on the dates of the transactions and the actual
rates at which the transactions are settled/ appropriate rates
applicable at the yearend) debited to statement of profit and loss as
disclosed under note '24' is Rs.175,430 (31 March 2011: Rs. 2,567,471).
4. Provisions and Contingencies -
a. Claims against the Company not acknowledged as debts:
i. The Company has received demands of Rs. 109,870,463 (31 March
2011:Rs. 109,870,463,) towards Income Tax for the Assessment Year
2005-06, 2006-2007, 2007-2008, 2008-2009 and 2009-2010. The Company has
disputed the demands and has preferred / is in the process of
preferring appeals before appellate authorities, to set aside the
demands and carry out necessary rectifications. The Company has also
been legally advised that the possibility of matters being decided
against the Company and the demands crystallizing is not likely.
ii. Sales tax / Works Contract tax matters disputed by the Company
relating to issue of applicability, allow ability, etc. aggregating to
Rs. 36,717,487 (31 March 2011:Rs. 41,556,776)for the F.Y
2000-2001,2001- 2002 and 2002-03.
iii. Third party claim relating to Service Tax pending with Allahabad
High Court aggregating to Rs. Nil (31 March 2011: Rs. 16,993,598)
In respect of the demands/claims described in paragraphs (i), (ii) and
(iii) above, the Company has also assessed that the possibility of
these cases being decided against the Company and the demand
crystallizing on the Company is not probable and hence no provision is
required.
iv. Bank guarantee given to Bombay Stock Exchange ('BSE') towards
issue of Equity shares on rights basis amounting to Rs. 5,000,000(37
March 2011: Rs.5,000,000).
A provision is recognized for expected returns on products sold during
the year based on past experience of level of returns. It is expected
that most of this cost will be utilized in the next financial year.
Assumptions used to calculate the provision for returns are based on
current sales level and current information available about returns.
5. As mentioned in Note 28 above, the Scheme of Arrangement has
become effective on June 1, 2012. Pursuant to the Scheme, the' Demerged
Undertaking'(as defined in the Scheme) inter alia comprising of the
Business Directories business, the New Media business and the
Publishing business of the Company stands demerged into Network18 with
effect from Appointed Date of April 1,2010. The Printing Press business
(the 'Remaining Business' as defined in the Scheme) continues to remain
with the Company. The Company has made profit of Rs. 10,445,298 during
year ended March 31, 2012 and the net worth of the Company as at March
31, 2012 is Rs 146,359,571 after considering accumulated losses of
Rs.376,673,953 after giving effects of the scheme as per Note 28 above.
During the year 2009-10, the Company has raised equity vide rights
issue, amounting to Rs. 998,989,062 to augment the equity in the
Company. The total amount of Rs. 998,989,062 stands fully utilized. The
Parent Company has also given support letter to extend any financial
and business support, which may be required by the Company. The
Company's Printing Press business may also be sold off. In the event
that the assets of the Printing Press business are sold off, the
Company may consider starting a new line of business in the Company.
Management has assessed and confirmed that considering these factors
the Company shall continue to be a going concern and hence, these
financial statements have been prepared on a going concern basis.
6. Employee Stock Option Plans (ESOP) 2004 and 2007
The Company has provided share based payment schemes to its employees.
During the year ended March 31, 2012 the following schemes were in
operation:
This scheme (ESOP 2004) is covered under the approval of the
shareholders vide their Annual General Meeting held on July 28,2004 as
modified at Extra Ordinary General Meeting held on January 20,2005 and
Annual General Meeting held on October 10, 2006 and further modified
through postal ballot resolution , results whereof were declared on
July 15,2010.
This scheme (ESOP 2007) is covered under the approval of the
shareholders vide their Extra-Ordinary General Meeting held on January
10, 2008 and further modified through postal ballot resolution, results
whereof were declared on May 7,2010.
Employee Stock Purchase Plan 2010 (ESPP 2010):
During the year 2010-2011, the Company had also introduced an Employee
Stock Purchase Plan, 2010 (ESPP 2010) which was approved by
shareholders vide postal ballot resolution, results whereof were
declared on May 7, 2010. However, there has been no activity under
this Scheme till balance sheet date.
The expected life of the stock is based on historical data and current
expectations and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that
the historical volatility over a period similar to the life of the
options is indicative of future trends, which may also not necessarily
be the actual outcome.
Since the Company uses the intrinsic value method, the impact on the
reported net profit/(loss) and earnings per share by applying the fair
value based method needs to be disclosed.
In March 2005 the ICAI has issued a Guidance Note on "Accounting for
Employees Share Based Payments "applicable to employee based share plan,
the grant date in respect of which falls on or after April 1,2005. The
said Guidance Note requires Preformed disclosures of the impact of the
fair value method of accounting of employee stock compensation
accounting in the financial statements. Applying the fair value based
method defined in the said Guidance Note, the impact on the reported
net profit/(loss) and earnings per share would be as follows:
Since the intrinsic value being Rs.46,797(3 1 March 201 l:Rs.
9,822,491), accrual has been made towards compensation cost in the
financial statements for the year ended March 31,2012.
7. The Company's significant leasing arrangements are in respect of
operating leases for premises (offices, residential, stores, godowns
etc.). These leasing arrangements, are mutually cancellable generally,
in 25 months(57 March 2011:11 and 60 months). There is no escalation
clause in the lease agreements. There are no restrictions imposed by
lease arrangements. The aggregate lease rentals amounting to Rs.
16,458,611 (31 March 2011: Rs. 156,088,443) are disclosed as Rent under
Note "24"
The identification of micro and small enterprises is based on the
management's knowledge of their status as at March 31,2012. The Company
has requested and received intimation from "suppliers" regarding their
status as at March 31,2012 under the Micro, Small and Medium
Enterprises Development Act, 2006. Hence disclosures, as per such
intimations relating to amounts unpaid as at the yearend together with
interest paid / payable as required under the said Act have been made.
* These shares are anti -dilutive and are ignored in the calculation of
diluted earnings per share computed on the basis of the total loss for
the year ended 31 March, 2011.
** Effect of dilution due to stock options granted under ESOP for the
purpose of calculating weighted average number of equity shares in
calculating diluted EPS for the year ended 31 March 2012 is negative,
hence ignored.
8. Derivative transactions:
The Company has not entered into any derivative transactions (including
Forward Exchange Contracts) during the year. The yearend foreign
currency exposures that have not been hedged by a derivative instrument
or otherwise are given below:
The above disclosures have been made consequent to announcement by the
Institute of Chartered Accountants of India in December 2005, which is
applicable to the financial periods ending on or after March 31,2006.
9. Particulars of goods manufactured, etc:
a. Class of goods manufactured: Printed products of all kinds include
annual reports, greeting cards, calendars, diaries, books, newspapers,
magazines and other periodicals, directories, catalogues, publicity
material, stationery, typesetting, half-tones, color separations,
plates and combinations thereof.
b. The nature of the Company's operations is such that there is no
known physical measure of standard classification for its saleable
products. Consequently, quantitative information regarding production,
turnover and opening and closing stocks of finished goods has not been
given.
c. Sales include 115,308 numbers (31 March 2011; 13,426 numbers)
of' Touchstone' gift articles worth Rs. 7,339,368(3 1 March 2011: Rs.
1,963,916) and 9,241 numbers (31 March 2011: 10,065 numbers) of other
traded goods worth Rs. 1,082,284(31 March 2011: Rs. 893,957).
b Particulars of other parties:
Key Management Personnel
Mr. Haresh Chawla - Managing Director of the Company since August
21,2008 till February 15,2012. c Joint Venture:
Reed Infomedia India Private Limited ('REED') - Joint control since
March 30,2006 (Refer Note 28) d Fellow subsidiaries :
i. ibn18 Broadcast Limited ('bn 18') - Fellow subsidiary since August
21,2008
ii. TV18 Home Shopping Network Limited ('Homeshop 18') - Fellow
subsidiary since August 21,2008
iii. Viacom 18 Media Private Limited ('Viacom 18')- Fellow subsidiary
since August 21, 2008
iv. Network18 Publication Limited - Fellow subsidiary since August
21,2008
v. Digital 18 Media Limited ('Digital 18') - Fellow subsidiary since
August 21,2008
vi. Web18 Software Services Limited ('Web 18') - Fellow subsidiary
since August 21,2008
vii. e-Eighteen.Com Limited (E-18.Com) - Fellow subsidiary since August
21,2008
viii. E18, division of Network18 ('El8')- Fellow subsidiary since
August 21,2008
ix. Sports 18, division of Network 18('Sports18') - Fellow subsidiary
sfnee August 21,2008
x. IBN Lokmat News Private Limited ('IBN Lokmat') - Fellow subsidiary
since August 21,2008
(Refer Note 28 relating to Scheme of arrangement between Info media
Press Limited and Network18 Media & Investments Limited)
B - Gratuity
The Company has a defined benefit gratuity plan. The gratuity is payable
to all employees of the Company at the rate of half month basic salary
for every completed year of service of more than 10 years but less than
15 years; three fourth month basic salary for every completed year of
service of more than 15 years but less than 20 years; and for completed
years of services of more than 20 years, 20 months basic salary plus
half month basic salary for every completed year of service in excess
of 20 years. All payments are subject to minimum as paid under the
Payment of Gratuity Act. The annual contributions made to the Trust are
invested as per the rules of the Trust. The shortfall between the
accumulated fund balance and the liability as determined on the basis
of an independent actuarial valuation is provided for as at the year
end.
C - Leave Encashment
In accordance with leave policy, the Company has provided for leave
entitlement on the basis of actuarial valuation carried out at the end
of the year. The short term compensated absences are provided for on
the basis of actuarial valuation as at the year end.
The following tables summaries the components of net benefit expense
recognized in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet for the respective plan.
Statement of profit and loss
Net employee benefit expense (recognized in Employee Cost)
The present value of defined benefit obligations and the related
current service cost are measured using the projected unit credit
method with actuarial valuation being carried at each balance sheet
date. The details are set out as under:
The overall expected rate of return on assets is determined based on
the market prices prevailing on that date, applicable to the period
over which the obligation is to be settled. .
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
with Reed Elsevier Overseas B. V and the Company has been terminated
and accordingly the Reed is not carrying any business. It has also been
agreed to wind up the Reed.
10. The registered office of the Company has been shifted to 503, 504
& 507, 5th Floor, Mercantile House, 15, Kasturba Gandhi Marg, New Delhi
- 110001, pursuant to confirmation by Company Law Board, Mumbai bench
with effect from October 19, 2010.
11. Barter transactions are recognized at the fair value of
consideration receivable or payable. When the fair value of the
transactions cannot be measured reliably, the revenue/expense is
measured at the fair value of the goods/ services provided/received
adjusted by the amount of cash or cash equivalent transferred. During
the year ended March 31, 2011, the Company had entered into barter
transactions, which were recorded at the fair value of consideration
receivable or payable. The statement of profit and loss for the year
ended March 31, 2011 has been grossed up to reflect revenue from barter
transactions of Rs Nil (31 March 2011 :Rs. 33,184,369) and expenditure
of Rs Nil (31 March 2011:Rs. 33,184,369) being the fair value of barter
transactions provided and received.
12. Previous year's figures have been regrouped wherever necessary to
conform with figures of the current year. Since the Effective date is
June 1, 2012, the effect of the Scheme has been given in the financial
statements of the Company for the year ended March 31,2012 and hence
the figures as at and for the year ended march 31,2012 are not
comparable to the figures as at and for the year ended March 31, 2011.
Mar 31, 2011
1. Nature of Operations:
Infomedia 18 Limited ('the Company') is in the business of publishing
Business Directories and Special Interest Magazines in India, Printing
services and Agency services.
2. The Board of Directors of the Company, on July 7,2010 announced and
approved a Scheme of Arrangement ('the Scheme') between Infomedia 18
Limited and Network 18 Media & Investments Limited ('Network 18") and
their respective shareholders and creditors. As per the Scheme, the
Business Directories business, the New Media business and the
Publishing business of the Company shall be demerged into Network 18
Media & Investments Limited while the Printing Press business will
continue to remain with the Company. The Scheme has been approved by
the shareholders and creditors (secured and unsecured) of the Company
at their meetings held on February 23,2011, convened pursuant to the
directions of the Hon'ble High Court of Delhi. The Company has to file
second motion application under Section 391-394 of the Companies Act,
1956 with the Hon'ble High Court of Delhi for the approval of the
Scheme. The Appointed date for the proposed restructuring is April
1,2010 and the Scheme shall be effective when the certified copies of
the High Court Orders are filed with the Registrar of Companies, which
is still pending. Accordingly no effect of the Scheme has been given in
these financial statements for the year ended March 31,2011.
3. The Company has cash credit facilities, working capital demand
loans and term loans with banks which are secured by:
a) Terms Loans:
Axis Bank
Principal of Rs. Nil (2009-2010: Rs. 131,250,000)
Interest accrued and due of Rs. Nil(2009-2010: Rs. 2,693,132)
-The loan has been repaid during the year
Punjab National Bank
Principal of Rs. 110,006,687 (2009-2010: Rs. 119,044,783)
Interest accrued and due of Rs. 1,574,178(2009-2010: Rs. 1,466,045)
-First exclusive charge/ mortgage on all immovable and moveable assets
of the Company.
-Second charge on all existing fixed assets of the Company including
all immovable properties of the Company.
-Corporate Guarantee from Network18 Media & Investments Limited
-Interest accrued and due of Rs. Ã1,574,178 has been duly debited by
bank on April 2,2011
b) Working Capital Demand Loans:
HSBC
Principal of Rs. Nil (2009-2010: Rs. 50,000,000)
Interest accrued and due of Rs. Nil (2009-2010: Rs. Nil)
The loan has been repaid during the year
c) Cash Credit Facilities:
Axis Bank
Principal of Rs. Ã99,012,367 (2009-2010: Rs. 93,737,287)
- Pari passu second charge on all fixed assets of the Company.
- Pari passu first charge on all current assets of the Company.
- Corporate Guarantee from Network 18 Media & Investments Limited
4. Other income for the year ended March 31,2011 includes Rs. Nil
(2009-2010:72,062,162) pertaining to provision no longer required for
printing expenses written back.
5. The net difference in foreign exchange (i.e. the difference between
the spot rates on the dates of the transactions and the actual rates at
which the transactions are settled/ appropriate rates applicable at the
year end) debited to profit and loss account as disclosed under
Schedule 'P' is Rs. 2,567,471 (2009-2010:Rs. 1,807,119).
6. Provisions and Contingencies -
a) Claims against the Company not acknowledged as debts:
i. The Company has received demands of Rs. 109,870,463 (2009-2010:
Rs.36,404,621) towards Income Tax for the Assessment Year
2005-06,2006-2007,2007-2008 & 2008-2009 and Rs. Nil (2009-2010:
Rs.2,506,882) for Fringe benefit Tax for Assessment Year 2006-07. The
Company has disputed the demands and has preferred / is in the process
of preferring appeals before appellate authorities, to set aside the
demands and carry out necessary rectifications. The Company has also
been legally advised that the possibility of matters being decided
against the Company and the demands crystallizing is not likely.
ii. Sales tax / Works Contract tax matters disputed by the Company
relating to issue of applicability, allowability, etc. aggregating to
Rs. 41,556,776 (2009-2010: Rs. 4,839,279) for the F.Y 1999-2000,2000-
2001,2001-2002 and 2002-03.
iii. Third party claim relating to compensation before Monopolies and
Restrictive Trade Practices Commission aggregating to Rs. Nil
(2009-2010: Rs. 20,000,000), net of tax Rs.Nil (2009-2010:
Rs.13,268,000).
iv. Third party claim relating to Service Tax pending with Allahabad
High Court aggregating to Rs. 16,993,598 (2009-2010: Rs. Nil)
In respect of the demands/claims described in paragraphs (i), (ii) and
(iv) above, the Company has also assessed that the possibility of these
cases being decided against the Company and the demand crystallizing on
the Company is not probable and hence no provision is required.
v. Bank guarantee given to Bombay Stock Exchange ('BSE') towards issue
of Equity shares on rights basis amounting to Rs. 5,000,000(2009-2070:
Rs.5,000,000).
b) Provision
A provision is recognised for expected returns on products sold during
the year based on past experience of level of returns. It is expected
that most of this cost will be utilised in the next financial year.
Assumptions used to calculate the provision for returns are based on
current sales level and current information available about returns.
7. Employee Stock Option Plans (ESOP) 2004 and 2007
This scheme (ESOP 2004) is covered under the approval of the
shareholders vide their Annual General Meeting held on July 28, 2004 as
modified at Extra Ordinary General Meeting held on January 20, 2005 and
Annual General Meeting held on October 10,2006 and further modified
through postal ballot resolution , results whereof were declared on
July 15,2010.
Employee Stock Option Plan 2007 (ESOP 2007):
This scheme (ESOP 2007) is covered under the approval of the
shareholders vide their Extra-Ordinary General Meeting held on January
10, 2008 and further modified through postal ballot resolution, results
whereof were declared on May 7,2010.
Employee Stock Purchase Plan 2010 (ESPP 2010):
During the year, the Company had also introduced an Employee Stock
Purchase Plan, 2010 (ESPP 2010) which was approved by shareholders vide
postal ballot resolution, results whereof were declared on May 7, 2010.
However, there has been no activity under this Scheme till balance
sheet date.
Since the Company uses the intrinsic value method, the impact on the
reported net profit/(loss) and earnings per share by applying the fair
value based method needs to be disclosed.
8. The Company's significant leasing arrangements are in respect of
operating leases for premises (offices, residential, stores, godowns,
etc.). These leasing arrangements, which are mutually cancellable
generally, range between 11 months and 60 months. There is no
escalation clause in the lease agreements. There are no restrictions
imposed by lease arrangements. The aggregate lease rentals amounting to
Rs. 156,088,443 (2009-2010: Rs. 111,720,792) are charged as Rent under
Schedule "P"
9. The identification of Micro, Small and Medium enterprises is based
on the management's knowledge of their status as at March 31,2011.The
Company has requested and received intimation from "suppliers"
regarding their status as at March 31, 2011 under the Micro, Small and
Medium Enterprises Development Act, 2006. Hence disclosures, as per
such intimations relating to amounts unpaid as at the year end together
with interest paid / payable as required under the said Act have been
made.
10. Derivative transactions:
The above disclosures have been made consequent to announcement by the
Institute of Chartered Accountants of India in December 2005, which is
applicable to the financial periods ending on or after March 31,2006.
11. Particulars of goods manufactured, etc:
a. Class of goods manufactured: Printed products of all kinds include
annual reports, greeting cards, calendars, diaries, books, newspapers,
magazines and other periodicals, directories, catalogues, publicity
material, stationery, typesetting, half-tones, colour separations,
plates and combinations there of.
b. The nature of the Company's operations is such that there is no
known physical measure of standard classification for its saleable
products. Consequently, quantitative information regarding production,
turnover and opening and closing stocks of finished goods has not been
given.
c. The printing industry has been delicensed.The installed printing
capacity as on March 31,2011, computed on the basis of normal shifts
worked, was 3,406 million (2009-2010 : 3,406 million) standard
impressions. The actual production (including wastage) during the year
was 1,215 million (2009-2010:1,306 million) standard impressions. The
installed printing capacity and actual production have been certified
by the management and accepted by the auditors being a technical
matter.
d. Sales include 13,426 numbers (2009-2010; 7,774 numbers) of
Touchstone' gift articles worth Rs. 1,963,916 (2009-2010: Rs.401,805)
and 10,065 numbers (2009-2010 : 2,429 numbers) of other traded goods
worth Rs. 893,957 (2009-2010 :Rs. 343,795).
12. Related Parties Disclosures:
a Particulars of parties where control exists:
i. Television Eighteen India Holding company of l-Ven
Limited ('TV 18') Interactive Limited till August
24,2009. Holding Company of
Infomedia 18 Limited from August
21,2008 by virtue of control of
the Board of Directors.
ii.Network18 Media & Holding company of Television
Investments Limited Eighteen India Limited.
('Network 18')
iii.Cepha Imaging Private Subsidiary company w.e.f December
Limited (CEPHA) 22,2005 till May 31,2010
iv.Glyph International UK Subsidiary company w.e.f December
Limited 22,2005 till May 31,2010
(Formerly Keyword Group
Limited)(GIUK)
v.Keyword Publishing Services Subsidiary company of Glyph
International UK Limited (Formerly
Keyword Group Limited)(GIUK) till
September 22,2009
vi.Keyword Typesetting Services Subsidiary company of Glyph
Limited International UK Limited
(Formerly Keyword Group Limited)
(GIUK) till September 22,2009
vii.Glyph International Limited Subsidiary company since April 1,
(Formerly American 2006 till May 31,2010
Devices India Private
Limited)(ADIPL)
viii.Glyph International US LLC Subsidiary company since April 1,
(Formerly American 2006 till May 31,2010
Services LQ(SSLC)
b Particulars of other parties:
Key Management Personnel
Mr.Haresh Chawla - Managing Director of the Company since
August 21,2008
c Joint Venture:
Reed Infomedia India
Private Limited ('REED') - Joint control since March 30,2006
d Fellow subsidiaries:
i. ibn18 Broadcast Limited ('ibn 18') - Fellow subsidiary since
August 21,2008
ii.TV18 Home Shopping Network Limited - Fellow subsidiary since
('Homeshop 18') August 21,2008
iii.Viacom18 Media Private Limited - Fellow subsidiary since
('Viacom 18') August 21,2008
iv.Network18 Publication Limited - Fellow subsidiary since
August 21,2008
v. Digital 18 Media Limited - Fellow subsidiary since
('Digital 18') August 21,2008
vi.Web18 Software Services Limited - Fellow subsidiary since
('Web 18') August 21,2008
vii.e-Eighteen.Com Limited (E-18.Com) - Fellow subsidiary since
August 21,2008
viii.E18, division of Network18 - Fellow subsidiary since
('E-18') August 21,2008
ix.Sports18, division of Network 18 - Fellow subsidiary since
('Sports18') August 21,2008
x.IBN Lokmat News Private Limited - Fellow subsidiary since
('IBN Lokmat') August 21,2008
13. Employee Benefits
B Gratuity
The Company has a defined benefit gratuity plan.The gratuity is payable
to all employees of the Company at the rate of half month salary for
services more than 10 years but less than 15 years, three fourth month
salary for services more than 15 years but less than 20 years and one
month salary for services more than 20 years with ceiling of 20 months
salary. All payments are subject to minimum as paid under the Payment
of Gratuity Act. The annual contributions made to the Trust are
invested as per the rules of the Trust. The shortfall between the
accumulated fund balance and the liability as determined on the basis
of an independent actuarial valuation is provided for as at the year
end.
C Leave Encashment
In accordance with leave policy, the Company has provided for leave
entitlement on the basis of actuarial valuation carried out at the end
of the year. The short term compensated absences are provided for on
the basis of actuarial valuation as at the year end.
The following tables summaries the components of net benefit expense
recognized in the profit and loss account and the funded status and
amounts recognized in the balance sheet for the respective plan.
14. Going Concern
The Company has incurred a loss of Rs. 306,564,169 (2009-2010: Loss of
Rs. 500,343,241) during year ended March 31, 2011 and the accumulated
losses of the Company as at March 31, 2011 are Rs.1,240,234,034
(2009-2010: 933,669,865). During the year 2009-10, the Company has
raised equity vide rights issue, amounting to Rs. 998,989,062 to
augment the equity in the Company. The unutilized funds from the Rights
issue as at March 31, 2011 are Rs 109,454,000. The Parent Company has
also given support letter to extend any financial support, which may be
required by the Company. The Company is in the process of restructuring
its business as described in Note 3 above. The Company's Printing Press
business may also be sold off. In the event that the assets of the
Printing Press business are sold off, the Company shall consider
starting a new line of business in the Company out of the resulting
cash. The Company has also sold its entire equity stake in its four
subsidiaries carrying on the Publishing BPO business which has resulted
in significant cash flows to the Company during the year ended March
31,2011. Management has assessed and confirmed that considering these
factors the Company shall continue to be a going concern and hence,
these financial statements have been prepared on a going concern basis.
15. Exceptional items
i) As per Share Purchase Agreement ('SPA') with Knowledge works Global
Private Limited (a Cenveo Inc company) on May 4,2010, the Company has
sold its entire equity stake in its 4 subsidiaries. The net loss on the
sale of these subsidiaries amounting to Rs.12,378,701 has been
disclosed as an Exceptional item in the financial statements for the
year ended March 31, 2011.
ii) Excess impairment provision in respect of fixed assets held at
leased office of Rs.7,560,048 has been reversed during the year which
has been disclosed as an Exceptional item in the financial statements
for the year ended March 31, 2011.
iii) During the year ended March 31, 2009, the Company had made a
provision for diminution in the value of long term investments in
subsidiaries amounting to Rs 160,000,000. Considering the sales
consideration to be received as per the SPA, the Company was of the
view that there would be no diminution in the value of the said
investments and hence the same was written back during the year ended
March 31, 2010 and disclosed as an exceptional item. The Company had
also made provision for diminution in the value of investments in a
Joint Venture Company amounting to Rs.12,000,000 during the year ended
March 31,2010 and the same has also been disclosed as an Exceptional
item in the financial statements for the year ended March 31,2010.
16. i) During the year 2009-10 the Company has made an issue of equity
shares on rights basis in the ratio of three
equity shares for every two equity shares held on the record date. The
rights issue consisted of 29,827,655 equity shares issued at a premium
of Rs.23.50 per equity share aggregating to Rs. 998,989,062. The issue
opened on December 29, 2009 and closed on January 15,2010 and was fully
subscribed.
ii) The Company has incurred expenses of Rs. Nil (2009-2010:
Rs.21,325,242) in connection with the rights issue of its equity
shares. This amount has been set off against the share premium arising
from the rights issue of equity shares as permitted under section 78 of
the Companies Act,1956.
iii) The Company has utilized an aggregate sum of Rs. 889,535,062
towards the purposes as stated in the prospectus filed for the offer of
shares on rights basis, from the proceeds of the rights issue of equity
shares of Rs.33.50 each. The unutilized funds of Rs. 109,454,000 are
deployed in Liquid Mutual Funds disclosed as Current Investments in the
Balance sheet.
17. Barter transactions are recognized at the fair value of
consideration receivable or payable. When the fair value of the
transactions cannot be measured reliably, the revenue/expense is
measured at the fair value of the goods/ services provided/received
adjusted by the amount of cash or cash equivalent transferred. During
the year ended March 31, 2011, the Company had entered into barter
transactions, which were recorded at the fair value of consideration
receivable or payable. The profit and loss account for the year ended
March 31, 2011 has been grossed up to reflect revenue from barter
transactions of Rs 33,184,369(2009-2010:Rs. 46,123,298) and expenditure
of Rs. 33,184,369(2009-2070: Rs 46,123,298) being the fair value of
barter transactions provided and received.
18. Estimated amount of contracts remaining to be executed on capital
account and not provided for amounts to Rs. 3,010,655 (2009-2010: Rs.
17,293,874).
19. During the previous year, Hon'ble High Court of Bombay had
approved the Scheme of Arrangement ('the Scheme') between l-Ven
Interactive Limited ('l-Ven'), Infomedia 18 Limited and their
respective shareholders vide its order dated 24th July 2009. The Scheme
was effective from 25th August 2009 on filing the copies of the order
of the Hon'ble High Court with the Registrar of Companies. Accordingly
l-Ven was merged with Infomedia 18 Limited on the effective date.
Further pursuant to the Scheme, the Company had extinguished 12,338,112
Equity Shares held by l-Ven and equivalent number of shares have been
issued by the Company to the shareholders of l-Ven in the swap ratio of
96.076:100. Upon the scheme becoming effective, the Company had
recorded l-Ven Undertaking vested in it pursuant to the Scheme, at the
respective book values as appearing in the financial statements of I-
Ven as on the effective date, in accordance with "The Pooling of
Interest" method as prescribed under Accounting Standard - 14 issued by
The Institute of Chartered Accountants of India. The Company had
credited to its Share Capital Account, the aggregate face value of the
new equity shares issued on amalgamation to the shareholders of l-Ven.
The Company had recorded the balances in the share premium and the
general reserve of l-Ven in the same form and at the same values as
they appeared in the financial statements of l-Ven immediately
preceding the effective date. The aggregate of the excess/deficit of
the value of assets over the value of liabilities of l-Ven vested in
the Company, and the differential between the value of the investment
in the equity share capital of the Company appearing in the books of
accounts of l-Ven and the face value of the equity share capital of the
Company held by l-Ven, had been debited to following accounts in the
under-mentioned sequence: balance in security premium account, balance
in general reserve account and balance in profit and loss account.
20. Interest in Joint venture
The Company has a 49% interest in the assets, liabilities, expenses and
income of Reed Infomedia India Private Limited, incorporated in India,
which is involved in business of publishing B2B magazines.
21. The registered office of the Company has been shifted to 503,504 &
507,5th Floor, Mercantile House, 15, Kasturba Gandhi Marg, New Delhi
-110001, pursuant to confirmation by Company Law Board, Mumbai bench
with effect from October 19,2010.
22. Previous year's figures have been regrouped wherever necessary to
conform with figures of the current year.
Mar 31, 2010
1. Nature of Operations:
Infomedia 18 Limited (the Company) is in the business of publishing
Business Directories and Special Interest Magazines in India, Printing
services and Agency services.
2. Barter transactions are recognised at the fair value of
consideration receivable or payable. When the fair value of the
transactions cannot be measured reliably, the revenue/expense is
measured at the fair value of the goods/ services provided/received
adjusted by the amount of cash or cash equivalent transferred. During
the year ended March 31, 2010, the Company had entered into barter
transactions, which were recorded at the fair value of consideration
receivable or payable. The profit and loss account for the year ended
March 31, 2010 has been grossed up to reflect revenue from barter
transactions of Rs 46,123,298 (2008-2009:Rs. 34,787,605) and
expenditure of Rs 46,123,298 (2008-2009:Rs . 34,787,605) being the fair
value of barter transactions provided and received.
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for amounts to Rs. 17,293,874 (2008-2009:
Rs.14,457,643).
4. The Company has cash credit facilities, working capital demand
loans and term loans with banks which are secured by:
a) Terms Loans: Axis Bank
Principal of Rs. 131,250,000 (2008-2009 : Rs.218,750,000)
Interest accrued and due of Rs. 2,693,132(2008-2009:Rs.2,302,440)
- First charge on all fixed assets of the Company. (Both movable and
immovable, present and future)
- First pari passu charge on all current assets of the Company (Both
present and future)
- Pledge of shares in subsidiary companies (29% of issued and
subscribed share capital of American Devices India Private Limited
and Cepha Imaging Private Limited pledged in Favour of bank)
- Corporate Guarantee from Network18 Media & Investments Limited
- Interest accrued and due of Rs. 2,693,132 has been duly debited by
bank on April 5, 2010.
Punjab National Bank
Principal of Rs. 119,044,783 (2008-2009 : Rs. Nil)
Interest accrued and due of Rs. 1,466,045 (2008-2009 : Rs.Nil)
- First exclusive charge/ mortage on all immovable and moveable
assets of the Company.
- Second charge on all existing fixed assets of the Company.
- Corporate Guarantee from Network18 Media & Investments Limited
- Interest accrued and due of Rs. 1,466,045 has been duly debited by
bank on April 6, 2010
b) Working Capital Demand Loans: HSBC
Principal of Rs. 50,000,000 (2008-2009 : Rs. 50,000,000 ) Interest
accrued and due of Rs. Nil (2008-2009 : Rs. 88,767 )
- First pari passu charge on all current assets of the Company
(present and future)
- Second pari passu charge on movable and immovable fixed assets
of the Company
c) Cash Credit Facilities: Axis Bank
Principal of Rs. 93,737,287(2008-2009 : Rs.89,486,550 )
- Pari passu second charge on all fixed assets of the Company.
- Pari passu first charge on all current assets of the Company.
- Corporate Guarantee from Network18 Media & Investments Limited
Standard Chartered
Principal of Rs. Nil (2008-2009 : Rs 241,052,992 ) Charge exists till
the loan is repaid
- First charge on all fixed assets of the Company (present and
future)
- Second pari passu charge on all current assets of the Company
(present and future) Letter of comfort given by Infomedia 18 Limited
5. Other income for the year ended March 31, 2010 includes Rs.
72,062,162(2008-2009: Nil) pertaining to provision no longer required
for printing expenses written back.
6. The net difference in foreign exchange (i.e. the difference between
the spot rates on the dates of the transactions and the actual rates at
which the transactions are settled/ appropriate rates applicable at the
year end) debited to profit and loss account is Rs. 1,807,119
(2008-2009:gain of Rs. 1,047,794).
7. Provisions and Contingencies Ã
a) Claims against the Company not acknowledged as debts:
i. The Company has received demands of Rs. 36,404,621(2008-2009:Rs.
153,027,656) towards Income Tax for the Assessment Year 2005-06,
2006-2007, 2007-2008 & 2008-2009 and 2,506,882 (2008-2009: Rs.
2,506,882) for Fringe benefit Tax for Assessment Year 2006-07. The
Company has disputed the demands and has preferred appeals with the
appellate authorities, to set aside the demand and carry out necessary
rectifications. The Management has assessed that the possibility of the
case being decided against the Company and the demand crystallizing on
the Company is not probable and hence no provision is required.
ii. Sales tax / Works Contract tax matters disputed by the Company
relating to issue of applicability, allowability, etc. aggregating to
Rs. 4,839,279 (2008-2009: Rs. 4,839,279).
iii. Third party claim relating to compensation before Monopolies and
Restrictive Trade Practices Commission aggregating to Rs. 20,000,000
(2008-2009:Rs. 20,000,000), net of tax Rs.13,268,000 (2008-2009:Rs.
13,268,000). The matter is pending for final hearing.
iv. Standby Letter of Credit issued for GBP Nil (2008-2009: GBP
200,000), in favour of Barclays Bank Plc, towards banking facilities
used by Glyph International UK Limited (Formerly Keyword Group
Limited),UK (a subsidiary of the Company).
v. Bank guarantee given to Bombay Stock Exchange (BSE) towards issue
of Equity shares on rights basis amounting to Rs. 5,000,000(2008-2009:
Rs. Nil).
A provision is recognised for expected returns on products sold during
the year based on past experience of level of returns. It is expected
that most of this cost will be utilised in the next financial year.
Assumptions used to calculate the provision for returns are based on
current sales level and current information available about returns.
Since the Company uses the intrinsic value method, the impact on the
reported net profit and earnings per share by applying the fair value
based method needs to be disclosed.
In March 2005 the ICAI has issued a Guidance Note on "Accounting for
Employees Share Based Payments" applicable to employee based share
plan, the grant date in respect of which falls on or after April 1,
2005. The said Guidance Note requires Proforma disclosures of the
impact of the fair value method of accounting of employee stock
compensation accounting in the financial statements. Applying the fair
value based method defined in the said Guidance Note, the impact on the
reported net profit and earnings per share would be as follows:
Managing Directors remuneration for the year ended March 31, 2010 is
Rs. Nil ((2008-2009 (from 01.04.2008 to 20.08.2008): Rs.3,744,756)) is
inclusive of, estimated money value of perquisites of Rs. Nil.
(2008-2009: 574,330). As the future liability for gratuity and leave
encashment is provided on an actuarial basis for the Company as a
whole, the amount pertaining to the directors is not included above.
The Central Government approval for Managerial Remuneration paid to the
Managing Director during financial year 2008-2009 has been received.
The Auditors had modified their audit report in this respect for the
financial year 2008-2009.
8. The Companys significant leasing arrangements are in respect of
operating leases for premises (offices, residential, stores, godowns,
etc.). These leasing arrangements, which are mutually cancellable
generally, range between 11 months and 39 months. There is no
escalation clause in the lease agreements. There are no restrictions
imposed by lease arrangements. The aggregate lease rentals amounting to
Rs. 111,720,792 (2008-2009: 152,283,011) are charged as Rent under
Schedule "P".
9. The identification of Micro, Small and Medium enterprises is based
on the managements knowledge of their status as at March 31, 2010. The
Company has requested and received intimation from "suppliers"
regarding their status as at March 31, 2010 under the Micro, Small and
Medium Enterprises Development Act, 2006. Hence disclosures, as per such
intimations relating to amounts unpaid as at the year end together with
interest paid / payable as required under the said Act have been made.
10. Derivative transactions:
The Company has not entered into any derivative transactions (including
Forward Exchange Contracts) during the year. The year end foreign
currency exposures that have not been hedged by a derivative instrument
or otherwise are given below:
The above disclosures have been made consequent to announcement by the
Institute of Chartered Accountants of India in December 2005, which is
applicable to the financial periods ending on or after March 31, 2006.
11. Particulars of goods manufactured, etc:
a. Class of goods manufactured: Printed products of all kinds include
annual reports, greeting cards, calendars, diaries, books, newspapers,
magazines and other periodicals, directories, catalogues, publicity
material, stationery, typesetting, half-tones, colour separations,
plates and combinations thereof.
b. The nature of the Companys operations is such that there is no
known physical measure of standard classification for its saleable
products. Consequently, quantitative information regarding production,
turnover and opening and closing stocks of finished goods has not been
given.
c. The printing industry has been delicensed. The installed printing
capacity as on March 31, 2010, computed on the basis of normal shifts
worked, was 3,406 million (2008-2009 : 3,406 million) standard
impressions. The actual production (including wastage) during the year
was 1,306 million (2008-2009 : 1,456 million) standard impressions. The
installed printing capacity and actual production have been certified
by the management and accepted by the auditors being a technical
matter.
d. Sales include 7,774 numbers (2008-2009 ; 123,023 numbers) of
Touchstone gift articles worth Rs. 401,805 (2008-2009 : Rs.
7,712,211) and 2,429 numbers(2008-2009 : 5,628 numbers.) numbers of
other traded goods worth Rs. 343,795 (2008-2009 : Rs. 923,569).
12. Related Parties Disclosures:
a Particulars of parties where control exists:
i. I-Ven Interactive Limited Holding company till August 24, 2009,
Merged with Infomedia 18 Limited on August 25, 2009. (Refer Note 29)
ii. Television Eighteen India Limited (TV 18) Holding company of
I-Ven Interactive Limited till August 24, 2009. Holding Company of
Infomedia 18 Limited from August 21, 2008.
iii. Network18 Media & Investments Limited Holding company of
Television Eighteen India Limited.
(Network 18)
iv. Cepha Imaging Private Limited (CEPHA) Subsidiary company since
December 23, 2005
v. Glyph International UK Limited Subsidiary company since December
23, 2005
(Formerly Keyword Group Limited)(Keyword)
vi. Keyword Publishing Services Subsidiary company of Glyph
International UK Limited
(Formerly Keyword Group Limited)(Keyword)
vii. Keyword Typesetting Services Limited Subsidiary company of Glyph
International UK Limited
(Formerly Keyword Group Limited)(Keyword)
viii. Glyph International Limited Subsidiary company since April 1,
2006
(Formerly American Devices India Private Limited )(ADIPL)
ix. Glyph International US LLC Subsidiary company since April 1, 2006
(Formerly Software Services LC)(SSLC)
b Particulars of other parties:
Key Management Personnel
Mr. Haresh Chawla à Managing Director of the Company since August 21,
2008
c Joint Venture:
Reed Infomedia India Private Limited (REED) Ã Joint control since
March 30, 2006 d Group Companies:
i. ibn18 Broadcast Limited (ibn 18) Ã Group company since August
21,2008
ii. TV18 Home Shopping Network Limited à Group Company since August
21,2008 (Homeshop 18)
iii. Viacom18 Media Private Limited à Group company since August
21,2008
(Viacom 18)
iv. Network18 Publication Limited à Group company since August 21,2008
v. Digital 18 Media Limited (Digital 18) Ã Group company since
August 21,2008
vi. Web18 Software Services Limited à Group company since August
21,2008
(Web 18)
vii. E18.com Limited(E 18) Ã Group company since August 21,2008
B - Gratuity
The Company has a defined benefit gratuity plan. The gratuity is
payable to all employees of the Company at the rate of half month
salary for services more than 10 years but less than 15 years, three
fourth month salary for services more than 15 years but less than 20
years and one month salary for services more than 20 years with ceiling
of 20 months salary. All payments are subject to minimum as paid under
the Payment of Gratuity Act. The annual contributions made to the Trust
are invested as per the rules of the Trust. The shortfall between the
accumulated fund balance and the liability as determined on the basis
of an independent actuarial valuation is provided for as at the year
end.
C - Leave Encashment
In accordance with leave policy, the Company has provided for leave
entitlement on the basis of actuarial valuation carried out at the end
of the year. The short term compensated absences are provided for on
the basis of actuarial valuation as at the year end.
The following tables summaries the components of net benefit expense
recognized in the profit and loss account and the funded status and
amounts recognized in the balance sheet for the respective plan.
Profit and Loss Account
Net employee benefit expense (recognised in Employee Cost)
13. Going Concern
The Company has incurred a loss of Rs. 500,343,241 during the financial
year 2009-2010 (2008-2009: Loss of Rs. 846,539,165). During the year,
the Company has raised equity vide rights issue, amounting to Rs.
998,989,062 to augment the equity in the Company. The Parent Company
has already infused liquidity in the nature of Inter Corporate Deposits
amounting to Rs 180,000,000 (2008-2009: Rs. 405,000,000). The Parent
Company has also given support letter to extend any financial support,
which may be required by the Company. The Company is in the process of
restructuring its business. Accordingly, new lines of business are
being added, which along with consolidation of existing products and
introduction of new products in the publishing segment are expected to
improve the revenues of the Company. The Company is in the process of
introducing new technologies in its product offering, so as to cater to
newer markets and de-risk the revenue streams. The Company has also
entered in to a Share Purchase Agreement (SPA) with Knowledgeworks
Global Private Limited, a Cenveo Inc. company, in May 2010 to sell its
entire equity stake in its four subsidiaries carrying on the Publishing
BPO business which would result in significant cash flows to the
Company during the year to end March 31, 2011, The SPA is subject to
necessary approvals. Considering these factors, these financial results
have been prepared on a going concern basis.
14. The Company had issued 5,000,000 and 1,000,000 preferential Equity
Warrants to Television Eighteen India Limited and India Advantage Fund
II respectively, convertible into equity shares at an exercise price of
Rs.237/- per equity share. The Convertible warrants were issued as per
Chapter XIII of SEBI Guidelines on preferential basis and each warrant
was convertible into one equity share within a period of eighteen
months from the date of allotment i.e. January 30, 2008. The amount
received from the above parties was Rs.142,200,000 representing 10% of
the total value of convertible warrants, as per the terms of issue the
investors were required to pay balance 90% at the time of conversion of
said warrants into equity. Further in case the investors do not opt for
conversion of the warrants, the upfront amount so paid would stand
forfeited by the Company and all the rights attached to the warrants
lapse automatically.
However, none of the warrant holders exercised the option to convert
any of the aforesaid warrants till the last date of conversion (within
18 months from date of allotment). Accordingly, during the year the
Company forfeited the amount of Rs. 142,200,000 paid on the warrants
due to non exercise of the option by the warrant holders. This amount
has been transferred from Share Application money account and credited
to Capital Reserve Account during the year.
15. Exceptional items
i) The Company has entered into a Share Purchase Agreement (SPA) with
Knowledgeworks Global Private Limited, a Cenveo Inc. company, in May
2010 to sell its entire equity stake in its four subsidiaries carrying
on the Publishing BPO business. In the previous year, the Company had
made a provision of Rs.160,000,000, for diminution in the value of
investments. Considering the sales consideration to be received as per
the SPA, the Company is of the view that the provision made of
Rs.160,000,000 is no longer required and hence the same has been
reversed during the year. This amount has been disclosed as an
exceptional item. The Company has also made provision for diminution in
the value of investments in a joint venture company amounting to
Rs.12,000,000 during the year and the same has also been disclosed as
an exceptional item.
ii) Exceptional items for the year ended March 31, 2009 includes Rs.
22,778,641 towards Termination cost of employees, Rs. 20,010,941
towards Impairment of assets held at leased office, Rs. 37,000,000
towards Provision for diminution in value of Investment and Receivable
in Joint Venture Company, Rs. 160,000,000 towards Provision for
estimated diminution in the Value of Investment.
16. i) During the year, the Company has made an issue of equity shares
on rights basis in the ratio of three equity shares for every two equity
shares held on the record date. The rights issue consisted of 29,827,655
equity shares issued at a premium of Rs.23.50 per equity share aggregating
to Rs. 998,989,062. The issue opened on December 29, 2009 and closed on
January 15, 2010 and was fully subscribed.
ii) The Company has incurred expenses of Rs. 21,325,242 (Rs. 20,000,000
up to March 31, 2009) in connection with the rights issue of its equity
shares. This amount has been set off against the share premium arises
from the rights issue of equity shares as permitted under section 78 of
the Companies Act, 1956. This amount was disclosed under the head
Advances recoverable in cash or kind or for value to be received under
Loans and Advances in the Balance Sheet in the previous year.
iii) The Company has utilized an aggregate sum of Rs. 778,989,062
towards the purposes as stated in the prospectus filed for the offer of
shares on rights basis, from the proceeds of the rights issue of equity
shares of Rs.33.50 each. The unutilized funds of Rs. 220,000,000 are
deployed in Liquid Mutual Funds disclosed as Current Investments in the
Balance sheet.
17. Honble High Court of Bombay had approved the Scheme of
Arrangement (the Scheme) between I-Ven Interactive Limited (I-Ven),
Infomedia 18 Limited and their respective shareholders vide its order
dated 24th July 2009. The Scheme was effective from 25th August 2009 on
filing the copies of the order of the Honble High Court with the
Registrar of Companies. Accordingly I-Ven was merged with Infomedia 18
Limited on the effective date. Further pursuant to the Scheme, the
Company has extinguished 12,338,112 Equity Shares held by I-Ven and
equivalent number of shares have been issued by the Company to the
shareholders of I-Ven in the swap ratio of 96.076:100. Upon the scheme
becoming effective, the Company has recorded I-Ven Undertaking vested
in it pursuant to the Scheme, at the respective book values as
appearing in the financial statements of I-Ven as on the effective
date, in accordance with "The Pooling of Interest" method as prescribed
under Accounting Standard à 14 issued by The Institute of Chartered
Accountants of India. The Company has credited to its Share Capital
Account, the aggregate face value of the new equity shares issued on
amalgamation to the shareholders of I-Ven. The Company has recorded the
balances in the share premium and the general reserve of I-Ven in the
same form and at the same values as they appeared in the financial
statements of I-Ven immediately preceding the effective date. The
aggregate of the excess/deficit of the value of assets over the value
of liabilities of I-Ven vested in the Company, and the differential
between the value of the investment in the equity share capital of the
Company appearing in the books of accounts of I-Ven and the face value
of the equity share capital of the Company held by I-Ven, has been
debited to following accounts in the under-mentioned sequence: balance
in security premium account, balance in general reserve account and
balance in profit and loss account.
18. The Company had paid Rs. 21,000,000 for acquisition of trade
marks, copyrights, domain names etc. in connection with starting of
call centre services. In addition to this, the Company has incurred
expenditure on consultancy charges, rent and lease hold improvements as
detailed below:
The management of the Company had planned to float a separate company
for the call centre services. The expenditure incurred as listed above
was for setting up of the new company which was to be exchanged for
shares in the new company. Accordingly, this amount was carried forward
under the head "Advances recoverable in cash or in kind or for value to
be received" under "Loans and Advances" in the Balance-Sheet as at
March, 31 2009. During the year ended March 31, 2010 Management has
decided that the call center service will be part of Infomedia
operations, and hence all the expenditure (other than the Capital
expenditure) amounting to Rs. 26,536,791 has been charged off to the
profit and loss account during the year ended March 31, 2010.
19. The Company has, pursuant to the resolution of the shareholders of
the Company passed on 12th June 2009 by way of a postal ballot,
increased and altered the Authorised Share Capital of the Company from
Rs. 600,000,000 to Rs. 1,000,000,000 including reclassification of
100,00,000 Redeemable Preference Shares of Rs. 10/- into 100,00,000
equity shares of Rs. 10/- each.
20. Previous years figures have been regrouped wherever necessary to
conform with figures of the current year.