General Information

The Company is an integrated online marketing and consulting company and is in the business of rendering online marketing and information technology consulting & support services largely for the financial service industry, including insurance.Summary of Significant accounting policies

2.1  Basis of Preparation of Financial Statements

These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act,1956 shall continue to apply. Consequently, these financial statements have been brpared to comply in all material aspects with the accounting standards notified under Section 211(3C) of Companies Act, 1956 [Companies (Accounting Standards) Rule, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the nature of services and the time between the rendering of service and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current-non-current classification of assets and liabilities.

2.2  Tangible Assets

Tangible Assets are stated at cost, net of accumulated debrciation and accumulated impairment losses, if any. Cost comprises of the purchase price including import duties, non-refundable taxes and other directly attributable expenses incurred to bring the assets to the location and condition necessary for it to be capable of being operated in manner intended by management.

Subsequent cost related to an item of Property, Plant & Equipment  are  recognized in the carrying amount of the item if the recognition criteria are met.

Losses arising from the retirement of, and gains or losses arising from disposal of Property, Plant & Equipment  which are carried at cost are recognised in the Statement of Profit and Loss.

Debrciation is provided on a pro-rata basis on the straight line method over the estimated useful lives of the assets, which are as follows:

Assets                                      Useful life (Years)

Office Equipments *                           3

Furniture & Fixtures *                         7

Computers                                           3

*For these class of assets, based on internal assessment the management believes that the      useful lives as given above best rebrsent the period over which the management expects to use these assets. Hence, useful lives of these assets is different from the useful lives as brscribed under Part C of Schedule II of the Companies Act, 2013.

 Assets costing less than Rs. 5,000 are fully debrciated in the year of acquisition.

2.3 Intangible Assets

 Intangible Assets are stated at acquisition cost, net of accumulated amortization and     accumulated impairment losses, if any. Intangible assets are amortized on a straight line basis over their estimated useful lives. The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from brvious estimates, the amortization period is changed accordingly. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Statement of Profit and Loss.

The amortization rates used are:

Assets                                       Useful life (Years)

Software Licenses                                 3

2.4  Impairment of Assets

Assessment is done at each balance sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. If any such indication exists, an estimate of the recoverable amount of the asset is made. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount.

2.5    Foreign Currency Transactions

Transactions in foreign currency are accounted for at the rate brvailing on the date of the transaction. Gain/Loss arising on fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss. Foreign currency monetary assets and liabilities are restated at the exchange rate brvailing at the year end and the overall net gains/loss is adjusted to the Statement of Profit and Loss.

      2.6  Revenue Recognition

The Company earns revenue primarily by rendering the following services viz.

·         Online marketing and consulting services

·         Commission on web aggregation of financial products

·         Marketing support

·         Sale of Leads

·         IT Support Services

Revenue is recognised as the related services are rendered/performed in accordance with the specific terms of the contracts with the customers and no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the services.

             Revenue in excess of billings of services is included as unbilled revenue in other current assets.

All the above streams of revenue are shown net of service tax.

2.7  Other Income

Interest: Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

2.8  Investments    

             Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments, such reduction being determined and made for each investment individually.

2.9  Employee Benefits

(i) Provident Fund and Employee State Insurance Scheme: Contribution towards provident fund and Employees State Insurance Scheme for employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis which are charged to the statement of profit and loss.

(ii) Gratuity: The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. The Company’s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.

(iii) Compensated Absences: Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as other long term employee benefits. The Company’s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.

2.10  Leases

Lease payments under an operating lease are recognised as expense in the Statement of Profit  and Loss on a straight line basis over the lease term.

2.11 Current and deferred tax

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws brvailing in the respective jurisdictions.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.  In situation, where the company has unabsorbed debrciation or carry forward losses under tax laws, all deferred tax assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognised deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is legally enforceable right to set off assets against liabilities rebrsenting current tax and where the deferred tax assets and the deferred tax liabilities on income levied by the same governing taxation laws.

             Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent

             there is convincing evidence that the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.   

2.12  Earnings Per Share (EPS)

Basic and Diluted earnings per share are calculated by dividing the net profit or loss after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

2.13 Employee Stock Option based Compensation

Stock options granted to the employees (including employees of subsidiary companies) who accepted the grant under the Company’s Stock Option Plan are accounted for in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India. The Company follows the intrinsic value method and accordingly, the excess, if any, of the fair value of the underlying equity shares as of the date of the grant of the option over the exercise price of the option, is recognised as employee compensation cost and amortised on straight line basis over the vesting period.

2.14 Provisions and Contingencies

Provisions

Provisions are recognised when there is a brsent obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the brsent obligation at the balance sheet date and are not discounted to its brsent value.

Contingent Liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a brsent obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

2.15 Cash and Cash Equivalents

In the cash flow statement, cash and cash equivalents include cash in hand and demand deposits with bank with original maturities of three months or less.

22.  Employee Benefits Expenses

(a) Defined Contribution Plans

	March 31, 2017	March 31, 2016
	(Rs.)	(Rs.)
Amount recognised in the Statement of Profit and Loss
- Provident fund paid to the authorities	374,805	4,284,519
- Employee State Insurance paid to the authorities	5,482	-
	380,287	4,284,519

(b) Defined Benefit Plans

Gratuity payable to employees: The Company has a defined benefit gratuity plan that operates through a trust. Every employee is entitled to the benefit equivalent to 15 days salary last drawn for each completed year of service. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.

(i) Changes in the Present Value of Obligation:

	As at  March 31, 2017	As at  March 31, 2017	As at  March 31, 2016	As at  March 31, 2016
	Employees Gratuity Fund	Compensated absences	Employees Gratuity Fund	Compensated absences
	(Rs.)	(Rs.)	(Rs.)	(Rs.)
Balance at the beginning of the year	4,042,050	1,312,696	15,671,513	-
Current Service Cost	1,019,868	615,647	1,000,488	1,312,696
Interest Cost	303,154	98,452	1,253,721	-
Benefits Paid	(1,373,227)	(240,530)	(1,635,614)	-
Actuarial (gain) / loss on obligations	(530,047)	(185,267)	(12,248,058)	-
Balance at the end of the year	3,461,798	1,600,998	4,042,050	1,312,696

(ii) Liabilities recognized in the balance sheet:

	As at  March 31, 2017	As at  March 31, 2017	As at  March 31, 2016	As at  March 31, 2016
	Employees Gratuity Fund	Compensated absences	Employees Gratuity Fund	Compensated absences
	(Rs.)		(Rs.)
Present value of defined benefit obligation as at year end	3,461,798	1,600,998	4,042,050	1,312,696
Fair value of the plan assets as at year end	(594,079)	-	(1,871,847)	-
Net Liability recognised in Balance Sheet	2,867,719	1,600,998	2,170,203	1,312,696
Recognised under :
Long term Provisions (refer note 6)	2,769,040	-	1,921,058	-
Short term Provisions (refer note 9)	98,679	1,600,998	249,145	1,312,696
	2,867,719	1,600,998	2,170,203	1,312,696

(iii) Expenses Recognised in Statement of Profit and Loss:

	As at  March 31, 2017	As at  March 31, 2017	As at  March 31, 2016	As at  March 31, 2016
	Employees Gratuity Fund	Compensated absences	Employees Gratuity Fund	Compensated absences
	(Rs.)		(Rs.)
Current service cost	1,019,868	615,647	1,000,488	1,312,696
Interest Cost	303,154	98,452	1,253,721	-
Expected return on plan asset	(140,389)	-	(111,577)	-
Net Actuarial (Gain)/loss recognized during the year	(490,710)	(185,267)	(12,226,368)	-
Add: Amounts payable to Transferee Companies	-	-	16,954,179	4,084,080
Total Expense recognized in Statement of Profit and Loss	691,923	528,832	6,870,443	5,396,776

(iv) Fair Value of Planned Assets

	As at  March 31, 2017	As at  March 31, 2016
	Employees Gratuity Fund	Employees Gratuity Fund
	(Rs.)	(Rs.)
Balance at the beginning of the year	1,871,847	917,574
Expected return on plan assets	140,389	111,577
Contributions	(5,593)	2,500,000
Benefits Paid	(1,373,227)	(1,635,614)
Actuarial gain / (loss) on plan assets	(39,337)	(21,690)
Balance at the end of the year	594,079	1,871,847

(v) Investment details of Plan Assets (% allocation)

	As at  March 31, 2017	As at  March 31, 2016
Funds managed by Insurer*	100%	100%

* The funds are managed by LIC and LIC does not provide breakup of plan assets by investment type.

(vi) Actuarial Assumptions

	As at  March 31, 2017	As at  March 31, 2017	As at  March 31, 2016	As at  March 31, 2016
	Employees Gratuity Fund	Compensated absences	Employees Gratuity Fund	Compensated absences
	(Rs.)	(Rs.)	(Rs.)	(Rs.)
Discount Rate (per annum)	7.50%	7.50%	8.00%	8.00%
Rate of Increase in Compensation levels	12%	12%	12%	12%
Expected average remaining working lives of employees (years)	23	23	24	24

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, future salary increases, promotion and other relevant factors on long term basis such as demand and supply in the employment market.               

(vii) Amount recognised in current year and brvious four years

	As at March 31, 2017	As at March 31, 2016	As at March 31, 2015	As at March 31, 2014	As at March 31, 2013
	(Rs.)	(Rs.)	(Rs.)	(Rs.)	(Rs.)
Defined Benefit Obligation	3,461,798	4,042,050	15,671,513	9,505,599	4,780,291
Plan Assets	(594,079)	(1,871,847)	(917,574)	(220,198)	-
Surplus / Deficit	2,867,719	2,170,203	14,753,939	9,285,401	4,780,291

               

	As at  March 31, 2017	As at  March 31, 2016
	(Rs.)	(Rs.)
(viii) Expected Contribution to the Funds in the next year
	1,281,747	-

38. The Company's business activities fall within a single business segment as the Company is engaged in the business of rendering online marketing and information technology consulting & support services largely for the financial services industry, including insurance. Based on nature of services rendered, the risk and returns, internal organization and management structure and the internal performance reporting systems, the management considers that the Company is organized basis a single segment of rendering a bundle of services to the financial services industry, including insurance. Further, the Company earns entire revenue within India only.