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OnMobile Global Limited


# 26, Bannerghatta Road,
J. P. Nagar 3 Phase,
rd

Bangalore - 560 076, India.


Phone : +91 80 41802500
Fax : +91 80 41802810
Email : investors@onmobile.com
Website: www.onmobile.com
OnMobile Global Limited • Annual Report 2007 - 08
01 Not Just Hello...
08 Message from the Chairman
10 Company Snapshot
12 Financial Snapshot
14 The MVAS Ecosystem
15 Board of Directors
16 Corporate Information
17 Our Leadership Team
19 CEO and CFO Certificate
20 Report on Corporate Governance and Shareholder Information

Contents
33 Directors’ Report

44 Management Discussion & Analysis


49 Report of the Auditors
52 Financial Statements
74 Balance Sheet Abstract
75 Report of the Auditors on Consolidated Financial Statements
76 Consolidated Financial Statements
95 Statement Regarding Subsidiary Companies
96 Notice
The mobile is an integral part of our lives today. The
mobile is the only computer most people will ever have,
which allows you to talk, interact, engage in commerce
and do much more. At OnMobile, we enrich, empower
and enhance your life through this mobile interactivity, by
enabling you to use the mobile beyond just talk - Not just
hello...

Enriching lives by making technology really simple to use -


choose the ringtone that identifies you, from over millions
of songs or get ball-by-ball multi-media updates of your
favourite cricket matches.

Empowering lives by ensuring that you are in control -


buy movie tickets, vote for your favourite contestant on a
TV program, get the best shopping deals or get the best
prices for your commodity.

Enhancing lives through innovations, be it caller ringback


tones, searching for and listening to your favourite songs
on demand or safely backing up your precious pictures on
the network.

Such has been the power of this idea that the business
size has become over $ 2 billion dollars, in India, in less
than 8 years.

And this is just the beginning. We are just beginning to


know you. As billions of people are starting to use the
mobile, the opportunities to empower, enrich and
enhance are limitless. As we begin to offer our services in
more and more countries across the world, more lives
will be touched in more ways than one.

Welcome to the business of touching lives, touching


you.
Last ball, Rajasthan Royals need one run to win.

Will Balaji get him? Dhoni has everyone

up! Oh this is so exciting…Balaji comes,

Sohail swings, and hard and….Rajasthan

Royals are the IPL 20-20 champions! This

is sensational stuff! This is awesome!

2
Last

ball
Royals

Now consider this update on your phone.


'Rajasthan Royals won the IPL 20-20 on the last ball. ' How boring!

Ask any cricket enthusiast about the delight of listening to cricket commentary when on the move. You cannot replace
it. And now you can hear this on your mobile. Because your mobile is not just to make calls. The youth today are using
it to date and to chat. Others turn to the mobile for songs, news alerts, cricket updates and more.

And leading this revolution of bringing life to your lives is OnMobile. Ring tone and caller ringback tones are a way of life
now. But that's not all. By combining SMS, IVR with speech recognition and WAP technologies, ensuring multilingual
support and offering services over GSM as well as CDMA, OnMobile ensures a rich and delightful user experience,
making services more relevant and easy to use.

Over a million songs are searched and accessed every day, across the globe. In Trichy, call and you will be greeted in
Tamil. You can also download songs, hear horoscopes, get updates on matches, weather and news in Tamil. Local
language. Local flavour. On your mobile. In Malay in Malaysia, in Mandarin in Singapore.

What began as a fun activity has now become a habit.

OnMobile is enriching millions of lives each moment, every moment.

awesome
win
3
pko me r a gan a pasand aaya
Agar aa

toh mu
jhe jitan
e ke liye
, SMS …
aur
bh e
ya jiye

4
ph 505
ir 262
ph 60
1p
on ar
e
ki j
iye
50
54
64
6
01
.
vote
kijiye dial

sms
karen

And the winner is ..!


You picked your choice. You decided the winner. It's the power of you. This is true
empowerment.

Reality shows rule the roost today in the entertainment world. And mobile phones have become
tools of empowerment. Some of the biggest shows on Indian television - KBC, Indian Idol, Fame
Gurukul, Kya Aap Panchvi Paas Se Tez Hain, Dus Ka Dum and many, many more - are successful
because of you, and because of the mobile. Imagine any of these without the power to vote or
participate!

And this empowerment is not restricted to reality shows. By leveraging Voice, DTMF, WAP and
SMS interaction modes, OnMobile has reinvented the way M-Commerce transactions are done.

A farmer gets prices from the mandi directly on his mobile. A moviegoer finds the availability of
tickets and books them from his phone. Paying utility bills. Booking airline and railway tickets. The
mobile revolution is on. Shopping, commerce, matrimonial services.

On mobile, thanks to OnMobile.

Empowering you.

5
You're beautiful. You're beautiful.

You're beautiful. It's true.

('You're beautiful' by James Blunt)

6
You're
beautiful

Tring Tring is passé.


These days, people call and hope that the other person does not answer. That's because when you call
now, there is lovely music playing or a score update informing you about the latest India-Australia
ODI, instead of the classic tring, tring.

OnMobile's innovations have taken the mobile to another league all together. M-Search is one such
innovation. Search for Jodhaa Akbar. Search for Madonna's Hard Candy. And it's intelligent searching.
You don't need to enter Mission Impossible (MI). MI will get you the result equally efficiently. You
make a spelling mistake and we will ignore it. To facilitate a voice search, we have in-built voice
modulation and filters to recognize different accents and tones and by-pass pronunciation errors. And
you can search across platforms, SMS, Voice or WAP. Across 10 languages. And more.

Our Phone Backup facility allows you to safely copy and store in the network all your personal data
including pictures, contacts, messages and applications stored in the phone.

Apart from having a portal and customer care interface, Phone Backup allows for automatic backup
and can be upgraded with new formats.

OnMobile is enhancing your lives in many such ways.


Expect more from us.

by
James

Blunt
7
Message from the Chairman

To all OnMobile stakeholders and loyal investors,


This is our first annual report as a listed company,
and we welcome our entire base of shareholders,
new investors and stakeholders to the exciting
world of Mobile Value Added Services (MVAS). This
sunrise industry has emerged from a small fledgling
sector back in 2001 when OnMobile started
operations in India, to an industry which is estimated
to exceed Rs. 8,000 crores in 08-09! This is as
exciting as the start of the internet saga in the late
90s, when global companies such as Yahoo, Amazon,
eBay emerged and changed the way in which
consumers worldwide interacted with, and
leveraged the capabilities of the internet.

8
We fully intend to play a similar role daily on high scale operations and
in shaping and leading the MVAS planning the future to maintain the
industry as it gains momentum with growth potential of this industry.
customers in India, and in new
In the past 12 months, we have
consumer markets around the
acquired two French companies,
globe. The mobile phone is fast
which give us access to cutting edge
becoming the interactive channel of
MVAS products and new data
choice for billions of consumers
services platform technology. We
worldwide. Our mission is to
are excited about leveraging our
innovate and launch new services
Indian cost structure and software
which allow consumers to change
skills to build out the full global
the way they live and interact, via
potential of these acquisitions.
mobile phones.
Our zeal to excel in product
Our recent IPO in February 2008
innovation, customer thought
sailed through despite most
leadership, intelligent M&A and
challenging market conditions, and
financial performance remains intact
has provided us a strong platform
after all these years. OurVision 2010
with which we will expand in and
program, to become one of the
outside India, organically and
leaders in the global MVAS industry
inorganically. We are actively
is under implementation.
pursuing both these growth
avenues. The entrepreneurial On behalf of all the shareholders, I
OnMobile team which has taken us would like to thank the entire
from startup to its current position OnMobile team and customers,
is largely intact after all these years, partners, suppliers for their
and has been expanded and unflinching support over these
strengthened to capitalize on our years.
industry leadership position. Our The future trajectory we are
product and engineering teams are planning is challenging and exciting,
hard at work developing new and I wish every one of you joins us
products and services which will be in this journey together!
launched this year, and we intend to
maintain our past innovation track
record and customer satisfaction
experiences. Our customer account
Arvind Rao
teams are scaled up and in place,
working closely with customers Chairman, CEO & co-founder

9
Company Snapshot

The Company • Interactive media solutions such as tele-voting,


Incorporated in the year 2000, OnMobile Global interactive programming, mobile auditioning and
Limited (Company) is a leading provider of Mobile auctions.
Value Added Services and products (MVAS) in India
• Mobile commerce solutions like ticketing (movie
with an expanding international presence. The
and railway ticketing), utility payments and mobile
Company's products are targeted at mobile
marketing services.
subscribers with an increasing focus on capitalising
on the convergence between wireless and wireline • Core business support solutions such as Phone
telecommunications services, media, internet, mobile Backup and Pre-paid and Post-paid bill payments.
marketing and mobile commerce. The Company deploys these applications on its multi-
modal platform, MMP 2500. This platform is a
Product Portfolio
carrier-grade system that effectively integrates
The Company has a broad range of applications that
multiple delivery modes and payments and
are delivered by its customers, who are telecom
subscription options for 2, 2.5 and 3G networks and
operators and media companies, to their end-user
handsets.
subscribers, which enable them to personalise their
mobile phones and thereby enhance user experience. Presence
The Company is headquartered in Bangalore and has
Key Products
offices in Mumbai and Delhi in India. It also maintains
The key products can be broadly categorised as
offices in Dhaka, Jakarta, Kuala Lumpur, London, Paris,
follows:
Singapore and Sydney.
• Network based in-call solutions like Caller
The Company's customers include major
Ringback Tones, Dynamic Voicemail and Missed Call
telecommunications operators in India and in several
Alert Service, etc.
overseas countries. In addition to
• Voice-based multi-modal portal which allows telecommunications operators, the Company also
subscribers to access informational and markets its products and services to media
entertainment content such as music, sports updates, companies, corporates, mobile handset
news, stock and commodity price updates, in multiple manufacturers, content owners and advertisers.
languages using speech-based navigation.
Some of the key performance indicators of the
• On-device client software applications. Company are as follows:

10
Operator ARPU Uplift 8-12 %

Market Reach 390 million, including more than 100 million


in international markets

Total unique users 206 million

Unique users / month 36 million

Calls handled / month 5 billion

RBT users / month 27 million

Phone Backup downloads 22 million

On-Device Portal downloads 4 million

Content usage Via M-Search 200% increase

Milestones in Innovation • "V&D 100, Best MVAS Company


The Company has a track record of 2007, India" by Voice & Data
creating, developing and successfully
• Amongst Deloitte Technology Fast 50
launching a large number of innovative
India, 2007
software products.
• Amongst Deloitte Technology Fast
2000-2003: Platform - Voice Portal 1.0
500 Asia Pacific, 2007
(English), Ring Tones, Infotainment
• Amongst 100 IT Innovators 2007 by
2004: Indian Languages Model
NASSCOM, India
(3 languages), Ringback Tones ('RBT')
Financial Performance
2005: Support for more languages, Live
(consolidated)
Audio Streaming,Ticketing
During 2007-08, the Company recorded
(Railways, Movies)
a net revenue of Rs. 2,618.16 million, an
2006: Pricing innovations: Subscription, increase of 97% over the previous year.
Not Enough Funds; Multimodal Support The earnings after tax of the Company
including SMS,WAP, Multi-language WAP increased from Rs. 337.20 million in
2006-07 to Rs. 603.10 million in 2007-
2007-2008: M-Search (Voice & SMS),
08, an increase of 79%.The diluted
M-Radio, RBT: Press * to copy, Mobile
Earnings Per Share (EPS) increased from
Investor
Rs. 7 per share to Rs. 12, an increase of
Awards and Achievements 71%.
• Best VAS Partner Award 2007 by
Airtel, India

11
Financial Snapshot

Particulars (Rs. in million) 2003-04* 2004-05 2005-06 2006-07 2007-08

Financial Performance
Net Revenue 172.64 409.46 826.17 1,329.72 2,618.16
Earnings before other income,
depreciation, finance charges and tax 69.63 264.37 471.31 609.90 1,048.36
Earnings after Tax 43.08 140.06 247.79 337.20 603.10
Earnings per share (Diluted) (In Rs.)** 1 5 7 7 12

Financial Position
Equity Share Capital 22.87 22.90 22.92 36.54 574.06
Reserves and Surplus 34.97 175.20 422.98 1,990.24 5,535.48
Networth 57.84 198.09 445.91 2,026.78 6,110.96
Gross Block 115.44 181.34 356.01 580.65 1,335.21
Net Block 102.33 123.45 213.01 292.20 795.34
Capital Expenditure 104.68 70.95 169.62 263.61 836.11
Investments 5.08 10.14 26.07 1,018.15 3,193.70
Net Current Assets (41.51) 70.76 230.20 512.47 958.49
Cash and Cash Equivalents 29.25 41.68 41.68 211.61 1,458.84
Total Assets 57.84 198.09 445.91 2,026.78 6,110.96

* 15 months ending March 2004


* * Adjusted for bonus issues in previous years

12
603.10

79%

337.20

06-07 07-08
Earnings After Tax (Rs. in million)

2,618.16

97%

12
1,329.72
71%

06-07 07-08 06-07 07-08


Net Revenue (Rs. in million) Earnings Per Share (Diluted) (In Rs.)

Stock Prices

650 20000

600
18000
550

500
16000
450

400 14000
19-02-08

07-03-08

31-03-08

OnMobile (lhs) BSE Sensex (rhs)

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T h e M VA S E c o s y s t e m
Mobile Value Added Services (MVAS) consists of all services beyond basic phone calls. Some common examples of MVAS include ring tones,
ringback tones, news alerts, stock updates, contests, phone backup, televoting, mobile social networking, mobile advertising,
M-Commerce movie ticketing, bill payment and pre-paid recharge. Typical ecosystem includes:

Content
Owners
Develop and own
content e.g. music,
games, wallpapers etc.

Content
Collect and package different
Aggregators
kinds of content suitable for
mobile platforms like caller

OnMobile's Focus Space


ringback tones, wallpapers,
ring tones, news, etc.

Application
Service
Providers Develop and install
applications that allow easy
access to the content and
content - free applications,
for the end users.

Platform
Providers

Own the delivery


platform and applications.

Provide last mile access -


Mobile allowing the end user to
Operators
download, listen or view
the content on his phone.

Bill the customer and pay the


Content Owner, Aggregator,
Application Service Provider
and Platform Provider.
14
1 Chandramouli Janakiraman 2 Sridar A Iyengar 3 H H Haight 4 Arvind Rao
Executive Director Independent Director Non-Executive Director Chairman & Managing Director

Prof. Jayanth Rama Varma


5 6 Vikram Kirloskar 7 Naresh Malhotra
Independent Director Independent Director Independent Director

1
3
6 7
2
4 5

Board of Directors

15
Corporate Information

Board of Directors Company Secretary


Chairman & Managing Director D Srikiran

Arvind Rao Auditors


Executive Director Deloitte Haskins and Sells

Chandramouli Janakiraman Chartered Accountants,

Non-Executive Director Deloitte Centre, Anchorage II,

Henry Huntly Haight 100/2 Richmond Road,

Independent Directors Bangalore - 560025

Jayanth Rama Varma Registered Office


Sridar A Iyengar No. 26, Bannerghatta Road,

Vikram Kirloskar J. P. Nagar 3 Phase,


rd

Naresh Malhotra Bangalore - 560076

www.onmobile.com
Board Committees
Bankers
Audit Committee
The ICICI Bank Limited
Jayanth Rama Varma Chairman
ICICI Towers, 1 Floor, West Wing
Naresh Malhotra Member
st

#1, Commissariat Road,


Henry Huntly Haight Member
Bangalore - 560025
Investor Grievances Committee
Kotak Mahindra Bank Limited
Vikram Kirloskar Chairman
2 Floor, West Wing,
Naresh Malhotra Member
nd

26 - 27 Raheja Towers,
Chandramouli Janakiraman Member
M. G. Road,
Compensation Committee
Bangalore - 560001
Sridar A Iyengar Chairman
Citibank N.A.
Vikram Kirloskar Member
M. G. Road,
Henry Huntly Haight Member
Bangalore - 560001

16
OnMobile Leadership Team
In addition to the Company’s whole-time directors, Arvind Rao and Sandeep Ganguly
Chandramouli Janakiraman, following are also part of the leadership Head-Private Operators (India). He carries the overall responsibility
team:
for handling the private telecom operator market in India. He
Kiran Anandampillai has over 12 years of experience in telecommunications industry.
Head-Consumer Products. He carries overall responsibility of He received a Bachelor of Engineering degree in Electronics and
defining and delivering products such as music, infotainment, sports Communication from Pune University and a Post Graduate Diploma
and contests. He has over 14 years of experience in software and in Business Administration in Marketing from the Indian Institute of
telecommunication industries. He received Bachelor of Engineering Management, Calcutta.
degree from BMSCE, Bangalore in Telecommunications.
Christy George
Pratapa Bernard Head-Network/In-Call Products. He carries overall responsibility of
Head-Marketing. He carries the overall responsibility for defining and defining and delivering Network/In-call products such as ringback
executing Corporate and Product Marketing functions. He has over tones, missed call alerts, dynamic voice mail system etc. He has over
17 years of experience in the IT and Telecommunications industry. He 15 years of experience in software and telecommunication industries.
received a Bachelor of Engineering degree from Bangalore University He received Bachelor of Technology degree from IIT, Mumbai.
and also holds a Post Graduate Diploma in Marketing Management.
Sandhya Gupta
Sanjay Bhambri Head-Mergers and Acquisitions, Investments and Strategy. She carries
Co-Head, International Business Development. He is currently the overall responsibility for mergers and acquisitions and strategic
in charge of customers in Asia Pacific, Far East, Middle East and investments for the Company including international acquisitions,
Africa. He has over 13 years of experience in Sales and Marketing. minority investments and equity related partnerships and joint
He received his Bachelor of Science degree in Computer Science
ventures. She has over 10 years of experience in financial services
from Kurukshetra University, Kurukshetra and Masters of Business
Management, MS University of Baroda,Vadodara. and capital markets industry. She received a Bachelors of Arts
degree from the University of Rajasthan and a Master of Business
Amit Kumar Dey Administration degree from the University of Mumbai.
Co-Head of International Business Development & Alliances.
Amit played a key role in establishing our business in India, and is Krishna Jha
currently in charge of Sales and Business Development in markets Head-Mobile Data Products and services. He carries the overall
west of India including the Americas and Europe. He is also handling responsibility of managing the Mobile Data Products and services unit
strategic alliances with large global distributors and resellers for of the Company. He has over 10 years of experience in software and
our products and services. He has over 17 years of experience in telecommunication industries. He received a Bachelor of Commerce
the manufacturing and telecommunications industry. He holds a degree from St. Xavier’s Calcutta and he also holds a Post Graduate
Bachelor of Engineering degree from Jadavpur University, Calcutta, Diploma in Business Administration from IBS, Hyderabad.
and a Post Graduate Diploma in Business Administration from the
Rajesh Moorti
Indian Institute of Management, Calcutta.
Chief Financial Officer. He carries the overall responsibility for
Nicolas Frattaroli the finance, legal, secretarial and administration functions of the
Executive director of the Company’s Subsidiary, Vox mobili S.A. Company. He has over 17 years of experience in consumer durables
He carries the overall responsibility for the portfolio of products and non-durables industry. He received a Bachelor of Commerce
mainly in Europe, the Middle East, Africa and the Americas. He has degree from Bangalore University and qualified as a Chartered
over 15 years of experience in the telecommunications industry. He Accountant from The Institute of Chartered Accountants of India
received a Masters of Science degree from the National Institute of and qualified as a Cost Accountant from The Institute of Cost and
Telecommunications. Works Accountants of India.

17
Rajesh M.V Debraj Tripathy
Head-Media Business. He carries the overall responsibility for Head-Mobile Marketing. He carries the overall responsibility
working with media houses in India and driving media-based, telecom for Mobile Marketing including m-advertising. He has over 13
value-added services which generate new revenue streams for media years of experience in the media and advertising industry. He
clients from the mobile sector. He has over 13 years of experience received his Bachelor of Engineering degree in Electronics and
in the media and advertising industry. He received a Bachelor of Telecommunications from Sambalpur University, Orissa and Post
Science degree and a Master of Science degree in Mathematics from Graduate Diploma in Business Administration from Indian Institute
Sathya Sai Institute of Higher Learning, Andhra Pradesh. of Management, Calcutta.

Sidharth Sharma Raghavendra Varma


Head-Public Sector Operators (India). He carries the overall Head-Technology Platform. He carries overall responsibility of
responsibility for serving the mobile value added services needs defining and delivering the MMP2500 platform, on which the
of telecom operators in the public sector. He has over 8 years of Company’s products are built. He has over 15 years of experience
experience in IT and telecommunications industry. He received a in software and telecommunication industries. He received Bachelor
Bachelor of Engineering degree from Maharishi Dayanand University, of Technology degree in Information Technology from Banaras Hindu
Rohtak. University,Varanasi.

18
CEO and CFO Certification
We, Arvind Rao, Chief Executive Officer and Managing Director, and Rajesh Moorti, Chief Financial Officer of OnMobile Global Limited, to the
best of our knowledge and belief, certify that:

1. We have reviewed the balance sheet and profit and loss account (consolidated and unconsolidated), and all its schedules and notes
on accounts, as well as the cash flow statements, and the directors report;

2. Based on our knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the statements made;

3. Based on the information, the financial statements, and other financial information included in this report, present in all material
respects, a true and fair view of the Company’s affairs, the financial condition, results of operations and cash flows of the Company as
of, and for, the periods presented in this report, and are in compliance with the existing accounting standards and / or applicable laws
and regulations;

4. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or
violative of the Company’s code of conduct;

5. We accept responsibility for establishing and maintaining internal controls and we have evaluated the effectiveness of internal control
systems of the Company pertaining to financial reporting. Deficiencies in the design or operation of such internal controls, if any,
of which we are aware, have been disclosed to the auditors and the Audit Committee and steps have been taken to rectify these
deficiencies.

6. We have indicated to the auditors and the Audit Committee:

i. Significant changes in the internal control over financial reporting during the year;

ii. Significant changes in the accounting policies during the year and that the same has been disclosed in the notes to the financial
statements; and

iii. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an
employee having a significant role in the Company’s internal control system over financial reporting.

7. In the event of any materially significant misstatements or omissions, we will return to the Company that part of any bonus or
incentive or equity based compensation, which was inflated on account of such errors, as decided by the audit committee;

8. We affirm that we have not denied any personnel, access to the audit committee of the Company (in respect of matters involving
alleged misconduct) and we have provided protection to ‘whistle blowers’ from unfair termination and other unfair or prejudicial
employment practices; and

9. We further declare that all Board members and senior managerial personnel have affirmed compliance with the code of conduct for
the current year.

Arvind Rao Rajesh Moorti


CEO CFO

Date: April 30, 2008


Place: Bangalore

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Corporate Governance

PHILOSOPHY
It is the intention of the Company to be an acclaimed leader in the practice of Corporate Governance. The Company strives to ensure that
the best practices of Corporate Governance and disclosure requirements are complied with, while ensuring that creation of wealth for
shareholders and protection of interests of stakeholders, clients, suppliers and employees are adhered to with the highest level of integrity,
fairness, accountability and transparency.

BOARD OF DIRECTORS
The OnMobile Board consists of executive and non-executive directors. The non-executive directors consist of eminent professionals from
business, finance and reputed institutions.The Company does not have any nominee director.As per the articles of association of the Company,
the Board can have a maximum of 12 members. Currently the Board has 7 directors, of which the Chairman of the Board is an executive
director.
India Listed All Companies Committee Chairpersons
Name of the director Positions Category
Companies* around the world## Memberships### of Committees###
Chairman and
Arvind Rao Executive – Promoter NIL 9 NIL NIL
Managing Director
Chandramouli
Director Executive – Promoter NIL 6 1 NIL
Janakiraman
H H Haight IV Director Non-Executive NIL 13 1 NIL

Sridar A Iyengar Director Independent 2 9 5 3

Naresh K Malhotra Director Independent 2 11 6 2

Jayanth R Varma Director Independent 1 3 2 2

Vikram S Kirloskar Director Independent 3 12 7 3

* Excluding directorships in OnMobile Global Limited and its subsidiaries


##
Directorships in all companies around the world (listed & unlisted) including OnMobile Global Limited and its subsidiaries
###
Includes memberships/chairmanships of audit committees and investor grievance committees in public companies (Listed and Unlisted)

MEETINGS AND ATTENDANCE The details of the Board of Directors are as below:
Strategic planning and policy formulations are looked after by
Mr. Arvind Rao
the Board. The senior management personnel heading respective
Graduated with a Bachelor of Technology degree from the Indian
business units are responsible for all day-to-day operation related
Institute of Technology, Mumbai, Master of Science degree from
issues, profitability, and productivity issues for their units. The Board
the University of Wisconsin, Madison and a Master of Business
meets at least four times in a year with the intervening period
Administration degree from the Wharton School, the University of
between two Board Meetings of not more than three months. The
Pennsylvania. He has been with OnMobile Systems Inc., our Promoter,
annual calendar of meetings is broadly determined at the beginning
since its inception in 2000. Prior to joining the Company, he was
of each year. Most Board Meetings are well attended as shown
with Schlumberger Wireline Services in Thailand, China and Malaysia,
below. During the year ended March 31, 2008, the Board met five
McKinsey & Company in New York and India, the Chatterjee Group
times on April 20, 2007, July 12, 2007, October 12, 2007, February
in New York and India and Gilbert Global Equity Partners in New
9, 2008 and February 28, 2008. A structured agenda governs the
York. He has over two decades of experience in financial services, IT
meetings. Members of the Board, in consultation with the Chairman
and the telecom industry. He was appointed as Managing Director by
may bring up any matter for consideration of the Board. All items
the Board at their meeting held on July 24, 2006 for a period of five
of major importance in the agenda are backed by comprehensive
years. Mr. Rao is on the Board of the following other Companies:
documentation and background information to enable the Board
to take an informed decision. Agenda papers are circulated well in 1. RiffMobile Private Limited
advance of the Board meeting. 2. Mobile Traffik Private Limited

20
3. Cellphone Entertainment (Mumbai) Private Limited 11. Argnor Wireless Ventures B.V.
4. OnMobile Systems, Inc. 12. SP Industries Inc.
5. OnMobile Singapore Pte Limited
Prof. Jayanth R Varma
6. Vox mobili SA
Graduated with a Bachelor of Commerce degree from Bangalore
7. Vox mobili Inc
University. He did his post-graduation in management from the Indian
8. Phonetize Solutions Private Limited
Institute of Management, Ahmedabad. He also obtained the Fellow of
Mr. Chandramouli Janakiraman the Institute of Management, Ahmedabad and is also a qualified cost
Graduated with a Bachelor of Technology degree from the accountant from Institute of Cost and Works Accountants of India.
National Institute of Technology, Allahabad. He has over 19 years of He has over 20 years of teaching, research and consulting experience
experience in the software industry. He has previously served as in the field of finance. He has previously served as a full-time member
Associate Vice President and Head of the Internet Products Group of SEBI and as Chairman of various committees formed by SEBI and
in Infosys Technologies Limited. In 2000, he left Infosys and co- the Department of Company Affairs. He is a professor of the Indian
founded OnMobile Systems Inc. He was appointed as a director by Institute of Management, Ahmedabad. He has been appointed as an
the shareholders at the AGM held on May 12, 2003. Mr. Mouli Raman independent director by the shareholders of the Company at the
is on the Board of the following other Companies: AGM held on August 17, 2007. Prof. Varma is on the Board of the
following other Companies:
1. Ver se Innovation Private Limited
2. OnMobile Singapore Pte Limited 1. Infosys BPO Limited (formerly Progeon Limited)
3. OnMobile Australia Pty. Ltd. 2. Axis Bank Limited (formerly UTI Bank Limited)
4. PT OnMobile Indonesia
5. Phonetize Solutions Private Limited Mr. Naresh K. Malhotra
Graduated with a Bachelor of Commerce degree from St. Xavier’s
Mr. H.H. Haight IV College, Calcutta University. He qualified as a Chartered Accountant
Graduated with a Bachelor of Science degree from the University of in 1970. He has over 35 years of experience in India and overseas in
California, Berkeley and a Master of Business Administration degree various companies including Imperial Chemical Industries, Unilever,
from Harvard Business School. He has over 20 years of experience Colgate Palmolive, Bukhatir Investments, the U B Group, KPMG
in the leadership and growth of various enterprise companies. He and Amalgamated Bean Coffee Trading Company. He has previously
has previously served as Managing Director in Advent International served as founding partner and managing director of corporate
Corp and Chief executive Officer in Argo Global Capital, LLC. He finance in KPMG in India. He is also an advisor to GIV Management
has been appointed as a non-executive Director by the shareholders Inc., a Washington based Venture Capital Company. He has been
of the Company at the AGM held on August 17, 2007. Mr. Haight is appointed as an independent director by the shareholders of the
on the Board of the following other Companies: Company at the AGM held on August 17, 2007. Mr. Malhotra is on
1. OnMobile Systems, Inc. the Board of the following other Companies:
2. Genelabs Technology Inc. 1. N.M Properties & Consulting Private Limited
3. Maxager Technology Inc. 2. Bluestar Infotech Limited
4. Argo Global Capital, Inc. 3. Amalgamated Bean Coffee Trading Co. Private Limited
5. Argo Holding, LP. 4. Venture Infotek Global Private Limited
6. Argo Global Capital Corp. 5. Tarang Software Technologies Private Limited
7. Telecom Investment Inc. 6. Balan Natural Foods Private Limited
8. Neural Technologies, Inc 7. Royal Orchid Hotels Limited
9. NT3 8. Printo Documents Services Private Limited
10. Chinatron Group Holdings Limited 9. A B Holdings Private Limited

21
10. Venture Infotek Inc.
No. of Board No. of Board Attendance at the
Director
Meetings held Meetings attended Last AGM.
Mr.Vikram S. Kirloskar
Graduated with a Bachelor of Engineering (Mechanical) from the Arvind Rao 5 5 No
Chandramouli
Massachusetts Institute of Technology, Cambridge, USA. He has 5 5 Yes
Janakiraman
over 24 years of experience in the business of manufacturing H H Haight IV 5 4 No
automobiles and auto parts. He has successfully set up a joint
Sridar A Iyengar 5 4 No
venture with Toyota, Japan called Toyota Kirloskar Motor Private
Naresh K Malhotra 5 5 No
Limited, which manufactures automobiles in India. He is a member
Jayanth R Varma 5 4 No
of the National Council of Confederation of Indian Industry. He has
Vikram S Kirloskar 5 3 No
been conferred with the Suvarna Karnataka award by the Karnataka
Government, in recognition of his efforts in expanding and developing Anthony Correa* 5 2 No

industry within the state. He has been appointed as an independent *Anthony Correa resigned effective from August 17, 2007

director by the shareholders of the Company at the AGM held on


Information Placed before the Board
August 17, 2007. Mr. Kirloskar is on the Board of the following other
Apart from the items required to be placed before the Board for
Companies:
its approval, some of the following are also placed for review /
1. Kirloskar Systems Limited information:
2. Kirloskar Brothers Limited
• Annual Operating Plans and Budgets (including Capital
3. Kirloskar Oil Engines Limited
Budgets)
4. Kirloskar Pneumatic Company Limited
• Quarterly performance, including business and financial
5. Kirloskar Theratronics Private Limited
update.
6. Kirloskar Toyoda Textile Machinery Private Limited
• Minutes of the audit and compensation committees
7. Toyota Kirloskar Auto Parts Private Limited
• Information on recruitment and remuneration of senior
8. Toyota Kirloskar Motor Private Limited
officers below the Board level
9. Vikram Geet Investments and Holdings Private Limited
• Demand, prosecution, show cause notices and penalty
10. Toyota Tsucho Insurance Broker India Private Limited
notices which are materially important
Mr. Sridar A. Iyengar • Any issue which involves possible product or public liability
Is a fellow of the Institute of Chartered Accountants, England and claims against the Company or its directors/officers
Wales. He has over 38 years of experience in corporate finance • Status of business risk exposure, its management and related
and accounting. He has previously served as chairman and chief action plans.
executive officer at KPMG, India operations. He is associated with • Proposals pertaining to joint venture and investment/
Bessemer Venture Partners and is an independent director of various acquisition decisions including payments towards intellectual
companies. He has been appointed as an independent director by the property or goodwill
shareholders of the Company at the AGM held on August 17, 2007. • Non-compliance of any regulatory, statutory or listing
Mr. Sridar is on the Board of the following other Companies: requirements
• All proposals requiring strategic decisions
1. Infosys Technologies Limited
• Sale of material nature, of investments, subsidiaries, assets,
2. ICICI Bank Limited
which is not in the normal course of business;
3. Rediff.com India Limited
• Quarterly details of foreign exchange exposures and the
4. Kovair Software Inc.
steps taken by management to limit the risks of adverse
5. Infosys BPO Limited
exchange rate movement, if material;
6. Rediff Holding Inc.
7. Career Launcher Limited

22
Remuneration/Compensation to Directors dated April 20, 2007, approved a sum of (1/6) % of the net profits
The table below shows the amount paid or payable to the Directors of the Company to each of the non-executive directors (including
of the Company for the financial year March 31, 2008: independent directors) or a sum of Rs. 10,00,000/- per non-executive
director which ever is lower. Members of the Company propose to, at
Fixed salary
(includes the forth coming Annual General Meeting of the Company, approve
perquisites Variable Sitting Commiss- Total
Name
and pay fees ion compensation
the payment of remuneration by way of commission to independent
contribution directors for the financial year 2007-08. The Company has paid Rs.
to PF)
1,228,237/- as post tax sitting fees (includes Rs. 228,237/- pertaining
EXECUTIVE DIRECTORS#
to the financial year ended March 31, 2007 paid during the year
Arvind Rao 5,922,725 2,666,324 - - 8,589,049 ended March 31, 2008) to the non-executive directors. No sitting
Chandramouli
3,547,254 1,014,362 - - 4,561,616 fee was paid to any of the executive directors.
Janakiraman

NON-EXECUTIVE DIRECTORS ## The commission and the sitting fee have been arrived at as below:

H H Haight IV - - 280,000 1,000,000 1,280,000 1. Commission payable for five of the non-executive directors
Naresh K
- - 240,000 1,000,000 1,240,000
- Rs. 5,000,000/-
Malhotra

Sridar A Iyengar - - 160,000 1,000,000 1,160,000 2. Sitting fee based on the attendance per Board or committee
meeting - Rs. 20,000/- per meeting
Jayanth R Varma - - 160,000 1,000,000 1,160,000

Vikram S
- - 120,000 1,000,000 1,120,000 PERIOD OF CONTRACT, NOTICE PERIOD AND
Kirloskar

Anthony Correa* - - 40,000 - 40,000


SEVERANCE PAY OF DIRECTORS
*Anthony Correa resigned effective from August 17, 2007
Chairman & Managing Director
Note: #1) The above amounts exclude benefits accrued by the Company in respect of leave encashment and gratuity, as they are
provided by the Company as a whole based on actuarial valuation. The specific period of contract of service for the Chairman & Managing
##
2) The above amounts also exclude the stock compensation cost of Rs. 229,167/- arising out of grant of stock options to the
independent directors. Director is five years effective from July 24, 2006.The notice period is
6 months. The Company is liable to pay a terminal compensation or
REMUNERATION POLICY redundancy payment equivalent to 18 (eighteen) months paid in cash
The Company’s remuneration policy is based on the performance of based on the previous financial year’s compensation plus forgiveness
the individual employee and the success of the Company.Through its of any and all of the outstanding loans from the Company including
compensation program, the Company endeavors to attract, retain, transfer of any vehicles used by employee at the time of termination
develop and motivate a high performance workforce. The Company and any other appropriate statutory compensation applicable to
follows a compensation mix of fixed pay, benefits and performance his employment. The executive directors shall not be considered
based variable pay and sharing of wealth through the Company’s for retirement by rotation as per the Articles of Association of the
stock options. Individual performance pay is determined by business Company.
performance of the Company. The Company pays remuneration by
way of salary, benefits, perquisites and allowances (fixed component) Independent and Non-executive directors
and performance incentives (variable component) to its executive Period of contract and notice pay is not applicable to the independent
directors. Annual increments are decided by the Compensation and non-executive directors. They will retire by rotation. There is
Committee as approved by the Members. no severance pay for any of the non-executive and independent
directors.
Section 309 of the Companies Act, 1956 provides that a director
who is neither in the whole-time employment of the Company nor a STOCK OPTIONS TO THE INDEPENDENT AND
Managing Director may be paid remuneration by way of commission, NON-EXECUTIVE DIRECTORS
if the Company by special resolution authorizes such payment. The following table shows the details of stock options to independent
The Board Members of the Company had vide their resolution and non-executive directors during the year.

23
No. of stock options (after Grant price (after adjusting Company at the AGM held on August 17, 2007. The Company
Name
adjusting for bonus issues) for bonus issues) Secretary acts as secretary to the committee.
Sridar A Iyengar 26,000 228/-
Jayanth R Varma 26,000 228/ The terms of reference of the audit committee include the
Naresh K Malhotra 26,000 228/ following:
Vikram S Kirloskar 26,000 228/
H H Haight IV 26,000 228/
• Overseeing the Company’s financial reporting process and
disclosure of its financial information to ensure that the
The vesting period of each option is over a period of four years from financial statements are true and fair and provide sufficient
the date of their joining and become fully exercisable at the time of information;
vesting. None of the non-executive directors hold any shares in the
Company as on the date of this report. • Recommending to the Board the appointment, re-
appointment, and replacement of the statutory auditor and
MATERIALLY SIGNIFICANT RELATED PARTY the fixation of audit fee.
TRANSACTIONS
• Approval of payments to the statutory auditors for any other
There have been no materially significant related party transactions,
services rendered by them and assess the independence and
monetary transactions or relationships between the Company and
objectivity of the auditors and to ensure that the nature and
directors, management, subsidiary or relatives, except for those
amount of non-audit work does not impair the auditor’s
disclosed in the financial statements for the year ended March 31,
independence and objectivity
2008.
• Establishing and reviewing the scope of the statutory audit
COMMITTEES OF THE BOARD including the observations of the auditors and review of the
For the year ended March 31, 2008 the Board had four committees quarterly, half-yearly and annual financial statements before
– the Audit Committee, the Compensation Committee, the IPO submission to the Board, with particular reference to matters
Committee, the Shareholders and Investors Grievance Committee. required to be included in the Directors Responsibility
The terms of reference of the Board committees are decided by Statement to be included in the Board’s report in terms of
the Board from time to time. Meeting of each Board committee clause 2(AA) of S.217 of the Companies Act, 1956, changes
is convened by the respective committee Chairman. The role and in the accounting policies and practices and reasons for the
composition of these committees, including the number of meetings same, significant adjustments made in the financial statements
held during the financial year and the related attendance are given arising out of audit findings.
below.
• The appointment, removal and terms of remuneration of the
1. Audit Committee internal auditors, discussion and follow up on any important
This committee consists of a minimum of three (3) directors findings with the internal auditors. In case there is a suspected
of whom two thirds including the Chairman are independent case of fraud or irregularity, review of the findings of the
directors. The Chairman of the committee is Jayanth R Varma an internal auditors and reporting the matter to the Board.
independent director. He is an Associate Member of the Institute
• Have post audit discussions with the statutory auditors to
of Cost and Works Accountants of India; he has also obtained a
ascertain any area of concern.
fellowship of the Indian Institute of Management Ahmedabad and
has over 20 years of teaching, research and consulting experience • Regular review of the performance of statutory and internal
in the field of finance. He has previously served as a full-time auditors together with the management.
member of SEBI and as Chairman of various committees formed
• Establishing the scope and frequency of internal audit,
by SEBI and the Department of Company Affairs. He is a professor
reviewing the findings of the internal auditors and ensuring
of the Indian Institute of Management, Ahmedabad. He has been
the adequacy of internal control systems including structure
appointed as an independent director by the shareholders of the

24
of the internal audit department, frequency of internal audit, The Company has instituted internal process and systems to
staffing and seniority of the official heading the department. ensure that the audit committee has access to all the material
Review the functioning of the whistle blower mechanism. information, and reviews on a regular basis the following:

• To look into reasons for substantial defaults in the payment to • Management Discussion and Analysis of financial condition
depositors, debenture holders, shareholders and creditors. and results of operations;

• To look into the matters pertaining to the Director’s • Statement of significant related party transactions (as defined
Responsibility Statement with respect to compliance with by the audit committee), submitted by management;
applicable accounting standards and accounting policies.
• Management certificates on internal controls and compliance
• Compliance with Stock Exchange listing requirements with laws and regulations, including any exceptions to these;
concerning financial statements.
• Management letters / letters of internal control weaknesses
• The Committee shall look into any related party transactions issued by the statutory auditors;
i.e., transactions of the Company of material nature and
• Internal audit reports relating to internal control
disclose such transactions, with promoters or management,
weaknesses;
their subsidiaries or relatives etc., that may have potential
conflict with the interests of Company at large. • The financial statements, in particular the investments, if any
made by the unlisted subsidiary companies.
• Review of management discussion and analysis of financial
condition and results of operations, statements of related Details of Audit Committee Meetings during the financial
party transactions submitted by management, management year
letters/letters of internal control weaknesses issued by the During the financial year ended March 31, 2008, four meetings of the
statutory auditors. audit committee were held as follows:
• To meet periodically as it may deem fit to meet its objectives Committee No. of Members
Sl no. Date
Strength Present.
and to have at least four such meetings in a financial year on
1 April 19, 2007 03 03
a quarterly basis
2 July 11, 2007 03 03
• Obtaining an update on the risk management framework and 3 October 11, 2007 03 03
the manner in which risks are being addressed; 4 February 28, 2008 03 03

• Such other matters as may from time to time are required by Attendance at the Audit Committee Meetings during the financial
any statutory, contractual or other regulatory requirements year
to be attended to by the audit committee.
Director No. of Meetings attended
The audit committee also specifically reviews the un-audited/ Jayanth R Varma 04
Naresh K Malhotra 04
audited quarterly financial results of the Company before these
H H Haight IV 04
are submitted to the Board for approval. Minutes of each audit
committee meeting are placed before the Board for noting 2. Compensation Committee
This committee consists of a minimum of three (3) directors
The powers of the audit committee shall include the power;
of whom two thirds including the Chairman are independent
1. To investigate activity within its terms of reference.
directors.The Chairman of the committee is Sridar A Iyengar. He
2. To seek information from any employees.
is a fellow of the Institute of Chartered Accountants, England and
3. To obtain outside legal or other professional advice.
Wales. He has over 38 years of experience in corporate finance
4. To secure attendance of outsiders with relevant expertise, if
and accounting. He has previously served as chairman and chief
it considers necessary.
executive officer at KPMG, India operations. He is associated

25
with Bessemer Venture Partners and is an independent director No. of Members
Sl no. Date Committee Strength
Present.
of various companies including Infosys Technologies Limited,
1 April 20, 2007 03 03
ICICI Bank Limited and Rediff.com India Limited. He has been 2 July 12, 2007 03 03
appointed as an independent director by the shareholders of the 3 October 12, 2007 03 03
Company at the AGM held on August 17, 2007. The Company 4 February 27, 2008 03 02

Secretary acts as secretary to the committee. Attendance at the Compensation Committee


The terms of reference of the compensation committee include Meetings during the financial year
the following: Director No. of Meetings attended
Sridar A Iyengar 04
1. Annual review of the salary, bonus and other compensation H H Haight IV 04
plans of the CEO, CTO and President of the Company. Vikram S Kirloskar 03

2. Review and approve the salary, bonus and compensation 3. Share Transfer and Investor Grievance Committee
plans for all the executive directors of the Company The Share Transfer and Investor Grievance Committee consists
of a minimum of three (3) directors of whom two thirds including
3. Framing suitable policies and systems to ensure that there is
the Chairman are independent directors. This committee was
no violation, by an employee or Company of any applicable
constituted by our Board at their meeting held on April 20,
laws in India or overseas, including:
2007. This committee was formed to specifically look into the
• The Securities and Exchange Board of India (Insider redressal of shareholder and investor complaints pertaining to
Trading) Regulations, 1992; or allotment or transfer of shares, non-receipt of balance sheet,
• The Securities and Exchange Board of India (Prohibition non-receipt of declared dividends etc. The Share Transfer and
of Fraudulent and Unfair Trade Practices relating to the Investor Grievance Committee consists of Vikram S Kirloskar
Securities market) Regulations, 1995. (Chairman), Naresh K Malhotra and Chandramouli Janakiraman.
The Chairman of the committee is Mr. Vikram S Kirloskar an
4. Administer the implementation and award of stock options independent director. He has over 24 years of experience in the
under the stock option plans of the Company business of manufacturing automobiles and auto parts. He is the
5. Perform such functions as are required to be performed chairman and managing director of Kirloskar Systems Limited,
by the compensation committee under Clause 5 of the vice chairman of Toyota Kirloskar Motor Private Limited and
Securities and Exchange Board of India (Employee Stock Toyota Kirloskar Auto Parts Private Limited. The Company
Option Scheme and Employee Stock Purchase Scheme) Secretary acts as secretary to the committee.
Guidelines, 1999. The terms of reference of the Share Transfer and Investor
6. Recommend to the Board of Directors of the Company Grievance Committee are as follows:
on any other employment incentives as the compensation • To approve and register, transfer and/or transmission of all
committee deems it appropriate in the best interests of the classes of shares;
Company
• To look into the redressal of shareholder and investor
7. Such other matters as may from time to time are required by complaints like non-transfer of shares, non-receipt of balance
any statutory, contractual or other regulatory requirements sheet, non-receipt of declared dividends etc; and
to be attended to by such committee.
• To do all such acts, things or deeds as may be necessary or
Details of Compensation Committee Meetings during the incidental to the exercise of the above powers.
financial year
During the financial year ended March 31, 2008, four meetings of the
compensation committee were held as follows:

26
Details of Shareholder and Investor Grievance Committee Attendance at the IPO Committee Meetings during the
Meetings held during the financial year financial year
Director No. of Meetings attended
During the financial year ended March 31, 2008, one meeting of
Arvind Rao 02
the Shareholder and Investor Grievance Committee was held
Naresh K Malhotra 02
as follows: H H Haight IV 02
No. of Members
Sl no. Date Committee Strength
Present. Disclosures
1 February 27, 2008 03 02
There are no materially significant related party transactions of
Attendance at the Shareholder and Investor Grievance the Company which have potential conflict with the interests of
the Company at large. Details of non-compliance by the Company,
Committee Meetings during the financial year
penalties, strictures imposed on the Company by Stock Exchanges,
Director No. of Meetings attended SEBI or any statutory authority, on any matter related to capital
Vikram S Kirloskar NIL
markets, during the period from February 19, 2008 to March 31,
Naresh K Malhotra 01
2008.
Chandramouli Janakiraman 01

The Company has adopted a Whistle Blower Policy and has


4. IPO Committee
established the necessary mechanism in line with Clause 49 of the
The IPO Committee was constituted by our Board at their
Listing Agreement with the Stock Exchanges, for employees to report
meeting held on April 20, 2007. The committee consists of
concerns about unethical behavior. No person has been denied
Arvind Rao (Chairman), Naresh K Malhotra and H.H. Haight IV.
access to the audit committee. The Company has disclosed all the
The committee was constituted to decide all matters relating to
mandatory requirements under Clause 49 of the Listing Agreement.
the Issue and allotment of shares of the Company in accordance
with the applicable rules and regulations. The powers of the Among the non-mandatory requirements of the Clause 49 of the
committee include, deciding on the timing, pricing and other terms Listing Agreement, the Company has set up compensation committee
of the issue of shares for the Issue, appointment of book running and has a whistle blower policy in place.
lead managers, underwriters, syndicate members, registrars, legal
Details of the Public issue and utilization thereof
advisors and other agencies for the Issue, to settle and execute
During the year, the Company raised funds through an Initial Public
the Draft Red Herring Prospectus, Red Herring Prospectus,
Offering (IPO) of 10,900,545 Equity Shares consisting of fresh issue
Prospectus, syndicate agreement, underwriting agreement,
of 8,613,356 Equity Shares and an “Offer for sale” of 2,287,189 Equity
escrow agreement and all other documents and agreements
shares of OnMobile Systems Inc. through a Book Building process
required for the Issue. The IPO Committee was dissolved on
for cash at a price band of Rs. 425/- to Rs. 450/-Per Equity Share, as
February 28, 2008.
per the Disclosure and Investor Protection Guidelines issued by the
Details of IPO Committee Meetings held during the financial Securities and Exchange Board of India (SEBI). Despite the tough
year and challenging global equity market conditions, the Company’s IPO
During the financial year ended March 31, 2008, two meetings of the was oversubscribed by 10.85 times (17.16 times from the Qualified
IPO Committee were held as follows: Institutional Buyers).

No. of Members Further, the Company received 99.94% applications in the IPO at the
Sl no. Date Committee Strength
Present.
higher end of the price band (Rs. 450 and Cut-off) and only 0.06%
1 July 11, 2007 03 03
of the applications were received at different prices below Rs. 450.
2 October 11, 2007 03 03
However, considering the turbulent capital market conditions the
Company fixed the issue price as Rs. 440/- per Equity Share resulting
in total issue proceeds of Rs. 4,796,239,800 /- out of which Rs.

27
3,789,876,640/- was on account of the fresh issue of Equity Shares Auditors’ Certification on Corporate Governance
and Rs. 1,006,363,160/- was on account of the “Offer for sale”. As required by Clause 49 of the Listing Agreement, the auditor’s
certificate is obtained and provided in the Annual Report.
The details pertaining to the utilization of IPO proceeds are specified
herein below. Post the Public issue the paid up Equity share capital Annual General Meetings
of the Company stands at Rs. 574,061,390/- consisting of 57,406,139 Details of the last three Annual General Meetings of the Company
Equity shares of face value Rs. 10/- each. are given below:
The Company had subsequently listed its Equity Shares on the FINANCIAL
DATE TIME VENUE
Bombay Stock Exchange and National Stock Exchange on February YEAR

19, 2008. The details of the movement in share price are specified 2006-07 August 17, 2007 10.00 AM
No. 26, Bannerghatta Road, JP Nagar, 3rd
Phase, Bangalore – 560 076
else where in this report.
No. 26, Bannerghatta Road, JP Nagar, 3rd
2005-06 July 24, 2006 11.30 AM
The utilization of IPO proceeds is as below: Phase, Bangalore – 560 076
Pavithra Complex, Site No. 1, First Floor, 2nd
Amount in Rs. Million 2004-05 May 26, 2005 11.00 AM Cross, 27th Main, BTM 1st Stage,
Bangalore – 560 068
ACTUAL FUNDS
PROJECTION IN
PARTICULARS UTILISED TILL MARCH
PROSPECTUS
31, 2008 Details of the postal ballot resolutions passed by the Company
Purchase equipment for till the date of this report are given below:
our offices at Bangalore,
1,805 155
Mumbai and Delhi and
FINANCIAL YEAR DATE TIME VENUE*
various customer sites
No. 26, Bannerghatta
Working capital
50 - 2007-08 April 18, 2008 17.00 Hrs Road, JP Nagar, 3rd Phase,
requirements Bangalore – 560 076
Repayment of Loan 350 350 * Results were declared at this time and place.

General Corporate
1,339 14 Results of the Special Resolution passed through Postal Ballot
purposes

The total share issue expenses of Rs. 246 million (net of OnMobile are:
Systems Inc.’s share) has been offset against balance available in No. of Postal No. of % of paid up
Particulars
Ballot forms shares equity capital
securities premium account in the balance sheet.
Number of valid postal ballot forms
283 34,509,256 60.11
received
Management Discussion and Analysis
As required by Clause 49 of the Listing Agreement, the Management Votes in favor of the Resolution 253 34,136,705 59.46

Discussion and Analysis is provided elsewhere in the Annual Report. Votes against the Resolution 30 372,551 0.64

CEO/CFO Certification Number of invalid postal ballot


21 503,644 0.87
forms received
As required by Clause 49 of the listing agreement, the CEO / CFO
certification is provided in the Annual Report. Scrutinizer to the Postal Ballot Resolution – “Mr. S N Mishra”,
Company Secretary

28
General Information for Shareholders Forth coming The Eighth Annual General Meeting (AGM) of
Listing Details The Shares of the Company are Listed on: Annual the Members of OnMobile Global Limited will
• National Stock Exchange of India Limited General be held on Friday, August 01, 2008, at 10.00
Meeting A.M. at Hotel Royal Orchid, 01, Golf Avenue,
(NSE) (AGM) Adjoining KGA Golf course, Airport Road,
Exchange Plaza, 5th Floor, Plot No. C/1, G Bangalore – 560 008
Block, Financial Event Likely Board Meeting
Bandra Kurla Complex, Bandra (E), Mumbai Calendar Schedule
- 400 001. (Tentative and Financial reporting for the quarter July 31, 2008
• Bombay Stock Exchange Limited (BSE) subject to ended June 30, 2008
change) Financial reporting for the quarter October 31, 2008
Phiroze Jeejeebhoy Towers, Dalal Street, ended September 30, 2008
Fort Mumbai – 400 001 Financial reporting for the quarter January 31, 2009
ended December 31, 2008
The listing fees for both the exchanges Financial reporting for the quarter April 30, 2009
have been paid a nd compliance of listing ended March 31, 2009
requirements has been done.
Registrars and Karvy Computershare Private Limited
Stock Code National Stock Exchange of India Limited Share Transfer Karvy House, 21, Avenue – 4
(NSE) – ONMOBILE Agents Plot No. 17 to 24,Vittalrao Nagar, Madhapur,
Bombay Stock Exchange Limited (BSE) – Hyderabad – 500 081
532944 Phone No. 040 -23420818-828
Fax No. 040 – 23420814
Registered OnMobile Global Limited
Compliance Mr. Srikiran D
Office No. 26, Bannerghatta Road, JP Nagar Phase III, Officer Company Secretary
Bangalore – 560076 No. 26, Bannerghatta Road, JP Nagar Phase III,
Phone: 080 – 41802500; Bangalore – 560076
Fax: 080 – 41802810; Phone: 080 – 41802500; 080 -40096000
Fax: 080 – 41802810; 080 -40096009
Other • RPS Green Space, No: 165/5, 1st Main,
Locations Krishna Raju Layout, Depository Currently 86% of the Company’s share capital is
System held in dematerialised form. For any assistance
(In India) J.P Nagar 7th Phase, Bangalore- 560 076. in conversion of the physical shares to demat
• #1004, Floor 10, Dalamal House, Nariman form or vice versa, the investors may approach
Point, Karvy Computershare Private Limited or Mr.
Srikiran D, Compliance Officer, at the addresses
Mumbai - 400 021. mentioned above.
• Sumer plaza, 5th floor, marol maroshi road, Investor Registrars and Share Transfer Agents or to Mr.
Marol, Andheri (E), Mumbai - 400 059. Complaints to Srikiran D, Compliance Officer, at the above
be addressed mentioned addresses.
• 704, Floor 7, Bhikaji Cama Bhawan, Bhikaji to
Cama Place,
New Delhi - 110 066. Email ID of einward.ris@karvy.com or investors@
Grievance onmobile.com
• G-1, Ground Floor, Global Arcade, Redressal
M G Road, Sikandarpur, Gurgaon - 122 002 Division

Distribution of Shareholding
DISTRIBUTION SCHEDULE AS ON MARCH 31, 2008
Rs. No. of Shareholders % Total No. of Shares %
1-500 19211 97.32 1286142 2.24
501 - 1000 154 0.78 109385 0.19
1001 - 2000 105 0.53 156660 0.27
2001 - 3000 49 0.25 123429 0.22
3001 - 4000 23 0.12 80807 0.14
4001 - 5000 14 0.07 65709 0.11
5001 - 10000 45 0.23 345370 0.60
10001 & Above 140 0.71 55238637 96.22
TOTAL 19741 100.00 57406139 100.00

29
Shareholding pattern as on March 31, 2008

No. of shares held in Total shareholding as a


No. of
Category of shareholder Total no. of shares dematerialized percentage of total number of
shareholders
form shares
SHAREHOLDING OF PROMOTER AND PROMOTER GROUP
Indian 5 7,619,950 5,369,767 13.27
Foreign 1 25,403,867 25,403,867 44.25
Total Shareholding of Promoter and
6 33,023,817 30,773,634 57.53
Promoter Group
PUBLIC SHAREHOLDING
Institutions -
Mutual Funds / UTI 13 1,672,649 1,672,649 2.91
Financial Institutions / Banks 2 5,000 5,000 0.01
Foreign Institutional Investors 31 4,921,979 4,921,979 8.57
Non-Institutions -
Bodies Corporate 516 2,214,457 2,214,457 3.86
Individuals - (i) Individual shareholders
holding nominal share capital up to 18605 1,768,763 1,388,850 3.08
Rs.1 lakh.
(ii) Individual shareholders holding
nominal share capital in excess of 80 6,219,465 2,062,232 10.83
Rs.1 lakh
non Resident Indians 307 72,771 72,771 0.13
Clearing Members 172 54,198 54,198 0.09
Foreign Nationals 2 423,722 - 0.74
Foreign Companies 7 7,029,318 6,210,324 12.24
Total Public Shareholding 19735 24,382,322 18,602,460 42.47
Shares held by Custodians and against
which Depository Receipts have been - - - -
issued

GRAND TOTAL 19741 57,406,139 49,376,094 100.00

30
Price movements of the Company’s Shares on the National Stock Exchange and Bombay Stock Exchange for the period from February to
March 2008. The Company was listed on the Stock exchanges on February 19, 2008.

BSE NSE
Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
February 650.00 421.00 652.00 411.00
March 624.00 455.00 622.70 455.00

OnMobile Vs SENSEX
650 20,000

600

18,000
550

500
16,000

450

400 14,000
2/19/2008

3/10/2008

3/30/2008

On Mobile (lhs) BSE Sensex (rhs)

31
Investor Grievances and Share Transfer Details of complaints received and resolved during the period since
The Company has an Investor Grievances committee of the Board the listing date till March 31, 2008 are as below:
to examine and redress shareholders’ and investor complaints.
OUTSTANDING
The status on share transfers is reported to the Board by the
NATURE OF COMPLAINTS RECEIVED RESOLVED AS ON
Company Secretary. Details of complaints received and their
MARCH 31, 2008
nature is provided above. For shares transferred in physical form,
Status of Applications lodged for
the Company gives adequate notice to the seller before registering 126 126 -
Public issue(s)
the transfer of shares. The Company Secretary receives the share
transfers and reports the same to the committee at their meeting. Withdrawal of application (s) 72 72 -
For matters regarding shares transferred in physical form, share Reason for rejection (non-
9 9 -
certificates, dividends, change of address, etc., Shareholders should Allotment)
communicate with Karvy Computershare Private Limited, our non Receipt of Refund Order 374 374 -
registrar and share transfer agent. The address is given in the section
non Receipt of Electronic Credits 202 202 -
on Shareholder information. For shares transferred in electronic
*Post March 31, 2008, 16 complaints (received through SEBI) are unresolved and were being attended to as on April 24, 2008
form, after confirmation of sale / purchase transaction from the
broker, shareholders should approach the depositary participant Dematerialization of Shares
with a request to debit or credit the account for the transaction. The Company’s shares are admitted into both the depositories viz.,
The depository participant will immediately arrange to complete the National Securities Depository Ltd (NSDL) and Central Depository
transaction by updating the account. There is no need for separate Services (India) Limited (CDSL). As of March 31, 2008, 86.01% of the
communication to register the share transfer. Company’s shares are held in electronic form.

CERTIFICATE OF COMPLIANCE FROM AUDITORS AS STIPULATED


UNDER CLAUSE 49 OF THE LISTING AGREEMENT OF THE STOCK EXCHANGES IN INDIA
CERTIFICATE
To the members of OnMobile Global Limited (formerly OnMobile Asia Pacific Private Limited)
We have examined the compliance of conditions of corporate governance by OnMobile Global Limited (formerly OnMobile Asia Pacific
Private Limited) ( the “Company”) for the period from February 19, 2008 (the date of initial listing) to March 31, 2008 as stipulated in Clause
49 of the Listing Agreement of the said company with the relevant Stock Exchanges.
The compliance of conditions of corporate governance is the responsibility of the management. Our examination is limited to procedures and
implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither
an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representation made by the
management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the abovementioned
Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the company.
for Deloitte Haskins & Sells
Chartered Accountants
V. Srikumar
Place: Bangalore Partner
Date: May 2, 2008 M. No.: 84494

32
Directors’ Report
Dear Members, Limited Company by a special resolution of the shareholders
dated August 17, 2008 and subsequently the Company made an
The Directors take pleasure in presenting the 8th Annual Report
Initial Public Offer (IPO) of 10,900,545 Equity Shares consisting
on the business and operations of the Company together with
of fresh issue of 8,613,356 Equity Shares and an “Offer for sale”
the Audited Financial Statements and Accounts for the year ended
of 2,287,189 Equity shares by OnMobile Systems Inc. through a
March 31, 2008.
Book Building process for cash at a price band of Rs. 425/- to
Results of Operations Rs. 450/-Per Equity Share, as per the Disclosure and Investor
FINANCIAL HIGHLIGHTS of OnMobile Global Limited (unconsolidated) Protection Guidelines issued by the Securities and Exchange
For the year 2007-08 (Rs. Millions) (Rs. Millions) Board of India (SEBI). Despite the tough and challenging global
PARTICULARS 2007-08 2006-07
equity market conditions, the Company’s IPO was oversubscribed
Net Revenue 2,307.64 1,303.15
Earning before other income, depreciation,
by 10.85 times (17.16 times from the Qualified Institutional
finance charges and tax 917.12 592.81 Buyers).
Other Income 68.85 42.77
Depreciation 249.18 142.25 The Company received 99.94% applications in the IPO at the
Finance Charges 17.09 0.16 higher end of the price band (Rs. 450 and Cut-off) and only 0.06%
Earnings before tax 719.70 493.17 of the applications were received at different prices below Rs. 450.
Earnings after tax 475.68 330.37 However, considering the turbulent capital market conditions
Equity Share Capital 574.06 36.54
the Company fixed the issue price as Rs. 440/- per Equity Share
Reserves and Surplus 5,364.60 1,985.37
Networth 5,940.07 2,021.91 resulting in total issue proceeds of Rs. 4,796,239,800/- out of
Investments 4,610.75 1,237.25 which Rs. 3,789,876,640/- was on account of the fresh issue of
Gross Block 1,301.56 567.03 Equity Shares and Rs. 1,006,363,160/- was on account of the
Net Block 776.07 281.98 “Offer for sale”.
Net Current Assets 757.97 489.46
Cash and Cash Equivalents 1,436.41 197.37 The details pertaining to the utilization of IPO proceeds till
No. of Equity shares 57,406,139 3,300,207 March 31, 2008 is specified in the notes to accounts section of
Earnings per share (Diluted) (In Rs.) 9 7
the Annual Report. Post the Public issue the paid up Equity share
During 2007-08, the Company recorded net revenue of Rs. 2308 capital of the Company stands at Rs. 574,061,390/- consisting of
million, an increase of 77% over the previous year of Rs 1,303million. 57,406,139 Equity shares of face value Rs. 10/- each.
The Earnings after tax of the Company increased from Rs. 330
The Company had subsequently listed its Equity Shares on
million in 2006-07 to Rs. 476 million in 2007-08, an increase of 44%.
the Bombay Stock Exchange and National Stock Exchange on
The diluted earnings per share (EPS) increased from Rs. 7 per share
February 19, 2008. The details of the movement in share price
to Rs. 9 per share.
are specified in the Corporate Governance section of the Annual
Liquidity Report.
The Company ensures that it has adequate cash to meet its strategic
B. Conversion and Redemption of Preference Shares
objectives. As on March 31, 2008 the Company had liquid assets
During the year the Company approved in the Annual General
including investments in, money market mutual funds of Rs 4,584
Meeting held on August 17, 2007 the conversion of 353,629
million as compared to Rs. 1,216 million for the previous year-ending
Preference Shares held by Deustche Bank AG, Kings Road
March 31, 2007. The Company has invested these funds with banks,
Investments (Mauritius) Limited, Jade Dragon Investments
liquid mutual funds and fixed maturity plans.
(Mauritius) Ltd. (referred to as the (“Investors”)) into 353,629
Changes to the Share Capital Equity Shares of the Company in the ratio of one Equity Share
A. Initial Public Offer (IPO) for every Preference Share held by the Investors.
During the year the Company was converted into a Public During the year under review, the Company successfully

33
completed the amalgamation with ITfinity Solutions Private added services (MVAS), in particular, has witnessed a tremendous
Limited, as per the scheme of amalgamation and arrangement growth over the past few years and the industry associations /
approved by the High Courts of Karnataka by order dated March independent research organization indicators suggest a significant
27, 2007 and the High Court of Mumbai by order dated April 21, growth in the coming years. Accordingly, keeping in view the
2007. The scheme was effective from May 14, 2007 which was Company’s growth plans and the need to finance the growth
the last date when the copies of the orders of the High Courts plans through internal accruals, the directors do not recommend
of Mumbai and Karnataka sanctioning the scheme were filed any dividend for the year ended March 31, 2008.
with the Registrar of Companies at Mumbai and Karnataka.
The register of members and the share transfer books will
Accordingly as part of the amalgamation process, the Company remain closed from July 29, 2008 to August 01, 2008, both days
had approved the conversion of 12,676 optionally convertible inclusive. The Annual General Meeting of the Company has been
preference shares held by the promoters of ITfinity Solutions scheduled for August 01, 2008.
Private Limited into 12,676 Equity Shares and further approved
B. Transfer to Reserves
the redemption of 9,098 optionally convertible preference shares
We propose to retain Rs. 1201.06 million in the Profit and Loss
held by the Promoters of ITfinity Solutions Private Limited at a
Account.
price of Rs. 3632/- per Share.
Subsidiaries
C. Bonus Issue
As on March 31, 2008, the Company has the following Subsidiaries:
During the year under review the Company approved in the
Annual General Meeting held on August 17, 2007 the issue of 1. OnMobile Australia Pty. Ltd.
Bonus shares to its Equity Shareholders in the ratio of twelve (12) 2. OnMobile Singapore Pte. Ltd.
Equity Shares for every one (1) Equity Share held by capitalising 3. PT. OnMobile Indonesia
the share premium account. 4. Vox mobili S.A.
5. Vox mobili Inc.
D. Acquisition of Vox mobili S A
6. Ver se Innovation Private Limited
On September 10, 2007, the Company completed the acquisition
7. Phonetize Solutions Private Limited
of the entire issued share capital of Vox mobili S.A. (“Vox mobili”),
a provider of telecommunications related value added services As per Section 212 of the Companies Act, 1956, the Company is
focused on global management of personal and group data such required to attach the directors’ report, balance sheet, and profit
as personal data management, wireless synchronization and and loss account of its subsidiaries. The Company had applied to the
embedded client solutions to telecommunications operators, Government of India seeking exemption from such an attachment as
Internet Service Providers (“ISPs”) and cable operators. the Company presents the audited consolidated financial statements
in the Annual Report. The Government of India has granted
As a part of the purchase consideration payable to Vox mobili
exemption from complying with Section 212. Accordingly, the annual
SA, the Company had issued 423,722 new equity shares (after
report does not contain the financial statements of these subsidiaries.
adjusting for the bonus issue made by the Company) to the
The Company will make available the audited annual accounts and
founding shareholders of Vox mobili (the “Founders”).
related information of the subsidiary companies, where applicable,
The paid up Equity Share Capital of the Company post the Bonus upon request by any investor of the Company. These documents will
issue and the issue of shares to Vox mobili SA increased to Rs. also be made available for inspection during business hours at our
487,927,830/- consisting of 48,792,783 Equity Shares. registered office.

Appropriations Considering the decision to optimize tax benefits, the Company’s


A. Dividend Australian business is being changed from a subsidiary model to a
The telecommunication industry, in general, and mobile value branch model. Accordingly, the Australian subsidiary is in the process

34
of winding up. A Liquidator has been appointed by the subsidiary Phone Backup:
and the same would be wound up as per the regulations prescribed Mobile phones have evolved to become a multi-functional device and
in Australia. now hold lots of precious customer data. In the event of a loss of
the phone, all important data including contacts, messages, pictures
Statement regarding subsidiary companies under Section 212 of
and other data would be lost.The Company’s Phone Backup solution,
the Companies Act, 1956 is included in the Annual Report for this
enabled users to save a backup of their precious data on the network,
Financial Year 2007-2008.
which could be quickly retrieved either in case of a loss of phone or
New Products and Services if the user changed their handset.
The dynamic nature of the market demands constant innovation.
Successful mobile services demand innovative solutions coupled
On-device Portal:
The Company’s significantly improved its flagship device product
with superior user experience. The Company launched various new
2GO, an On-device Portal. The product now supports Windows
products and several enhancements to current products, some of
Smart Phone 6.0 and Blackberry devices, including a large majority
which are outlined below.
of Symbian and J2ME devices
One-Touch RBT:
This pioneering innovation in Caller Ringback Tones was the first of
Other Business Highlights of this year - Ringback tones(RBT)
its kind in the world. It enabled consumers to select and change their for Airtel:
song preferences with the click of a single key making the service RBT contributes significantly to Airtel’s MVAS turnover.The Company
viral.With this, the Ringback Tones penetration hit an all-time high of received an order from Airtel to replace their existing RBT systems
30%, one of the highest in the industry. in one of their regions.This will surely drive the revenues and visibility
of the Company in the Indian MVAS market in FY 2008-09.
Mobile Radio:
M-Radio V3 provides radio on the go to a mobile customer, anywhere, New customers:
anytime. The product is now powered by M-Search, repeat user With the addition of the Aircel and Virgin accounts, the Company’s
intelligence, channel intelligence and Hermes music alerts. In the coverage of large Indian telecom operators (more than 5 million
current deployments M-Radio has delivered impressive results with customers) is now complete as on date.
service usage four times higher.
Continued growth in Media business:
M-Search On the Media Services front, some of the new clients signed for the
The Company’s consumer research indicated that existing options year were Dainik Bhaskar, UTV,Turner Networks, Jaya TV, Network18,
for content discovery were cumbersome and complex for the users. NDTV Imagine and Radio One.
Users typically knew the music that they wanted, but simply could Televoting, Contests and Talent Hunt Applications powered popular
not locate it within the Telecom Operator’s content catalogue. TV programmes like Indian Idol, Voice of India, Chotte Ustaad, Nach
M-Search, a mobile search solution, enabled users to directly request Baliye and Mission Ustaad.
the desired content, which was then instantly located and delivered
to the user’s phone. New Locations
Last year saw the Company expanding internationally more than ever
Subscription Services Gateway before. The Company had significant new deployments in Indonesia,
As mobile services evolved, the pay-per-use model did not prove to be Malaysia and Bangladesh. As part of the Company’s global expansion,
appropriate for all and Subscription based services were introduced. the Company now also has branch offices in Malaysia, Bangladesh,
To suit the customer’s wallet, the Company’s Subscription Services UK and a subsidiary in Indonesia.
Gateway supported monthly, daily and event based charging options.
This is now offered as standard across all of the deployments.

35
Material Changes for the period between End of the Improvement, Fact-Based Decision-Making and Mutually Beneficial
Financial Year and the Date of the Report Supplier Relationships.
The Company has signed a Share Purchase Agreement in May 2008 The Company uses an ISO framework for Information Security and
to acquire the entire issued share capital of Telisma S.A. (“Telisma”), aspires to be ISO 27001 compliant in the near future.The Company’s
a French Company set up in the year 2000 with headquarters in various products/services are subjected to periodic and rigorous
Lannion, France.Telisma S.A. is specialized in the supply of advice and assessments by reputed external assessors.
services in the communication, telematic, and interactive services
fields and provides a wide range of Software services, in particular The Company has embarked on various strategic improvement
voice recognition software services, for telecom companies. Further, initiatives last year:
Telisma has its software solutions focused for major mobile and • Information Security Governance
landline operators. Telisma has its commercial activities in France. • Risk Assessment
• Asset Management
The Company’s Board has approved the acquisition of Telisma for • Business Continuity Management
a maximum consideration of € 12,664,271 (Euros Twelve Millions • Human Resource Security
Six Hundred Sixty Four Thousand Two Hundred and Seventy Only), • Usage of ‘Scrum’, an Agile Software Development Methodology
equivalent to INR 843,721,842 (Rupees eighty four crores thirty for the Company’s software development lifecycle
seven lakhs twenty one thousand eight hundred and forty two only) • A suite of workflow tools to ensure timely delivery of increasingly
consisting of € 11,664,271 (Euros Eleven Millions Six Hundred Sixty large number of deliverables and to provide enhanced operational
Four Thousand Two Hundred and Seventy One) equivalent to INR metrics
777,099,622 (Rupees seventy seven crore seventy lakhs ninety nine
thousand six hundred and twenty two only) to be paid in cash and About ISO/IEC 27001:
€ 1,000,000 (Euros One Million) equivalent to INR 66,622,220 The ISO/IEC 27001 is an information security management system
(Rupees six crores sixty six lakhs and twenty two thousand two (ISMS) standard published by the International Organization for
hundred and twenty only) to be paid as an earn out adjustment of Standardization and the International Electro Technical Commission.
Equity shares of the Company based on the financial performance ISO/IEC 27001 provides an ISMS model for adequate and
of Telisma as for the financial year ended December 31, 2008 as per proportionate security controls to protect information assets
the terms of the draft share purchase agreement between OnMobile and give confidence to interested parties. This sets the standard
Global Limited (“OnMobile” or “the Company”) and the respective for handling the Confidentiality, Integrity and Availability of an
shareholders of Telisma SA (“Telisma”), the founders’ share purchase Information Asset.
agreement and in the presence of Telisma, and all other such related
agreements (hereinafter referred to as the “Agreement(s)”), as per About Agile Software Development:
terms and conditions mentioned in the said Agreement(s) placed Agile software development is a conceptual framework for software
before the Board. engineering that promotes development iterations throughout
the life-cycle of the project. This approach helps to minimize risk
Additionally, the Company’s Board has approved to pay € 700,000
associated with developing software in short amounts of time.
(Euros Seven Hundred Thousand only) equivalent to INR 46,635,540
(Rupees four crores sixty six lakhs thirty five thousand five hundred AWARDS AND RECOGNITION/BRANDING
and forty only) in the form of stock options of the Company payable Customer Recognition
to the founders and some employees of Telisma. Bharti Airtel recognized the Company as the best MVAS partner for
the year 2007. It is an apt recognition of the Company’s dedication
QUALITY
and focus for delivering quality service to its customers. It also
The Company is committed to the eight guiding Quality Management
sets a high benchmark for the Company to continue its existing
principles of Customer Focus, Leadership, People Involvement,
performance.
Process Approach, System Approach to Management, Continual

36
Industry Recognition spans the whole spectrum of hiring from campuses to bringing on
Voice & Data recognized the Company as India’s Best MVAS Company Board employees with proven capability and experience.This ensures
and accorded the V&D100 award for 2007. The V&D100 Awards is that the Company has a judicious mix of experience in its employee
popularly recognized by the Indian communications industry as its base.
most reliable chronicle.

The Company has also been recognized as one of the 50th fastest
growing technology companies in India by Deloitte Touche Tohmatsu
and received ‘Technology Fast 50 India 2007’ award. The awards
recognize the most successful Indian technology companies, and
it is a significant achievement to be a part of this elite group. This
nomination is one more indicator of the Company’s growth during
the past year and the Company continues to grow strongly to
As the Company continues to scale on the people front, it has focused
become India’s largest Mobile Value Added Services (MVAS) Provider
on enhancing the learning and development opportunities offered to
Company.
OnMobilians. In the year 2007-08 the Company has offered 1383
The Deloitte Technology Fast 50 India 2007 Program, conducted by
trainee days of domain, soft skill and leadership training programs.
Deloitte Touche Tohmatsu Asia Pacific, identifies the top 50 fastest
growing technology companies in India based on their percentage The retention metrics for the year 2007-08 have been extremely
revenue growth over the last three financial years. It is part of a encouraging and positive. The annualized attrition % for confirmed
global program run in parallel with the other regional programs
FTE for the year 2007-08 is 10.8%. The Company has seen a dip in
in EMEA (Europe, the Middle East and Africa), North America and
annualized attrition % age from 15.9% in 2006-07.
Asia Pacific. It includes all areas of technology from Internet to life
sciences, from computers to semiconductors. It covers both public
and private companies.

INFRASTRUCTURE
As of March 31, 2008, the Company has obtained on lease, office
spaces at Bangalore and Mumbai constituting an area of 138,245
square feet and 15,705 square feet respectively. Further, the
Company has purchased an office space in Mumbai constituting an
area of 7,985 square feet. Apart from this the Company has various
offices at Delhi, Australia, Malaysia, Bangladesh and UK and a few RESEARCH AND DEVELOPMENT/EDUCATION AND
guest houses on lease for the employees of the Company at Mumbai KNOW-HOW INITIATIVES
and Bangalore. While India has been the main market, the Company is fast expanding
HUMAN RESOURCE MANAGEMENT in to many other developing and developed markets.
The Human Resource Portrait of the Company is an interesting The Research and development (R&D) efforts are focused on
mix of knowledge, skills, competence and orientation. The key to • Reaching out to as many users as possible across multiple
the Company’s hiring and retention strategy is the appreciation of channels, given the different capabilities of handsets and
diverse mix of talent needed to execute the Company’s business. networks;
For the year 2007-08 the Company has added 324 (Full Time • Making the services affordable, particularly given the low-
Employee (FTE) + Contract) employees (as on March 31, 2007 the ARPU and challenging recharge patterns, in the developing
employee strength (FTE + Contract) was 519).The Company’s hiring markets;

37
• Serving a totally-new set of subscribers, who have joined the i. in the preparation of the annual accounts, the applicable
mobile network; accounting standards have been followed along with proper
• Making the services easy to use, with Localization, Easier explanation relating to material departures;
Content Discovery and Personalization.
ii. they have selected and applied consistently and made
Corporate Governance judgments and estimates that are reasonable and prudent
The Company is committed to maintain the highest standards of so as to give a true and fair view of the state of affairs of the
corporate governance. The Company meets the standards and Company as at the end of the financial year and of the profit
guidelines set by the Securities and Exchange Board of India on of the Company for that period;
Corporate Governance and has implemented all the stipulations iii. they have taken proper and sufficient care for the maintenance
prescribed. A detailed report on Corporate Governance pursuant of adequate accounting records in accordance with the
to the requirements of Clause 49 of the Listing Agreement forms provisions of the Companies Act, 1956 and for safeguarding
part of the Annual Report. A certificate from the auditors of the the assets of the Company and for preventing and detecting
Company, Deloitte Haskins & Sells, Chartered Accountants, fraud and other irregularities;
confirming compliance of conditions of corporate governance as
stipulated under the aforesaid Clause 49 is annexed to the Report iv. they have prepared the annual accounts on a going concern
on Corporate Governance section of the Annual Report. basis.

Management Discussion and Analysis Report PARTICULARS OF EMPLOYEES


In accordance with the Listing Agreements, the Management The information as are required to be provided in terms of section
Discussion and Analysis Report is presented in the separate section 217(2A) of the Companies Act, 1956 read with the Companies
forming part of the Annual Report. (Particulars of Employees) Rules, 1975, have been included as an
annexure to this report.
Directors
Mr. H H Haight IV, Director retires by rotation and being eligible CONSERVATION OF ENERGY AND TECHNOLGY
offers himself for re-appointment at the forthcoming Annual General ABSORPTION
Meeting of the Company. The Company, being a service provider organization, most of the
information as required under Section 217(1)(e) of the Companies
Since the last Directors’ Report, Mr. Anthony Correa has resigned
Act, 1956, read with the Companies (Disclosure of particulars in the
from the Board on August 17, 2007.
report of the Board of Directors) Rules, 1988, as amended is not
Brief resume of the director offering for re-appointment is included applicable.
in the notice for the Annual General Meeting.
FIXED DEPOSITS
Auditors In terms of the provision of Section 58A of the Companies Act, 1956
The statutory auditors of the Company, M/s. Deloitte Haskins & read with the Companies (Acceptance of Deposits Rules) 1975, the
Sells, Chartered Accountants, who retire as statutory auditors Company has not accepted any fixed deposits during the year under
of the Company at the conclusion of the forthcoming Annual review.
General Meeting, offer themselves for re-appointment and have also
EMPLOYEE STOCK OPTION PLAN (ESOP)
confirmed that their appointment, if made, will be within the limits
The Company offers six ESOP Schemes i.e. the Employee Stock
under Section 224(1B) of the Companies Act, 1956.
Option Plan –I, 2003, Employee Stock Option Plan –II, 2003, Employee
RESPONSIBILITY STATEMENT OF THE BOARD OF Stock Option Plan –III, 2006, Employee Stock Option Plan –I, 2007,
DIRECTORS Employee Stock Option Plan –II, 2007 and Employee Stock Option
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Plan –I, 2008 to its employees. All the schemes endeavor to provide
directors to the best of their knowledge and belief confirm that: incentives and retain employees who contribute to the growth of the

38
Company. Disclosure in compliance with the Securities and Exchange Sidharth Sharma
Sanjay Bhambri
Board of India (Employee Stock Option Scheme and Employee Stock Sandeep Ganguly
Purchase Scheme Guidelines, 1999), as amended, is as below: ** Employees receiving 5% or more of the total number of options granted during the year
Rajesh Moorti
Rajesh MV
ESOP PLAN I - 2003 Sidharth Sharma
Description Details Sumit Sardana
Biswajit Nandi
Total number of options under the Sandeep Ganguly
plan (each option represents one share
13,338,000
after adjusting for bonus issues of the
Company on August 18, 2007)
ESOP PLAN II - 2003
The Pricing Formula Rs.10 Description Details
Variation in terms There was a clarificatory amendment to the Plan Total number of options under the
provided in July 24, 2006 by the Shareholders plan (each option represents one share
1,482,000
of the Company such that the Vesting Schedule after adjusting for bonus issues of the
under the Plan shall be as follows: Company on August 18, 2007)
(i) of all the Stock Options granted to the The Pricing Formula Rs.10
Optionee for the first time under the Plan(s), Variation in terms There was a clarificatory amendment to the Plan
25% of such Options shall be deemed to vest at provided in July 24, 2006 by the Shareholders
the end of twelve (12) months from the date of of the Company such that the Vesting Schedule
employment or engagement of the Optionee and under the Plan shall be as follows:
remaining 75% of such Options shall be deemed (i) of all the Stock Options granted to the
to vest from the 13th month from the date of Optionee for the first time under the Plan(s),
employment or engagement of the Optionee at 25% of such Options shall be deemed to vest at
a rate of 1/36th per month for the next thirty the end of twelve (12) months from the date of
six (36) months of the Vesting Period; AND (ii) of employment or engagement of the Optionee and
all the Stock Options granted to the Optionee, remaining 75% of such Options shall be deemed
other than a Founder Director of the Company, to vest from the 13th month from the date of
to whom Options have already been granted once employment or engagement of the Optionee at
or more than once under the Plan, 25% of such a rate of 1/36th per month for the next thirty
Options shall be deemed to vest at the end of six (36) months of the Vesting Period; AND (ii) of
twelve (12) months from the date of such Grant all the Stock Options granted to the Optionee,
and the remaining 75% of such Options shall be other than a Founder Director of the Company,
deemed to vest from the 13th month from the to whom Options have already been granted once
date of such Grant at a rate of 1/36th per month or more than once under the Plan, 25% of such
for the next thirty six (36) months of the Vesting Options shall be deemed to vest at the end of
Period. twelve (12) months from the date of such Grant
Options granted during the year and the remaining 75% of such Options shall be
(each option represents one share deemed to vest from the 13th month from the
427,999
after adjusting for bonus issues of the date of such Grant at a rate of 1/36th per month
Company on August 18, 2007) for the next thirty six (36) months of the Vesting
Weighted average price per option Period.
Rs.10
granted during the year Options granted during the year Nil
Options vested (as of March 31, 2008) 12,131,873 Weighted average price per option
Rs.10
Options exercised during the year 301,444 granted during the year
Money raised on exercise of options: 231,880 Options vested (as of March 31, 2008) Nil
Options forfeited during the year 81,939 Options exercised during the year Nil
Options lapsed during the year Nil Money raised on exercise of options Nil
Total number of options in force at Options forfeited during the year Nil
the end of the year (including unvested 1,736,085 Options lapsed during the year Nil
Options) Total number of options in force at
Grant to senior management and the end of the year (including unvested Nil
185,510
independent directors during the year* Options)
Employees receiving 5% or more of the Grant to senior management and
Nil
total number of options granted during 230,685 independent directors during the year
the year** Employees receiving 5% or more of the
Diluted EPS pursuant to issue of shares total number of options granted during Nil
on exercise of options calculated in 9 the year
accordance with AS 20 Diluted EPS pursuant to issue of shares
on exercise of options calculated in 9
*Grant to senior management and independent directors during the year accordance with AS 20
Rajesh Moorti
Rajesh MV

39
ESOP PLAN III - 2006 Options lapsed during the year Nil
Description Details Total number of options in force at
the end of the year (including unvested 403,330
Total number of options under the
Options)
plan (each option represents one share
800,371 Grant to senior management and
after adjusting for bonus issues of the Nil
Company on August 18, 2007) independent directors during the year
The Pricing Formula Fair Market Value shall be a percentage of the Employees receiving 5% or more of the
fair value of the shares, as determined by the total number of options granted during Nil
Compensation Committee from time to time. the year
Notwithstanding, anything contained above, the Diluted EPS pursuant to issue of shares
Exercise Price shall not be less than the nominal on exercise of options calculated in 9
value of the shares. accordance with AS 20
Variation in terms Nil
Options granted during the year ESOP Plan II - 2007
Total number of options under the
Description Details
plan (each option represents one share 774,371
after adjusting for bonus issues of the Total number of options under the
Company on August 18, 2007) plan (each option represents one share
74,360
Weighted average price per option after adjusting for bonus issues of the
Rs.252.95
granted during the year Company on August 18, 2007)
Options vested (as of March 31, 2008) 4,385 Fair Market Value shall be a percentage of the
Options exercised during the year Nil fair value of the shares, as determined by the
Money raised on exercise of options Nil Compensation Committee from time to time.
The Pricing Formula
Options forfeited during the year 42,523 Notwithstanding, anything contained above, the
Options lapsed during the year Nil Exercise Price shall not be less than the nominal
Total number of options in force at value of the shares.
the end of the year (including unvested 731,848 Variation in terms Nil
Options) Options granted during the year
Grant to senior management and Total number of options under the
150,800
independent directors during the year* plan (each option represents one share 74,360
Employees receiving 5% or more of the after adjusting for bonus issues of the
total number of options granted during Nil
Company on August 18, 2007)
the year
Weighted average price per option
Diluted EPS pursuant to issue of shares Rs. 298.54
on exercise of options calculated in 9 granted during the year
accordance with AS 20 Options vested (as of March 31, 2008) Nil
Options exercised during the year Nil
*Grant to senior management and independent directors during the year Money raised on exercise of options Nil
Sridar A Iyengar
Prof Jayanth R Varma Options forfeited during the year Nil
Naresh Malhotra Options lapsed during the year Nil
Vikram Kirloskar Total number of options in force at
HH Haight
Sanjay Bhambri the end of the year (including unvested 74,360
Options)
ESOP PLAN I - 2007 Grant to senior management and
Nil
independent directors during the year
Description Details
Total number of options under the plan Employees receiving 5% or more of the
(each option represents one share of 975,000 total number of options granted during Nil
the Company) the year
The Pricing Formula Fair Market Value shall be a percentage of the Diluted EPS pursuant to issue of shares
fair value of the shares, as determined by the on exercise of options calculated in 9
Compensation Committee from time to time. accordance with AS 20
Notwithstanding, anything contained above, the
Exercise Price shall not be less than the nominal
value of the shares. FOREIGN EXCHANGE EARNINGS AND OUTGO
Variation in terms Nil
Rs. Million
Options granted during the year 404,370
Description Year ended
Weighted average price per option
Rs. 453.04
granted during the year March 31, 2008 March 31,2007
Options vested (as of March 31, 2008) Nil Foreign exchange earnings 95.26 27.30
Options exercised during the year Nil
Foreign exchange outgo 400.05 51.00
Money raised on exercise of options Nil
Options forfeited during the year 1040

40
ACKNOWLEDGMENTS the Department of Telecommunications, the Reserve Bank of India,
The Board of Directors takes this opportunity to express their Ministry of Company Affairs, Securities and Exchange Board of India
appreciation to the customers, shareholders, investors, vendors, and look forward to their support in all future endeavors.
and bankers who have supported the Company during the year. The
For and on behalf of the Board of directors
directors place on record their appreciation to the OnMobilians at
all levels for their contribution to the Company.The Directors would
Arvind Rao Chandramouli Janakiraman
like to make a special mention of the support extended by the various
Chairman and Managing Director Director
departments of the Government of India, particularly the Software
Technology Parks, the Service tax and Income tax Departments, Place: Bangalore
the Customs and Excise departments, the Ministry of Commerce, Date: June 23, 2008

41
ANNEXURE TO THE DIRECTORS REPORT
[Information as per section 217(2A) of the companies act, 1956, read with the companies (Particulars of employees) rules 1975, and forming part of the directors' report for the
year ended March 31, 2008].

Employee Name Designation Remuneration Nature of Qualification Experience Joining Age Previous Designation
Duties of Date Employment
Employee
Christy George Director - Engineering 3,541,032 Engineering BTech 8 11-Oct-00 37 IT Solutions Project Manager
Amit Kumar Co-Head International 5,252,417 Sales & BE,MBM 16 06-Nov-00 40 Ericsson India Private Marketing Manager
Dey Business Marketing Limited
Kiran Director - Engineering 2,927,084 Engineering BE 7 01-Mar-02 36 Infosys Technologies Project Manager
Anandampillai Limited
Parag Agrawal Client Delivery 3,060,709 Client Delivery BTech 6 01-Aug-02 33 Infosys Technologies Project Manager
Manager Unit Limited
Satish Product Manager 2,857,611 Client Delivery BTech 6 01-Aug-02 33 OnMobile Systems Senior Software
Gopalkrishnan Unit INC Engineer
Chandramouli Director and Chief 4,375,008 General BTech 20 01-Aug-02 40 Infosys Technologies Associate Vice President
Janakiraman Technology Officer Management Limited and Head - Internet
Products Group
Rupayan Business Development 2,563,362 Sales & BCom,PGDBM, 6 04-Nov-02 34 Intercept Consulting Regional Manager

42
Chatterjee Manager Marketing Pvt Ltd
Satish N Head - Quality 2,513,686 Sales & BTech 3 13-Mar-03 35 UCCA Test Engineer
Assurance Marketing
Raghavendra Director - Engineering 2,863,207 Engineering BTech 12 01-Mar-04 37 Infosys Technologies Senior Technical
Varma Ltd architect
Tanmay Kumar Product Manager 2,667,017 Engineering BTech 9 27-Apr-04 34 Infosys Technologies Technical architect
Mohapatra Ltd
Sandhya Gupta Head - M&A 3,950,750 General BA,MA,MBA 14 01-Nov-04 39 Galaxy Vice President-
Investments & Strategy Management Entertainment Investments
Limited
Rajesh M V Head - Media Business 2,842,880 Sales & BSc,Msc 14 16-Nov-04 40 Group M Private Planning Director
Marketing Limited
Sidharth Sharma Head - India Public 3,015,860 Sales & BE 3 04-Jan-05 29 ZTE Corporation General Manager Sales
Sector Operators Marketing
Sandeep Head - India Private 3,372,432 Sales & PGDBA 15 01-Feb-05 37 Hughes Escorts Senior Manager
Ganguly Operators Marketing Communication Ltd
Sumit Sardana Key Account Manager 2,439,279 Sales & BE,PGPM 6 16-Jan-06 33 Hughes Escorts National Segment
Marketing Communication Ltd manager
Employee Name Designation Remuneration Nature of Qualification Experience Joining Age Previous Designation
Duties of Date Employment
Employee
Rajesh Moorti Chief Financial Officer 3,981,258 Finance & BCom,ACA,ICWA 16 04-Apr-06 42 Sara Lee Director, Financial
Administration Corporation, UK Planning
Jacintha Head - Human 2,431,795 Human MA 11 19-Apr-06 38 Arcot R & D Head - HR
Jayachandran Resources Resources Software Private
Limited
Rajiv Kuchhal Chief Operating 3,698,856 General BE 21 02-May-06 43 Progeon Ltd V P (Business
Officer Management Transformation)
Arvind Rao Managing Director & 6,952,848 General BTech,MS,MBA 28 01-Aug-06 50 Gilbert Global Equity Managing Director -
Chief Executive Officer Management Partners Technology Investments
Gaurav Johri* Head - Business Unit 3,215,781 General B Tech PGDM 13 01-Nov-06 37 Infosys Technologies Group Engagement
Management Limited Manager
Neeraj Sharma Head - Content 2,723,150 Content BCom,MBA 12 06-Dec-06 37 Times Internet Ltd Director Telecom
Management
Aji Joseph Head - Mobile 2,660,975 Sales & BCom, MAM 16 02-Jan-07 38 Mobile 2 Win India Head- Sales and
Marketing Marketing Pvt Ltd Business Development

43
EMPLOYED FOR PART OF THE YEAR WITH AN AVERAGE SALARY ABOVE RS. 2 LAKH PER MONTH.
Employee Name Designation Gross Nature of Qualification Experience Joining Age Previous Designation
Remuneration Duties of Date Employment
Employee
Sanjay BhambriCo-Head International 3,375,139 Sales & BSc,MBM 10 02-Apr-07 38 Hughes Network Regional Sales director
Business Marketing Systems
Krishna Jha Head - Mobile Data 2,404,730 Mobile Data B Com, PGDBA 8 01-May-07 34 ITfinity Co-Founder
Products & Services Products
Hemant Sharma CTO - Mobile Data 2,925,131 Mobile Data BE 8 01-May-07 32 ITfinity Co-Founder
Products Products
Nagesh Rao VP - Engineering 3,388,272 Mobile Data BE 9 01-May-07 31 ITfinity V P - Engineering
Products
Pratap P Head - Marketing & 2,855,307 Sales & BE,PGDMM 17 01-Jul-07 39 IBM e-Business Country Manager
Bernard Products Marketing service and solutions
Debraj Tripathy Head - Mobile 3,357,206 Mobile BE,PGBM 11 16-Aug-07 39 Sieger Solutions Managing Director
Marketing Marketing
Management Discussion and Analysis
1. INDUSTRY OVERVIEW subscribers has declined from Rs. 366 per subscriber per month in
Global telecommunications (Telecom) industry March 2006 to Rs. 297 per subscriber per month in June 2007 and,
The prospects of the global mobile market look robust with a global 275 per subscriber per month as on January 2008. The ARPU from
subscription growth being over 20%. In comparison to developed CDMA subscribers has declined from Rs. 256 per subscriber per
countries, the telecom markets in emerging economies in South Asia month in March 2006 to Rs. 206 per subscriber per month in June
such as India, Indonesia, Thailand, Pakistan, Bangladesh, Malaysia and 2007 and is Rs. 173, per subscriber per month as on January 2008.
Sri Lanka are growing rapidly and represent a huge opportunity. Mobile Value Added Services (MVAS) industry
Indian telecommunications industry Telecom operators in India face severe competition and with the
The Indian telecom industry has been growing at an exceptional call rates being one of the cheapest in the world ARPU is declining
rate over the last few years. As many as eight million telephone and the margins are under pressure. To retain customers in a pre-
connections, both wired and wireless were added in April 2008, dominantly pre-paid, high churn market, to develop alternative
taking the total number of subscriptions to over 308 million. revenue streams and to differentiate themselves, mobile operators
are focusing on MVAS for the next wave of growth. MVAS provides
Mobile subscribers in India (2003-08) incremental revenue to the operators with comparatively smaller
capital expenditure. India has thus, developed into one of the fastest
emerging markets in the world for MVAS.

In India, MVAS revenues are currently around Rs. 50 billion. This is


expected to grow rapidly and cross Rs. 80 billion by the end of this
fiscal. According to industry estimates, MVAS accounts for around
8-10% of the operators’ revenue at present. This figure is expected
to cross 20% in the next 5-7 years. The Indian mobile industry’s
revenues from MVAS are expected to grow at a CAGR of over 45%
to cross Rs. 225 billion in 2011.

The total number of wireless subscribers in the country including


GSM, CDMA and WLL stood at over 269 million at the end of April
2008 in comparison to 13 million in 2003. India surpassed the US
wireless market to become the world’s second largest wireless
network after China at the end of March 2008. Declining handset
prices and subscription cost, rising affordability, rapidly increasing
coverage and the growing concept of multiple ownership is expected
to further boost the wireless subscriber base.This figure is expected
to cross the 500 million mark in the next three to five years. The
overall teledensity was around 25% at the end of April 2008. This is
expected to cross 40% by March 2012.

The growing subscriber base has positively impacted industry In addition to supply side drivers (such as the declining ARPU, brand
revenues which have risen consistently. Revenues from cellular differentiation needs and the growing focus on entertainment related
services are expected to increase by approximately 23%. content), demand side drivers such as the booming Indian economy,
increasing user comfort with basic mobility services, personalization
However, the flipside of the growth in revenues has been the
of content and devices, increasing consumer demand for MVAS,
declining Average Revenue Per User (ARPU). The ARPU from GSM

44
reduction in call rates and cheaper handsets are also driving the significantly and contribute a higher share of the total revenues.
growth of the MVAS market.
Thus the Company is uniquely positioned to grow into one of
Major MVAS categories the leading global providers of MVAS.
All services beyond basic voice calls, as listed below, come under the
3. RISKS AND CONCERNS
category of MVAS:
• The markets in which the Company operate are highly
• Messaging - This category consists of Person-to-person competitive.
messaging such as SMS,VoiceSMS, MMS etc,
• The markets in which the Company operates are highly
• Entertainment - This category consists of songs, ring competitive. The competition would intensify further, as new
tones, caller ringback tones, voice portals, sports updates, entrants emerge in the industry due to the opportunities
wallpapers, games, video and audio downloads/streaming etc. available and as existing competitors seek to expand their
These services are very popular and are currently driving the services. Consolidation among competitors may also lead to
revenues in the Indian MVAS market. a competitive disadvantage. Competitors in the future may
include other content aggregators and wireless software
• Information - This category consists of news alerts, stock
companies from India and overseas.
prices, air/rail ticket status, bank account balance/transaction
alerts etc. • However, development of innovative revenue generating
products joint revenue product planning and service
• User Generated Content (UGC) - This category consists
deployments with its customers which involve complex
of services which allow subscribers to generate and share
hardware systems and software applications deeply
content such as Find-a-Friend, Classifieds etc.
embedded within the carrier’s network infrastructure create
• Media solutions - This category consists of interactive high technological and time-to-market barriers to entry for
services such as tele-voting, interactive programming and new entrants.
mobile auditioning.
• The Company offers white label applications and services to its
• M-Commerce - This category consists of services allowing customers who then market or promote its applications and services
transactions on mobile phones e.g. purchase of tickets to their end-user subscribers.
and other goods, person-to-person money transfer, utility
• Most of the Company’s customer contracts are on a revenue
payments etc.
sharing basis which provide that it earns and receive revenue
2. OUTLOOK AND OPPORTUNITIES only if its customers’ end-user subscribers use or subscribe
In India, the Company has long-term relationships with blue- to the services offered by them. As a result, the Company’s
chip Indian operators and has a sizable market share in India’s revenue is subject to uncertainties that are beyond its control,
fast growing MVAS market. Combining this with breadth and such as market acceptance of its application services by its
depth of product portfolio, proven ongoing product innovation customers’ end-user subscribers and the subscriber churn
and ability to scale, the Company plans to build on the market rate and are dependent upon the pricing of the services,
leadership in India. product placement and marketing and promotion activities
conducted by the Company’s customers either jointly with
The Company is fast expanding in to various International the Company or solely.
markets, and is already operational in 20 countries.The revenues
from the Company’s international operations grew from 5% of • However, the Company’s continued focus on the development
total revenues last year to 15% of the total revenues, this year. As of innovative products, a creative user interface and a good
the international operations expand organically and inorganically, understanding of consumer needs will ensure that it enjoys
the Company expects the international revenues to grow good positioning on its customers’ menus and websites.

45
• The Company earns a significant portion of its revenue • Retention of talent
from music related services which is concentrated to a
• The Company’s future success and ability to maintain
few major carrier customers.
competitive position and implement its business strategy
• The Company earns a significant portion of its revenue are dependent to a large degree on its ability to identify,
from ringback tones and music related services, which is attract, train and retain personnel with skills that enable it
expected to continue in the next few years. Also the revenue to keep pace with growing demands and evolving industry
is concentrated to a few major carrier customers, as they standards. However qualified individuals are in high demand
dominate the market share of the Indian telecommunications and competition for qualified engineers and personnel in the
industry. Although its dependence on the top five customers industry is intense, and the Company may incur significant
has reduced in the last three years, the Company will costs to retain or attract them.
continue to depend on them in the future.
• The Company follows a role–based selection process and
• To dilute the revenue concentration, the Company intends emphasizes on cultural fit of the prospective employee
to expand its geographic presence and market to new carrier with its organizational values. As a retention strategy, the
and other target customers by leveraging its expertise and Company has issued ESOPs. Further, in order to mitigate
track record in offering products that address the needs the risk, considerable emphasis is placed on development of
of the customers. Also the Company has invested and will leadership skills and on building employee motivation.
continue to invest resources in research and development in
order to keep creating new applications and solutions and to
4. INTERNAL CONTROL SYSTEMS AND THEIR
upgrade or improve the existing ones thereby expanding the ADEQUACY
existing product portfolio. The Company’s well defined organizational structure,documented
policy guidelines, defined authority matrix and internal controls
• A substantial number of the new subscribers of carrier ensure efficiency of operations, compliance with internal policies
customers are from non-metro areas and they tend to and applicable laws and regulations as well as protection of
have lower levels of average revenue per user. resources. Moreover, the Company continuously upgrades these
• The average revenue per user of the Company’s carrier systems in line with the best available practices. The internal
customers is influenced by the demographic make-up of their control system is supplemented by extensive internal audits,
subscriber base. With the expanding penetration of wireless regular reviews by management and standard policies and
telecommunications in India, increasingly, based on internal guidelines to ensure reliability of financial and all other records
estimates, a substantial number of the new subscribers of its to prepare financial statements and other data.The Company has
carrier customers are from non-metro areas who generally also put in place an extensive budgetary and other control and
spend less on telecommunications solutions and applications review mechanism, whereby the management regularly reviews
than subscribers from metro areas, which results in lower actual performance with reference to the budget and forecasts.
average revenues for its carrier customers.
4. DISCUSSION ON FINANCIAL PERFORMANCE
• In order to increase the penetration of value-added services, (CONSOLIDATED)
the Company has invested resources in understanding Net Revenue
consumer needs and their spending pattern. This has During the year ended March 31, 2008, the consolidated net revenue
led to development of new pricing solutions thereby grew by 97% to Rs. 2,618.16 million from Rs. 1,329.72 million for the
making products affordable to the existing as well as new year ended March 31, 2007.
subscribers.
Revenue from India operations grew from Rs. 1,301.34 million for
the year ended March 31, 2007 to Rs 2,212.44 million for the year
ended March 31, 2008 thus representing a 70% growth.

46
Revenue from international operations grew from Rs 28.38 million Earnings Before Tax
for the year ended March 31, 2007 to Rs 405.73 million in the The earnings before tax increased by 67 % from Rs. 510.22 million
current year ended March 31, 2008. During the current year, revenue in the year ended March 31, 2007 to Rs. 850.31 million in the year
from international operations accounted for about 15% of the total ended March 31, 2008. Earnings before tax as a percentage of net
net revenue. revenue was 32 % in the year ended March 31, 2008.

Operating Expenses Provision for Taxation


The Company incurred total operating expenses of Rs. 1,569.81 Provision for taxation increased by 48 % from Rs. 167.51 million for
million for the year ended March 31, 2008 as compared to Rs 719.82 the year ended March 31, 2007 to Rs. 247.22 million for the year
million for the year ended March 31, 2007.The current year operating ended March 31, 2008 due to an increase in current taxes and fringe
expenses represented 60% of the net revenue and comprised of: benefit taxes.
• Cost of sales and services – Rs. 388.24 million (15% of the Earnings after Tax after minority interest
net revenue) The Company’s earnings after tax after minority interest increased
• Manpower cost- Rs. 641.99 million (24% of the net by 79 % from Rs. 337.20 million in the year ended March 31, 2007
revenue) to Rs. 603.10 million in the year ended March 31, 2008. Earnings
after tax as a percentage of net revenue was 23% for the year ended
• Administration and other expenses – Rs. 539.57 million (21% March 31, 2008.
of the net revenue)
Capital Expenditure
Earnings before other income, depreciation, finance charges During the year ended March 31, 2008, the Company has incurred
and tax capital expenditure of Rs. 836.21 million.
For the year ended March 31, 2008, the Company had an earnings
before other income, depreciation, finance charges and tax of Rs. Balance Sheet
1,048.36 million, representing an increase of 72% as compared to Rs The Gross Tangible Block stood at Rs. 1,134.38 million and Net
609.90 million for the year ended March 31, 2007. Tangible Block including Capital Work In Progress (CWIP) stood at
Rs. 853.61 million as at March 31, 2008. Net Intangible block was at
Other Income Rs. 55.12 million as at March 31, 2008.
During the year ended March 31, 2008 the Company earned other
Net current assets as at March 31, 2008 stood at Rs 958.49 million
income primarily through yield on investments and interest on bank
thus representing an increase of Rs 446.02 million as compared to
deposits amounting to Rs. 74.68 million. In the previous financial year
previous year.
ending March 31, 2007, the Company earned Rs 43.41 million as
other income. 6. MATERIAL DEVELOPMENTS IN HUMAN
Depreciation and Finance charges RESOURCES
Depreciation expense during the year ended March 31, 2008 was Human resources are an integral and important part of any
Rs 255.64 million as compared to Rs 142.93 million for the year organization. The Company has put in place sound policies for
ended March 31, 2007. The increase in depreciation is on account of the growth and progress of its employees. The Company has in
increased investment in fixed assets for the Company’s expanding place individual performance management systems to encourage
operations. merit and enhance innovative thinking among its employees.
Investing in people is one of the most important success factors
Finance charges stood at Rs. 17.09 million for the year ended March for any organization today. As on March 31, 2008, the Company
31, 2008 primarily on account of charges relating to working capital had 843 (FTE and contract) employees.
loans drawn from banks.

47
7. CAUTIONARY STATEMENT regulations. Actual results could differ materially from those
Statements in the Management Discussion and Analysis describing expressed or implied. Important factors that could influence the
the industry’s projections and estimates (which are based on Company’s operations include economic developments within
reliable third party sources) as well as Company’s objectives, the country, demand and supply conditions in the industry,
estimates, projections and expectations may be “forward-looking changes in Government regulations, tax laws and other factors
statements” within the meaning of applicable securities laws and such as litigation and labour relations.

48
Auditors’ Report
TO THE MEMBERS OF ONMOBILE GLOBAL LIMITED (c) the Balance Sheet, the Profit and Loss Account and the Cash
(formerly ONMOBILE ASIA PACIFIC PRIVATE LIMITED) Flow Statement dealt with by this report are in agreement with
the books of accounts and proper returns adequate for the
We have audited the attached Balance Sheet of ONMOBILE
purpose of our audit have been received from the branches not
GLOBAL LIMITED (formerly ONMOBILE ASIA PACIFIC
visited by us;
PRIVATE LIMITED) (the “Company”) as at March 31, 2008,
the Profit and Loss Account and the Cash Flow Statement of the (d) in our opinion, the Balance Sheet, the Profit and Loss Account
Company for the year ended on that date, both annexed thereto. and the Cash Flow Statement dealt with by this report are in
These financial statements are the responsibility of the Management compliance with the Accounting Standards referred in section
of the Company. Our responsibility is to express an opinion on these 211(3C ) of the Companies Act, 1956;
financial statements based on our audit.
(e) On the basis of the written representations from the directors,
We conducted our audit in accordance with generally accepted taken on record by the Board of Directors, none of the directors
auditing standards in India. These Standards require that we plan are disqualified as on March 31, 2008 from being appointed as a
and perform the audit to obtain reasonable assurance whether director under Section 274 (1)(g) of the Companies Act, 1956;
the financial statements are free of material misstatement. An audit
(f) In our opinion and to the best of our information and according
includes, examining on a test basis, evidence supporting the amounts
to the explanations given to us, the said accounts read together
and disclosures in the financial statements. An audit also includes
with the notes thereon give the information required, by the
assessing the accounting principles used and significant estimates
Companies Act, 1956, in the manner so required and give a
made by the Management as well as evaluating the overall financial
true and fair view in conformity with the accounting principles
statements presentation. We believe that our audit provides a
generally accepted in India:
reasonable basis for our opinion.
(i) in the case of the Balance Sheet, of the state of affairs of the
As required by the Companies (Auditor’s Report) Order, 2003 issued
Company as at March 31, 2008;
by the Central Government of India in terms of Section 227 (4A) of
the Companies Act, 1956, we give in the Annexure, a statement on (ii) in the case of the Profit and Loss Account, of the profit for
the matters specified in paragraphs 4 and 5 of the said Order. the year ended on that date; and

Further to our comments in the Annexure referred to above, we (iii) in the case of the Cash Flow Statement, of the cash flows for
report that: the year ended on that date.

(a) we have obtained all the information and explanations, which


to the best of our knowledge and belief were necessary for the For Deloitte Haskins & Sells
purposes of our audit; Chartered Accountants

(b) in our opinion, proper books of account as required by law V. Srikumar


have been kept by the Company, so far as it appears from our Place: Bangalore Partner
examination of the books; Date: May 02,2008 Membership No. 84494

49
ANNEXURE TO THE AUDITORS’ REPORT (a) The particulars of contracts or arrangements referred
(Referred to in our report of even date) to Section 301 that needed to be entered into the
register, maintained under the said section have been
(i) The nature of the Company’s business/activities during the
entered.
year are such that the provisions of clauses ii, iii (b) to (d), (f),
(g), vi, viii, x, xii, xiii, xiv, xv, xvi, xviii and xix of paragraph 4 of the (b) According to the information and explanation given
Companies (Auditor’s Report) Order, 2003 are not applicable to us, where each such transaction, excluding loans
to the Company for the current year. reported under paragraph (iii) above, is in excess of
Rs 5 lakhs in respect of any party, having regard to the
(ii) In respect of its fixed assets:
explanation that the transactions involved services
(a) The Company has maintained proper records showing received of specialized nature, these have been made at
full particulars, including quantitative details and situation prices which are prima facie reasonable.
of fixed assets.
(vi) In our opinion, the internal audit functions carried out during
(b) The fixed assets were physically verified during the year the year by a firm of Chartered Accountants appointed by the
by the management in accordance with a programme of management have been commensurate with the size of the
verification, which in our opinion provides for physical Company and the nature of its business.
verification of all the fixed assets at reasonable intervals.
(vii) With respect to statutory dues:
According to the information and explanations given
to us no material discrepancies were noticed on such (a) According to the information and explanations given
verification. to us, the Company has been regular in depositing
undisputed statutory dues, including Investor Education
(c) The fixed assets disposed off during the year, in our
and Protection Fund, Employees’ State Insurance,
opinion, do not constitute a substantial part of the fixed
Income tax, Sales tax, Wealth tax, Service tax, Customs
assets of the Company and such disposal has, in our
duty, Excise duty, Cess and any other material statutory
opinion, not affected the going concern status of the
dues with the appropriate authorities during the year
Company.
and there are no undisputed statutory dues outstanding
(iii) According to the information and explanations given to us, for a period of more than six months from the date they
during the year the Company has not granted or taken any became payable as at the balance sheet date.
loans, secured or unsecured to or from companies, firms or
(b) According to the information and explanations given
other parties covered in the register maintained under section
to us, as at the year-end there are no dues of Income
301 of the Companies Act, 1956.
tax, Sales tax, Wealth tax, Service tax, Customs duty,
(iv) In our opinion and according to the information and Excise duty and Cess which have not been deposited on
explanations given to us, there are adequate internal controls account of any dispute.
procedure commensurate with the size of the Company
(viii) In our opinion and according to the information and
and the nature of its business for the purchase of Inventory
explanations given to us, the Company has not defaulted in
and fixed assets and for the sale of services and we have not
the repayment of dues to banks. There are no dues repayable
observed any continuing failure to correct major weaknesses
to financial institution and debenture holders.
in such internal controls.
(ix) According to the information and explanations given to us,
(v) In respect of contracts or arrangement entered in the register
and on an overall examination of the balance sheet of the
maintained in pursuance of Section 301 of the Companies Act
Company, funds raised on short term basis have, prima facie,
1956, to the best of our knowledge and belief, and according to
not been used during the year for long term investment.
the information and explanations given to us,

50
(x) We have verified the end use of money raised by public issue is
as disclosed in the note B2 to the schedule 15 of the financial
statements.

(xi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by
the Company was noticed or reported during the year.

For Deloitte Haskins & Sells


Chartered Accountants

V. Srikumar
Place: Bangalore Partner
Date: May 02,2008 Membership No. 84494

51
Balance Sheet as at March 31, 2008
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
Sch As at March 31, 2008 As at March 31, 2007
Particulars
No. Rs. Rs.
I SOURCES OF FUNDS
Shareholders’ Funds
Share capital 1 574,061,390 36,538,360
Stock Options Outstanding Account 1,411,984 -
Reserves & Surplus 2 5,364,598,155 1,985,365,246
Deferred Payment Liability 278,636,800 -
(Refer Note B (9) of Schedule 15)
Deferred Tax Liability (Net) 39,463,720 29,661,000
TOTAL 6,258,172,049 2,051,564,606

II APPLICATION OF FUNDS
Fixed Assets 3
Gross block 1,301,562,584 567,033,362
Less: Accumulated Depreciation 525,494,835 285,051,284
Net Block 776,067,749 281,982,078
Add: Capital Work In Progress 113,385,669 889,453,418 42,871,979 324,854,057

Investments 4 4,610,749,991 1,237,249,405


Current Assets, Loans and Advances
Sundry Debtors 5 782,758,976 514,066,940
Cash and Bank Balances 6 1,436,407,314 197,371,387
Other Current Assets 7 12,536,985 5,384,918
Loans and Advances 8 916,146,726 465,180,743
3,147,850,001 1,182,003,988
Less: Current Liabilities and Provisions 9
Current Liabilities 1,692,342,845 282,633,719
Provisions 697,538,516 409,909,125
2,389,881,361 692,542,844
Net Current Assets 757,968,640 489,461,144
TOTAL 6,258,172,049 2,051,564,606

Significant Accounting Policies and Notes On Accounts 15

The Schedules referred to above and the notes thereon form an integral part of the Balance Sheet
As per our report of even date attached

Deloitte Haskins & Sells Arvind Rao Chandramouli J


Chartered Accountants Chief Executive Officer and Director
Managing Director

V. Srikumar D Srikiran Rajesh Moorti


Partner Company Secretary Chief Financial Officer
Place: Bangalore Place: Bangalore
Date: May 02, 2008 Date: April 30, 2008

52
Profit & Loss Account for the year ended March 31, 2008
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
For the year ended For the year ended
Sch
Particulars March 31, 2008 March 31, 2007
No.
Rs. Rs.
INCOME
Telecom Value Added Services 2,272,647,646 1,279,516,367
Software Development 24,038,824 -
Software Licence Fee - 13,500,000
Other Services 10,950,963 10,133,334
Net Revenue 2,307,637,433 1,303,149,701

EXPENDITURE
Cost of Sales and Services 10 354,813,627 235,546,698
Manpower Costs 11 513,233,291 247,138,692
Administration and Other Expenses 12 522,472,844 227,650,765
Total Operating Expenses 1,390,519,762 710,336,155

Earnings before other income, depreciation, finance charges and tax 917,117,671 592,813,546
Other Income 13 68,854,956 42,774,197
Depreciation 3 249,178,189 142,252,171

Earnings before finance charges and tax 736,794,438 493,335,572


Finance Charges 14 17,093,143 160,603

Earnings before tax 719,701,295 493,174,969

Provision for taxation


- current year tax (Note B (23) of Schedule 15) 210,900,000 151,000,000
-earlier year provision 6,900,000 -
- deferred tax (Note B (22) of Schedule 15) 15,040,620 6,285,000
- fringe benefit tax 11,180,339 5,518,000

Earnings after tax 475,680,336 330,371,969

Balance brought forward from previous year 755,305,180 424,933,211

Loss transferred on Amalgamation ( Note B(8) of Schedule 15) (19,100,955) -


Provision for leave encashment (net of deferred tax): (Note B (16) of Schedule 15 ) (10,729,297) -

Transfer to capital redemption reserve (90,980) -

Balance carried forward to Balance sheet 1,201,064,284 755,305,180

Basic & Diluted Earnings Per Share (Note B (21) of Schedule 15)
- Earnings per share ( Basic)( Face value of equity share of Rs 10/- each) 10 12
- Earnings per share ( Diluted)( Face value of equity share of Rs 10/- each) 9 7

Significant Accounting Policies and Notes On Accounts 15

The Schedules referred to above and the notes thereon form an integral part of the Profit and Loss Account.
As per our report of even date attached

Deloitte Haskins & Sells Arvind Rao Chandramouli J


Chartered Accountants Chief Executive Officer and Director
Managing Director

V. Srikumar D Srikiran Rajesh Moorti


Partner Company Secretary Chief Financial Officer
Place: Bangalore Place: Bangalore
Date: May 02, 2008 Date: April 30, 2008

53
Cash Flow Statement for the Year ended March 31, 2008
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
For the year ended For the year ended
Particulars March 31, 2008 March 31, 2007
Rs. Rs.
CASH FLOW FROM OPERATING ACTIVITIES
Earnings before taxation 719,701,295 493,174,969
Depreciation and amortisation 249,178,189 142,252,171
Interest income (9,647,198) (6,563,145)
Accrued Yield on investments (56,236,676) (34,927,940)
Excess Provision reversed (2,473,410) -
(Profit)/Loss on sale of assets 1,573,402 (10,101)
Provision for Doubtful Debts 53,386,174 -
Profit on redemption of investments (144,282) (15,282)
Unrealised foreign exchange (gain) / loss 22,161,309 (1,764,896)
Finance charges 17,093,143 274,890,651 160,603 99,131,409
Changes in current assets and liabilities
Sundry debtors (293,020,000) (173,077,132)
Loans and advances (139,742,499) (19,378,454)
Current liabilities and provisions 282,009,855 (150,752,644) 152,452,925 (40,002,661)
Income taxes, TDS and FBT paid during the year (309,918,386) (210,602,826)
Net cash generated from operating activities (A) 533,920,916 341,700,892

CASH FLOW FROM INVESTING ACTIVITIES


Purchase of fixed assets and change in Capital work-in-progress (822,937,310) (254,119,215)
Proceeds from sale of fixed assets 9,070,993 10,101
Investment in subsidiaries (1,079,636,078) (195,069,099)
Payment towards Deferred Liability (2,504,361) -
Sale/ (Purchase) of securities (net) (2,129,558,037) (997,470,610)
Interest income 9,647,198 6,583,145
Yield on investments 49,084,609 (3,966,832,986) 34,927,940 (1,405,137,737)
Net cash used in investing activities (B)

CASH FLOW FROM FINANCING ACTIVITIES


Proceeds from issuance of share capital 3,793,814,990 1,225,266,870
Offer for sale payable to OMSI (net of reimbursement of expenses) 992,710,227 -
Share Issue Expense (72,450,288) -
Redemption of preference shares (33,043,936) -
Proceeds from short term borrowings 350,000,000 -
Repayment of short term borrowings (350,000,000) -
Finance charges (17,093,143) 4,663,937 ,850 (160,603) 1,225,106,267
Net cash used in financing activities (C)

NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS


(A + B + C) 1,231,025,780 161,669,422
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 197,371,387 35,701,965
Cash and Cash Equivalents of Itfinity Solutions Pvt Ltd at the time of
amalgamation 8,010,147 -
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1,436,407,314 197,371,387
Note:
1. The above Cash flow statement has been prepared under the “indirect method” as set out in the Accounting Standard 3-“Cash Flow statements”.
2.Cash & Cash Equivalents include deposits of Rs. 264,486,557/- (March 31, 2007 : 97,780,169/-) the use of which was restricted.
3.Cash & Cash Equivalents include unrealised foreign exchange loss of Rs. 13,468 /- (March 31, 2007 - Rs. 322,458/-).

As per our report of even date attached

Deloitte Haskins & Sells Arvind Rao Chandramouli J


Chartered Accountants Chief Executive Officer and Director
Managing Director

V. Srikumar D Srikiran Rajesh Moorti


Partner Company Secretary Chief Financial Officer
Place: Bangalore Place: Bangalore
Date: May 02, 2008 Date: April 30, 2008

54
Schedules forming part of the Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
As at March 31, 2008 As at March 31, 2007
Particulars
Rs. Rs.
1. SHARE CAPITAL
Authorised
74,500,000 ( at March 31, 2007 – 4,500,000) Equity Shares of Rs. 10 each 745,000,000 45,000,000
500,000 ( at March 31, 2007 – 500,000) Preference Shares of Rs. 10 each 5,000,000 5,000,000
750,000,000 50,000,000
Issued, Subscribed and Paid Up
57,406,139 ( at March 31, 2007 – 3,300,207) Equity Shares of Rs. 10 each, fully paid up 574,061,390 33,002,070
Nil ( at March 31, 2007 – 353,629) Preference Shares of Rs. 10 each, fully paid up - 3,536,290
574,061,390 36,538,360

Notes:-
1) 27,446,008 ( at March 31, 2007 – 2,287,169) Equity Shares are held by the erstwhile Holding Company OnMobile Systems Inc., USA (formerly Onscan Inc.,USA).
2) 567,749 Equity Shares ( at March 31, 2007 – 5,068) were issued to erstwhile shareholders of ITfinity Solutions Private Limited at the time of amalgamation (inclu-
sive of 524,076 bonus shares).
3) During the year the Company has made a bonus issue in the ratio of 12 : 1 to the shareholders by capitalisation of Capital Redemption Reserve and Securities
Premium account (Refer Note B (4) of the Schedule 15)
4) 423,722 Equity Shares have been issued to the promoters and employees of Vox Mobili ,SA France as a part of Purchase consideration for its acquisition [inclusive
of 391,128 bonus shares].
5) Preference shares issued during 2006-07 with rights to dividend ranking pari passu with the equity shares being convertible at any time on or or before the occur-
rence of the intial public offer or on liquidity event as defined in the investors agreement, have been partly redeemed and the balance converted into equity shares of
Rs 10/- each fully paid up during the year.(Refer note B 8(c) in Schedule 15)
6) On February 19, 2008 the Company allotted 8,613,356 equity shares of Rs 10/- each under an Initial Public Offer (IPO).

2. RESERVES AND SURPLUS


Securities Premium Account
Opening Balance 1,230,060,066 -
Add: Received during the year 4,021,051,016 1,310,457,014
Less: Share issue expenses 245,804,675 80,396,948
Less: Goodwill on Amalgamation Adjusted (Refer Note B(8 (a)) of Schedule 15 ) 358,515,640 -
Less: Redemption of Preference Shares (Refer Note B (8 (c)) of Schedule 15 ) 32,952,956 -
Less: Utilised towards bonus issue 450,303,940 4,163,533,871 - 1,230,060,066

Capital Redemption Reserve


Opening Balance - -
Add: Additions during the year 90,980 -
Less: Utilised towards bonus issue 90,980 - - -

Profit and Loss Account 1,201,064,284 755,305,180


5,364,598,155 1,985,365,246

55
Schedules forming part of the Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
3. FIXED ASSETS Amount in Rs.
Gross Block Accumulated Depreciation Net Block

Particulars Additions Deletions Included on Deletions


As at Included on As at As at As at As at As at
during the during the Amalgama- For the year Adjustments during the
April 1, 2007 Amalgamation March 31, 2008 April 1, 2007 March 31, 2008 March 31, 2008 March 31, 2007
year year tion year

Tangible Assets

Leasehold Improvements - - 34,460,529 - 34,460,529 - - 3,397,903 - - 3,397,903 31,062,626 -

Building - - 105,224,022 - 105,224,022 - - 1,150,973 - - 1,150,973 104,073,049 -

Office Equipment 1,449,312 277,276 - - 1,726,588 1,449,312 37,255 22,458 174,518 - 1,683,543 43,045 -

Computer and Electronic Equipment 409,499,494 3,206,330 546,429,724 23,224,571 935,910,977 165,722,355 1,703,565 212,387,683 117,664 12,363,942 367,567,325 568,343,652 243,777,139

Furniture and Fixtures 816,504 355,967 11,143,585 - 12,316,056 55,888 230,670 1,520,460 91,266 - 1,898,284 10,417,772 760,616

Motor Cars - 1,274,367 10,094,462 - 11,368,829 - 877,686 2,804,016 396,681 - 4,078,383 7,290,446 -

Total 411,765,310 5,113,940 707,352,322 23,224,571 1,101,007,001 167,227,555 2,849,176 221,283,493 780,129 12,363,942 379,776,411 721,230,590 244,537,755

56
Intangible Assets

Software 155,268,052 - 45,287,531 - 200,555,583 117,823,729 - 27,894,695 - - 145,718,424 54,837,159 37,444,323

Total 155,268,052 - 45,287,531 - 200,555,583 117,823,729 - 27,894,695 - - 145,718,424 54,837,159 37,444,323

GRAND TOTAL 567,033,362 5,113,940 752,639,853 23,224,571 1,301,562,584 285,051,284 2,849,176 249,178,188 780,129 12,363,942 525,494,835 776,067,749 281,982,078

Previous year 355,978,626 - 211,247,236 192,500 567,033,362 142,991,613 - 142,252,171 - 192,500 285,051,284 281,982,078

Note: Fixed Assets do not include assets aggregating to Rs. 27,050,959/- (at March 31, 2007 Rs. 27,050,959/-) received on loan basis from the erstwhile Holding company.
Schedules forming part of the Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
As at March 31, 2008 As at March 31, 2007
Particulars
Rs. Rs.
4. INVESTMENTS
Long term investments - Non Trade (unquoted) at cost
Wholly owned subsidiaries
OnMobile Singapore Pte. Ltd., Singapore
85,000 equity shares of Singapore $ 1 each, fully paid 2,289,573 2,289,573

OnMobile Australia Pty. Ltd., Australia


100,000 equity shares of Australian $ 1 each, fully paid

Pt. Indonesia OnMobile ., Indonesia


1,000 equity shares of USD 100 each, fully paid 4,062,000 -

Vox mobili SA , France


6,501,705 equity shares of Euro 0.05 each, fully paid 1,431,111,797 -

Phonetize Solutions Private Ltd , India


9,999 equity shares of Rs 10/- each, fully paid 99,990 -

Other Subsidiaries
Verse Innovation Private Ltd, India
10,412 equity shares of Rs 10/- each, fully paid 22,000,556 -

ITfinity Solutions Private Limited (Amalgmated into the company with effect from May 14, 2007)
Nil (Previous Year: 559,781) equity shares of Rs 10/- each, fully paid. - 213,476,075
TOTAL LONG TERM-UNQUOTED-(A) 1,462,894,916 219,096,648

Short term investments - Non Trade (quoted) at lower of cost and market value
ABN AMRO Fixed Term Plan
Nil ( at March 31, 2007 –25,641,719) units, Net Asset Value Rs Nil ( at March 31, 2007 – Rs 257,781,327) - 255,842,986

ABN AMRO Interval Fund Quartely Plan H Interval Dividend


40,000,000 ( at March 31, 2007 –Nil) units, Net Asset Value Rs 403,932,000/- ( at March 31, 2007 – Rs Nil) 400,000,000 -

Kotak Fixed Maturity Plan 3 M Series 8


Nil ( at March 31, 2007 – 25,732,171) units , Net Asset Value Rs Nil ( at March 31, 2007 – Rs 257,576,457) - 255,881,032

ING Fixed Maturity Fund - 42 Institutional Dividend


30,010,048 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs.301,552,969/- ( at March 31, 2007 – Rs. Nil) 300,100,482 -

HDFC FMP 90D January 2008 (VI) - Wholesale Plan Dividend 500,000,000 -
50,000,000 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 505,150,000/- ( at March 31, 2007 – Rs. Nil) 300,100,482 -

Standard Chartered Fixed Maturity Plan - Quarterly Series 25 - Dividend


100,86,574 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 100,896,000/- ( at March 31, 2007 – Rs. Nil) 100,866,000 -

Templeton Quarterly Interval Plan - Plan B - Institutional - Dividend Payout


24,974,276 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 251,446,010/- ( at March 31, 2007 – Rs. Nil) 250,000,000 -

Birla Sunlife Qtrl Interval - Series 9 - Dividends Payout 250,000,000 -


25,000,000 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 250,727,500/- ( at March 31, 2007 – Rs. Nil)

Birla Sunlife Qtrl Interval - Series 1 - Dividends Payout


10,023,681 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 100,520,629/- ( at March 31, 2007 – Rs. Nil) 100,304,973 -

ICICI Prudential Interval Fund II Quarterly Interval Plan E


29,186,524 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 293,283,707/- ( at March 31, 2007 – Rs. Nil) 291,865,242 -

57
Schedules forming part of the Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
As at March 31, 2008 As at March 31, 2007
Particulars
Rs. Rs.

TATA Dynamic Bond Fund Option B - Dividend


17,002,038 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 173,245,662/- ( at March 31, 2007 – Rs. Nil) 172,868,217 -

TATA Fixed Income Portfolio Fund Scheme A3 Institutional


24,988,505 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 250,512,264/- ( at March 31, 2007 – Rs. Nil) 250,000,000 -

DWS QUARTERLY INTERVAL FUND - SERIES 1 - Dividend Plan


10,000,000 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 100,428,000/- ( at March 31, 2007 – Rs. Nil) 100,000,000 -

Reliance Interval Fund


Nil ( at March 31, 2007 –2,000,000 ) units, Net Asset Value Rs Nil ( at March 31, 2007 – Rs. 200,806,879/-) - 200,000,000

Pru ICICI Fixed Maturity Plan Series 35


Nil ( at March 31, 2007 – 25,748,988) units , Net Asset Value Rs Nil ( at March 31, 2007 – Rs 257,554,248/-) - 255,863,434

ICICI Prudential - Flexible Income Plan


14,205,826 ( at March 31, 2007 – Nil) units , Net Asset Value Rs 150,205,317/- ( at March 31, 2007 – Rs Nil) 150,205,317 -

LIC Mutual Fund


Nil ( at March 31, 2007 – 4,605,177) units, Net Asset Value Rs Nil ( at March 31, 2007 – Rs 50,565,305/-) - 50,565,305

Birla Sun Life Liquid Plus - Instl. - Daily Dividend -Reinvestment


5,120,516 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 51,254,038/- ( at March 31, 2007 – Rs. Nil) 51,239,979 -

Birla Sun Life Liquid Plus - Instl. - Daily Dividend -Reinvestment


3,002,311 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 30,033,022/- ( at March 31, 2007 – Rs. Nil) 30,033,022 -

Fidelity Liquid Plus Inst - Daily Dividend


5,011,320 ( at March 31, 2007 Nil ) units, Net Asset Value Rs 50,117,715/- ( at March 31, 2007 Rs. Nil) 50,118,716 -

JP Morgan India liquid fund -Dividend Plan-Reinvest


5,000,813 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 50,052,641/- ( at March 31, 2007 – Rs. Nil) 50,052,641 -

Mirae Asset Liquid Fund-Institutional-Dividend Plan (Daily)


50,078 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 50,147,979/- ( at March 31, 2007 – Rs. Nil) 50,147,979 -

Principal Floating Rate Fund FMP Institutional Option - Dividend Reinvestment Daily
4,999,102 ( at March 31, 2007 –Nil ) units, Net Asset Value Rs 50,052,507/- ( at March 31, 2007 – Rs. Nil) 50,052,507 -
TOTAL SHORT TERM QUOTED- (B) 3,147,855,075 1,018,152,757
GRAND TOTAL -(A+B) 4,610,749,991 1,237,249,405

5. SUNDRY DEBTORS (Unsecured)


Debts outstanding for a period exceeding six months
Considered good 78,995,927 32,157,089
Considered doubtful 34,751,313 2,662,125

Other debts
Considered good 465,774,380 315,967,111
Considered doubtful 18,634,861 -
Unbilled Revenue 237,988,669 165,942,740
836,145,150 516,729,065
Less: Provision for Doubtful Debts 53,386,174 2,662,125
Sundry debtors include due from subsidiaries Rs 30,590,454/- ( at March 31, 2007 – Rs 10,266,265/-) 782,758,976 514,066,940

58
Schedules forming part of the Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
As at March 31, 2008 As at March 31, 2007
Particulars
Rs. Rs.
6. CASH AND BANK BALANCES
Cash on hand 175,458 151,315
Cheques on hand - 182,085
Balances with scheduled banks:
- In current account 1,414,490,889 96,029,808
- In deposit account 13,990,544 101,008,179
Balances with other banks (non scheduled banks):
- Citibank Malaysia 1,527,235 -
- Citibank UK 4,840,190 -
- Citibank Australia 576,968 -
- Citibank Bangladesh 806,030 -
1,436,407,314 197,371,387
Balances with banks include:
- Margin Money Deposit 9,580,087 4,480,169
- LC Deposit 1,200,000 -
- Amounts in Escrow 253,706,470 -
- Deposits maintained in terms of a Shareholder Agreement - 93,300,000
Maximum amount outstanding at any time during the year with the non scheduled banks are as follows:
Citibank Malaysia 1,823,626 -
Citibank UK 4,840,190 -
Citibank Australia 2,611,724 -
Citibank Bangladesh 881,980 -

7. OTHER CURRENT ASSETS


Accrued Dividend 12,536,985 5,384,918
12,536,985 5,384,918

8. LOANS AND ADVANCES (Unsecured, considered good)


Advances recoverable in cash or in kind or for value to be received. 59,169,044 20,554,442
Other Deposits 145,395,647 47,360,817
Dues from Subsidiaries :
- Loan 7,735,376 1,443,895
- Other advances 2,404,671 -
Advance income tax & tax deducted at source 701,441,988 395,821,589
916,146,726 465,180,743

9. CURRENT LIABILITIES AND PROVISIONS


Current liabilities:
Sundry creditors other than Micro and Small Enterpises (Refer Note B (26) of Schedule 15)
- for capital items- due to erstwhile Holding company 66,821,049 73,285,441
- for capital items- due to others 37,463,911 36,047,364
- for expenses 499,111,914 117,672,009
- due to Subsidiaries 17,818,916 8,106,443
Due to erstwhile Holding company * 940,198,764 -
Share Application money (Refer Note B (3) of Schedule 15) 3,706,470 -
Deferred revenue 4,812,090 899,825
Other liabilities 122,409,731 46,622,637
1,692,342,845 282,633,719
Note:
Sundry Creditors include due to a company in which a director is interested Rs 769,190/- ( at March 31, 2007 - Rs. 202,346/-). Maximum balance during the year Rs
769,190/- ( at March 31, 2007 – Rs. 202,346/-).
*Amount due to the erstwhile Holding company is amount payable to OnMobile Systems Inc towards Offer for Sale of 2,287,189/- equity shares at the rate of Rs
440/- per share net of its share in the pre-issue expenses to the extent of Rs 66,164,396/-.
Provisions:
Income Tax 593,682,346 362,970,249
Fringe Benefit Tax (Net)* 174,216 3,200,000
Employee Benefits 26,480,244 8,841,673
Other Provisions 77,201,710 34,897,203
* Net of advance FBT paid Rs 20,471,779/- ( at March 31, 2007 – Rs. 5,517,154/-) 697,538,516 409,909,125

59
Schedules forming part of the Profit and Loss Account
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
For the year ended For the year ended
Particulars March 31, 2008 March 31, 2007
Rs. Rs.
10. COST OF SALES AND SERVICES
Content fee and Royalty 230,694,581 187,529,211
Cost of hardware and software development charges 124,119,046 48,017,487
354,813,627 235,546,698

11. MANPOWER COST


Salaries, wages and bonus 433,596,729 220,087,672
Contribution to provident fund and other funds 56,239,740 16,941,199
Workmen and staff welfare expenses 19,226,466 6,538,166
Employee Insurance 4,170,356 3,571,655
513,233,291 247,138,692

12. ADMINISTRATION AND OTHER EXPENSES


Power and Fuel 12,291,256 6,038,785
Rent 70,959,662 32,972,361
Repairs 14,757,769 3,221,186
Office maintenance 25,373,602 18,083,381
Rates and taxes 3,752,739 851,731
Printing and stationery 3,193,088 1,586,161
Postage, courier and octroi 3,565,820 1,295,771
Communication charges 53,338,727 26,723,836
Training and Recruitment expenses 20,083,518 9,762,394
Travelling and conveyance 81,811,906 43,471,650
Legal, professional & consultancy charges 66,898,726 25,956,975
Commission to non whole time directors 5,000,000 -
Remuneration to auditors 2,300,000 1,000,000
Marketing expenses 38,804,448 22,618,881
Business development expenses 32,227,664 23,746,098
Provision for Doubtful Debts 53,386,174 2,662,125
Brokerage and Commission 1,730,244 4,823,406
Bank charges 4,910,086 652,555
Miscellaneous expenses 1,298,761 2,183,469
Loss on Sale of Assets 1,573,402 -
Exchange loss 25,215,252 -
522,472,844 227,650,765

13. OTHER INCOME


Interest :
- from deposits with banks 9,647,198 6,563,145
(Tax deducted at source Rs 1,623,246/- ,at March 31, 2007 Rs 253,485/-)
- from subsidiaries 230,678 55,480
Accrued Dividend on investment 56,236,676 34,927,940
Profit on Sale of Assets - 10,101
Profit on redemption of investments 144,282 15,282
Excess Provision reversed 2,473,410 -
Exchange Gain - 1,202,249
Other Income 122,712 -
68,854,956 42,774,197

14. FINANCE CHARGES


Interest on Short term loan 17,093,143 160,603
17,093,143 160,603

60
Schedules to the Financial Statements for the year ended March 31, 2008
ONMOBILE GLOBAL LIMITED 4. Fixed assets
(formerly OnMobile Asia Pacific Private Limited) Fixed assets are stated at cost of acquisition including taxes, duties,
freight and other incidental expenses relating to acquisition and
15. SIGNIFICANT ACCOUNTING POLICIES installation.
AND NOTES ON ACCOUNTS Capital work in progress is stated at cost and includes advances
paid to acquire fixed assets and the cost of fixed assets that are
A. SIGNIFICANT ACCOUNTING POLICIES
not ready for their intended use at the Balance Sheet date.
1. Basis of preparation of financial statements
5. Depreciation
The financial statements are prepared under the historical cost
convention, on the accrual basis of accounting, in accordance Depreciation on assets is provided on a monthly basis using the
with Indian Generally Accepted Accounting Principles (“GAAP”). straight-line method based on useful/commercial lives of these
GAAP comprises mandatory Accounting Standards prescribed assets as estimated by the Management.
by the Company Accounting Standards Rules, 2006. The useful/commercial lives are as follows:
The management evaluates all recently issued or revised Category of Asset No. of years
Accounting Standards on an ongoing basis.
Leasehold Improvements primary lease period
Building 61 years
2. Use of Estimates
Office equipment 3 years
The preparation of the financial statements in conformity with
Furniture & Fixtures 3 years
GAAP requires that the management makes estimates and
assumptions that affect the reported amounts of assets and Computers & Electronic equipment 3 years

liabilities, disclosure of contingent liabilities as at the date of the Computer Software 3 years

financial statements and the reported amounts of revenue and Motor Car 3 years
expenses during the reported period. Examples of such estimates
Individual assets costing less than Rs.5,000/- are depreciated in
includes provision for doubtful debts , future obligations under
full in the year of purchase. The depreciation rates adopted are
employee benefit plans, income taxes and the useful lives of
the same as or higher than the rates specified in Schedule XIV of
fixed assets. Contingencies are recorded when it is probable
the Companies Act, 1956.
that a liability will be incurred, and the amount can be reliably
estimated. When no reliable estimate can be made, a disclosure 6. Investments
is made as contingent liability. Actual results could differ from
Short term investments are stated at lower of cost and market
those estimates.
value.

3. Revenue Recognition Long term investments are stated at cost. Provision is made for
Revenue from Telecom Value Added Services including royalty any diminution in value of long term investment which is other
income, net of customer credits, is recognized on provision than that of a temporary in nature.
of services in terms of revenue sharing arrangements with the
telecom operators.
7. Foreign currency transactions
Transactions in foreign currencies are translated at the exchange
Revenue from sale of user licences for software applications is
rate prevailing on the date of the transaction. Monetary assets
recognized when the applications are functionally installed at the
and Monetary liabilities denominated in foreign currencies are
customer’s location as per the terms of the contracts.
translated at the exchange rate prevalent at the date of the
Revenue from Other Services including maintenance services is Balance sheet. Exchange differences arising on foreign currency
recognized proportionately over the period during which the translations are recognized as income or expense in the year in
services are rendered as per the terms of contract. which they arise.

Dividend on investment is recognized on an accrual basis. Profit


8. Employee Benefits
on sale of investments is recorded on transfer of title from the
Company and is determined as the difference between the sales a. Short term employee benefits including salaries, social
price and the then carrying value of the investment. security contributions, short term compensated absences

61
(such as paid annual leave) where the absences are expected and OnMobile Employees Stock Option Plan – I 2008 to which
to occur within twelve months after the end of the period in the said guidance note is applicable, are accounted under intrinsic
which the employees render the related employee service, value method and accordingly, the difference between the fair
profit sharing and bonuses payable within twelve months value of the underlying shares and the exercise price, if any, is
after the end of the period in which the employees render expensed to profit and loss account over the period of vesting.
the related services and non monetary benefits (such as
medical care) for current employees are estimated and 10. Leases
measured on an undiscounted basis. Leases arrangements, where the risks and rewards incidental
to ownership of an asset substantially vest with the lessor, are
b. Defined Contribution Plan
classified as operating leases and the lease rentals thereon are
Company’s contributions paid / payable during the year charged to the Profit and Loss account on accrual basis. Assets
to Provident Fund are recognised in the Profit and Loss acquired under finance lease arrangements are recognised as an
Account. asset and a liability is set up at the inception of the lease, at an
amount equal to lower of the fair value of the leased assets or
c. Defined Benefit Plan
the present value of the future minimum lease payments.
Liabilities for gratuity funded in terms of a scheme
administered by the Life Insurance Corporation of India, are 11. Borrowing Cost
determined by Actuarial Valuation made at the end of each Borrowing costs incurred for the acquisition of qualifying assets
financial year. Provision for liabilities pending remittance to are recognised as part of cost of such assets when it is possible
the fund is carried in the Balance Sheet. that they will result in future economic benefits to the company
while other borrowing costs are expensed.
Actuarial gain and losses are recognized immediately in the
statement of Profit and Loss Account as income or expense.
12. Income Tax
Obligation is measured at the present value of estimated
Income tax expense includes Indian and International income
future cash flows using a discounted rate that is determined
taxes.Income tax comprises of the current tax provision, net
by reference to market yields at the Balance Sheet date on
change in deferred tax asset or liability in the year and fringe
Government bonds where the currency and terms of the
benefit tax.
Government bonds are consistent with the currency and
estimated terms of the defined benefit obligation. Provision for current tax is made taking into account the
admissible deductions/allowances and is subject to revision
d. Liability for Leave Encashment is provided based on
based on the taxable income for the fiscal year ending 31 March
accumulated leave credit outstanding to the employees as
each year.
on the date of Balance Sheet.
Deferred tax assets and liabilities are recognized for the future
9. Employee Stock Option Plan tax consequences of temporary differences between carrying
The Company has formulated 6 Employee Stock Option Plans values of the assets and liabilities and their respective tax bases
(“ESOP”) - OnMobile Employees Stock Option Plan – I 2003, and are measured using enacted tax rates applicable on the
OnMobile Employees Stock Option Plan – II 2003, OnMobile Balance Sheet date. Deferred Tax assets are recognized subject
Employees Stock Option Plan – III 2006, OnMobile Employees to management’s judgement that realization is virtually certain.
Stock Option Plan – I 2007 ,OnMobile Employees Stock Option The effect of changes in tax rates on deferred tax assets and
Plan – II 2007 and OnMobile Employees Stock Option Plan – I liabilities is recognized in the income statement in the year of
2008. enactment of change.
The Company has obtained legal opinion that the guidance note Fringe benefit tax is provided as per provisions of the Income
on Accounting for Employees Share based payments are not Tax Act 1961.
applicable to OnMobile Employee Stock Option Plan – I 2003
and II 2003. Options granted in terms of OnMobile Employee Fringe Benefit tax on stock options exercised during the year is
Stock Option Plan – III 2006, OnMobile Employees Stock Option being recovered from the beneficiaries and not charged to the
Plan – I 2007 , OnMobile Employees Stock Option Plan – II 2007 Profit and Loss Account.

62
13. Cash flow Statement 2. Initial Public Offer (IPO)
Cash Flow Statement has been prepared in accordance with During the year, the Company completed a Public Issue of
the indirect method prescribed in Accounting Standard 3-“Cash 10,900,545 Equity Shares of Rs. 10/- each for cash at a price
flow statements”. The cash flows from operating, investing and of Rs. 440/- each aggregating to Rs. 4,796,239,800/-. The public
financing activities of the Company are segregated. issue of 10,900,545 equity shares consisted of a fresh issue of
8,613,356 equity shares aggregating to Rs 3,789,876,640/- and
14. Impairment of Assets an offer for sale of 2,287,189 equity shares by the erstwhile
The carrying amounts of assets are reviewed at each Balance Holding company, OnMobile Systems Inc aggregating to Rs
Sheet date if there is any indication of impairment based on 1,006,363,160/-. The premium of Rs. 430/- per share amounting
internal / external factors. An asset is treated as impaired when to Rs. 3,703,743,080/- from the allotment of 8,613,356 shares
the carrying cost of assets exceeds its recoverable amount. An has been credited to Securities Premium Account.The Securities
impairment loss is charged to Profit and Loss Account in the Premium Account stands net of share issue expenses of Rs
year in which an asset is identified as impaired. The recoverable 245,804,675/-.
amount is greater of the asset’s net selling price and value in
Pursuant to the Public Issue, shares of the Company have been
use. In assessing value in use, the estimated future cash flows
listed on Bombay Stock Exchange and National Stock Exchange
are discounted to the present value. A previously recognized
effective February 19, 2008.
impairment loss is further provided or reversed depending on
changes in circumstances. The actual utilization of the proceeds of the issue of Rs
3,544,540,000/- (net of share issue expenses) as disclosed in the
15. Earnings per Share Prospectus is as under:
In determining the earnings per share, the Company considers Amount in Rs
the net profit after tax. The number of shares used in computing Total cost to be Actual
Sl.
Expenditure Items financed from the utilization upto
basic earnings per share is the weighted average number of equity No.
Net Proceeds March 31, 2008
shares outstanding during the year. The number of shares used 1 Purchase of equipment for of-
fices at Bangalore, Mumbai and 1,805,210,000 154,842,594
in computing diluted earnings per share comprises the weighted
Delhi and various customer sites
average number of equity shares considered for deriving basic 2 Working capital requirements 50,000,000 -
earnings per share and also the weighted average number of
3 Repayment of loan 350,000,000 350,000,000
equity shares that could have been issued on the conversion
of all dilutive potential equity shares. Dilutive potential equity 4 General corporate purposes 1,339,330,000 13,713,385
shares are deemed converted as of the beginning of the year
Total 3,544,540,000 518,555,979
unless issued at a later date.
The unutilised funds as at March 31, 2008 have been temporarily
16. Provisions and Contingencies invested in short term investments.
Provision is recognized when an enterprise has a present
3. Share application money represents unencashed refund
obligation as a result of past event; it is probable that an outflow
instruments issued to the investors. This does not include any
of resources will be required to settle the obligation, in respect
amount, due and outstanding, to be credited to the Investor
of which a reliable estimate can be made. Provisions are not
Education and Protection Fund as per the provisions of the
discounted to its present value and are determined based on
Companies Act, 1956.
best estimate required to settle the obligation at the Balance
Sheet date. These are reviewed at each Balance Sheet date and 4. In the general meeting held on August 17, 2007 the shareholders
adjusted to reflect current best estimates. approved the issue of 12 equity shares of face value of Rs 10/-
each as bonus shares for every one share held by the equity
B. NOTES ON ACCOUNTS
shareholders of the Company whose name appear in the register
1. The name of the Company has been changed to “OnMobile of members as on the record date, by capitalization of capital
Global Limited” (the “Company”) from “OnMobile Asia Pacific redemption reserve and Securities premium account. The Board
Private Limited” with effect from August 21, 2007. of Directors by a circular resolution on August 18, 2007 has
allotted 45,039,492 bonus shares (out of which 391,128 shares

63
were allotted on September 10, 2007 after receipt of Foreign outstanding, credits, liabilities, benefits under income tax,
Investment and Promotion Board approval). excise, sales tax (including deferment of sales tax) benefits
for and under STPI registrations, duties and obligations were
5. Estimated amount of contracts (net of advances) remaining
transferred to and vested in the Company retrospectively
to be executed on capital account and not provided for
with effect from April 1, 2006.
– Rs 82,641,685/- (Previous year: Rs. 90,152,292/-).
Pursuant to the Scheme, the investment held by the
6. The Company has been named as one of the 20 defendants in Company in the said subsidiary was cancelled and the balance
a civil dispute for injunction pending adjudication. However in consideration to the minority shareholders aggregating to
the opinion of the management no liability would arise in this Rs. 191,664,272/- was paid by allotment of 30,997 equity
regard. shares of Rs. 10/- each fully paid up and 21,774 preference
shares of Rs. 10/- each fully paid up in the Company. The
7. Export obligation to be met:
amalgamation was accounted under the “ Purchase Method”
The Company has imported certain plant & machinery including as per the Accounting Standard 14 - “Accounting for
on loan basis, at concessional/nil rate of duty under Software Amalgamations” and in accordance with the Scheme, the
Technology Park of India Scheme with an obligation to export assets and liabilities were taken over at their book values. In
software of a specified value by March 31, 2008.As at the year end terms of the scheme, the excess of consideration over the
there was a shortfall in meeting the export obligation amounting value of the net assets taken over being Goodwill arising on
to Rs. 45,621,138/-. The Company has filed an application to amalgamation as calculated below was appropriated against
Software Technology Park of India for extending the Export the Securities Premium account. If accounted based on
Obligation period to 2008-2009 which is pending. Pending Accounting Standard 14 - “Accounting for Amalgamations”,
receipt of the extension, the Company is contingently liable for goodwill would have been amortised over its useful life not
customs duty amounting to Rs. 11,843,082/- (Previous Year: Rs. exceeding 5 years from the effective date resulting in the
11,843,082/-), interest thereon and penalty of the equivalent profits for the year ended March 31, 2008 being lower by Rs.
amount against export obligations to be met. The Company has 71,703,128/-.
provided bank guarantee of Rs. 475,000/- (net of margin money
deposit) in respect of the same. Goodwill arising on amalgamation:

Particulars Amount (Rs.)


8. Amalgamation with ITfinity Solutions Private Ltd.
Fixed Assets 1,197,153
a. The Company acquired 51% of share capital of ITfinity
Solutions Private Limited (“ITfinity”) which is in the same Investment 1,110,000

line of business, as the Company, on December 22, 2006 Current Asset 58,907,732
for a total consideration of Rs. 213,476,075/- based on an Current Liabilities (14,578,794)
independent valuation, of which Rs. 195,069,099/- was payable Miscellaneous Expenditure 71,600
in cash and the balance consideration of Rs. 18,406,976/-
Deferred Tax liabilities (82,984)
payable by allotment of equity shares of Rs. 10/- each based
on an exchange ratio recommended by the independent Total Net Assets as on April 1, 2006 46,624,707 A

valuer. Accordingly, the value of investment in ITfinity was Value of Consideration to Minority Shareholders 191,664,272 B
recorded at Rs. 213,476,075/- and the aggregated premium Cancellation of Investments 213,476,075 C
of Rs.18,356,296/- on allotment of shares was credited to Goodwill on Amalgamation
the Securities Premium Account. (Adjusted against Securities 358,515,640 (B+C-A)
Premium Account)
Subsequently ITfinity was amalgamated with the Company
b. Adjustments arising out of amalgamation:
with effect from April 1, 2006, in terms of the Scheme of
Amalgamation (“the Scheme”) sanctioned by the Honorable As per the amalgamation order received by the Company,
High Court of Karnataka, Bangalore and the High Court of the appointed date is April 1, 2006. Accordingly net loss
Judicature at Bombay vide their orders dated March 27, 2007 from ITfinity during the financial year 2006-07 as below is
and April 21, 2007 respectively. The Scheme came into effect transferred to the Profit and Loss account in the books of
on May 14, 2007 and pursuant thereto all assets and debts, the Company upon amalgamation.

64
3. Euros 3,520,000 in cash subsequent to an earn out
Amount (Rs.)
valuation adjustment as mentioned in the share purchase
Net Profit for the year from April 1, 2006 to March 31, 2007
( After alignment to Company’s accounting policies )
18,610,336 agreement, payable to the founders of Vox and
Less: Dividend paid during April 1, 2006 to December 22, 4. Euros 900,000 payable in Cash to the eligible key
37,711,291
2006 before ITfinity became a subsidiary of the Company employees of Vox
Net loss transferred on amalgamation (19,100,955) Accordingly, the Company has issued 423,722 equity
c. Of the shares issued and allotted to the minority shareholders shares of Rs 10/- each and paid Euros 18,735,192 of
of erstwhile ITfinity, as discussed in Para 8(a) above, 9,098 which Euros 2,543,192 are paid into an escrow account
Preference shares were redeemed on June 01, 2007 at a which would be released to the founders at the end of 24
premium of Rs. 3,622/- each and 12,676 Preference Shares months on satisfaction of certain conditions.The balance
of Rs. 10/- each were converted into equity shares of Rs. 10/- consideration of Euros 4,420,000 (Rs 278,636,800/-)
each at par. Capital Redemption Reserve was credited to the is shown as deferred payment liability in the Balance
extent of the face value of the Preference Shares redeemed Sheet.
during the year. b. In terms of the share purchase agreement, the Company vide
resolution of Compensation committee of the Board dated
d. 24,430 Equity Shares issued to the founders of ITfinity
February 27, 2008 has granted 74,360 options exercisable at
on its amalgamation, have been retained in an escrow up
Rs 299/- per option, for a total value aggregating to Euros
to the committed period of their employment being up to
400,000 to the key employees other than the founders of
December 20, 2008 (“Employment Period”). On expiration
Vox.
of the Employment Period, the shares shall be released to
the Founders. According to the Employment Agreement 10. Investment in Ver se Innovation Private Limited
read along with the Merger Agreement and the Escrow
During the year the Company has vide resolution of the Board
Agreement, if in case the employment gets terminated within
of directors dated July 12, 2007 and the subscription cum
the Employment Period due to reasons stated therein, the
shareholders agreement signed by and between the Company
shares shall be transferred back to the Company.
and the promoters of Ver se Innovation Private Limited (“
e. In view of the aforesaid amalgamation with effect from April Ver se ”) on October 26, 2007 has acquired 51% equity share
1, 2006, the figures for the current year are not comparable capital of Ver se consisting of 10,412 equity shares for a total
to those of the previous year. consideration of Rs 22,000,556/-.

9. Acquisition of Voxmobili S.A. The Company has further agreed to a capital commitment in Ver
se up to Rs. 66,000,000/- by way of equity (including warrants) or
a. During the year the Company has vide resolution of
any debt instrument including optionally convertible preference
the Board of Directors dated July 12, 2007 and the share
shares, term loans or any other such instrument or arrangement
purchase agreement signed by and between the Company
as may be agreed by and between the parties as per the terms and
and the shareholders of Voxmobili S.A (“ Vox”) on July 18 ,
conditions of the subscription cum shareholders agreement.
2007 (“Shares purchase agreement”) has acquired 6,501,708
shares consisting of 2,500,000 Class A shares and 4,001,708 11. Investments, loans and advances to wholly owned
class B shares of Vox on September 10, 2007 for a maximum
subsidiaries and employees :
total consideration of Euros 25,434,423 (aggregating to Rs
a. Investment in the wholly owned Subsidiaries has been made
1,431,111,797/- including Rs 2,504,361/- of taxes payable
considering strategic business expansion plan. In the opinion
towards transfer of shares) payable under the share purchase
of the management and considering intrinsic value and the
agreement as below:
business potential of the subsidiaries, the investment has
1. Euros 18,735,192 in Cash
been carried at cost.
2. 423,722 equity shares (including bonus shares) of the
b. The Company has given loan to its wholly owned subsidiaries
Company payable to Founders of Vox valued at Euros
the details of which are given below and which in the opinion
2,279,231 based on independent valuation and approved
of the Management is realizable in full.
by the Foreign Investment and Promotion Board vide
their letter dated September 5, 2007.

65
Maximum amount due at Maximum amount due at
As at As at
Particulars any time during the year any time during the year
March 31, 2008 March 31, 2007
2007-08 2006-07
Subsidiaries
- OnMobile Singapore Pte. Ltd 1,591,290 1,443,895 1,591,290 1,443,895
- PT OnMobile Indonesia 6,144,086 - 6,144,086 -
Employees loan given in the ordinary course of the busi-
ness and as per the service rules of the company
- no repayment schedule or repayment beyond seven - - - -
years
- no interest or at an interest rate below which is speci-
11,511,838 3,930,808
fied in section 372A of the Companies Act, 1956.

Details of purchase and sale of investments during the year:


Purchased Sold(at cost)
Name of the fund No. of Shares / No. of Shares /
Amount Amount
Units Units
Long term Investments
Pt OnMobile Indonesia 1,000 40,62,000 - -
Vox Mobili SA,France 6,501,705 1,431,111,797 - -
Phonetize Solutions Private Ltd (included on Amalgamation) 9,999 99,990 - -
Verse Innovation Private Ltd 10,412 22,000,556 - -

Short Term Investments


ING Liquid Fund - Super IP - Daily Dividend 43,229,991 432,548,252 40,227,679 402,515,230
ICICI Prudential Flexible Income Plan - Daily Dividiend 66,445,714 702,563,756 52,239,886 552,358,438
DBS Chola Liquid Fund 30,065,043 300,730,628 30,065,043 300,730,628
DWS Credit Opportunities Cash Fund 6,013,681 60,462,750 6,013,681 60,462,750
Principal Floating Rate MF 10,058,006 100,703,773 10,058,006 100,703,773
Templeton Long Term Plan Institutional Option - Dividend Reinvestment 20,045,226 201,043,590 20,045,226 201,043,590
Tata Mutual Fund 77,618,570 778,949,820 77,618,570 778,948,922
Kotak Fixed Maturity Plan 3 M Series 8 639,274 6,270,143 26,371,445 263,714,451.51
Kotak Fixed Maturity Plan 3 M Series 16 26,425,851 264,258,513 26,425,851 264,258,513.00
ABN AMRO Fixed Term Plan 752,782 7,617,526 26,394,501 264,995,321.
Reliance Interval Fund 367,304 3,626,166 2,367,304 204,433,045
Pru ICICI Fixed Maturity Plan Series 35 134,925 1,494,836 25,883,912 258,839,123
LIC MF Liquid Plus Fund - Daily Dividend 25,185,625 251,858,082 29,990,802 302,423,387
HSBC Liquid Plus Fund 5,205,084 52,116,425 5,205,084 52,116,425
Lotus India Liquid Plus Fund - IP - Daily Dividend 30,073,763 301,209,786 30,073,763 301,209,786
Birla Sun life Liquid Plus 15,144,197 151,544,952 10,023,681 100,304,973
ING Fixed Maturity Fund - 42 Institutional Dividend 30,010,048 300,100,482 - -
HDFC FMP 90D January 2008 (VI) - Wholesale Plan Dividend 50,000,000 500,000,000 - -
Standard Chartered Fixed Maturity Plan - Quarterly Series 25 - Dividend 10,086,574 100,866,000 - -
ABN AMRO Interval Fund Quartely Plan H Interval Div-Redemption 40,000,000 400,000,000 - -
Templeton Quarterly Interval Plan - Plan B - Institutional - Dividends Payout 24,974,276 250,000,000 - -
Birla Sunlife Qtrl Interval - Series 9 - Dividends Payout 10,023,681 100,304,973 - -
BSL Quarterly Interval Fund Series 9 25,000,000 250,000,000 - -
ICICI Prudential Interval Fund II Quarterly Interval Plan E 29,186,524 291,865,242 - -
Tata Fixed Income Portfolio A3 24,988,505 250,000,000 - -
Tata Dynamic Bond Fund Option B – Dividend 17,002,038 172,868,217 - -
DWS Quarterly Interval Fund-Series 1-Dividend Plan 10,000,000 100,000,000 - -
Fidelity Liquid Plus Inst - Daily Dividend 5,011,320 50,118,716 - -
Mirae Asset Liquid Fund-Institutional-Dividend Plan (Daily) 50,078 50,147,979 - -
Principal Floating Rate Fund FMP Insti. Option - Dividend Reinvestment Daily 4,999,102 50,052,507 - -
JP Morgan India liquid fund -Dividen Plan-Reinvest 5,000,813 50,052,641 - -
Total 650,261,111 7,990,650,098 419,004,434 4,409,058,356

66
13. Loans and advances include: 15. Auditors Remuneration
For the year For the year
As at As at
Particulars Particulars ended March ended March
March 31, 2008 March 31, 2007
31, 2008 31, 2007
Due from a company in which director is Audit Fees 2,000,000 800,000
interested Maximum balance outstanding
96,605 96,605 Tax Audit Fees 300,000 200,000
during the year Rs 96,605/-(Previous year
Rs 96,605/-) Total 2,300,000 1,000,000
Due from a director of the Company
(Maximum balance outstanding during The above fees does not include Rs 4,494,400 (including service
852,173 2,109,767
the year Rs 3,151,231/-(Previous year Rs tax) towards services rendered for the initial public offer which
3,918,380/-)
has been considered as a share issue expense and set off against
14. Remuneration to Directors the balance available in Securities Premium account.

a. Managerial Remuneration to Whole time directors The company avails input credit for Service Tax and hence no
For the year For the year service tax expense was accrued during the year.
Particulars ended ended
March 31, 2008 March 31, 2007
Salary and Allowances 13,294,533 16,315,328 16. Employee Benefits:
Perquisites 510,500 -
The Company has adopted the Accounting Standard 15 (Revised
Contribution to Provident Fund 430,009 24 4,800
14,235,042 16,560,128 2005)- “Employee Benefits” with effect from
The above remuneration excludes gratuity and leave encashment April 1, 2007 the details of which are given below:
amounts as the same have been provided based on an actuarial
I. Defined Contribution Plans
valuation.
During the year, the Company has recognized the following
b. Managerial Remuneration to Non-whole time directors
amount in the Profit and Loss Account-
For the year For the year
Particulars ended ended For the year
March 31,2008 March 31, 2007 Particulars ended
Sitting fees * 1,228,237 - March 31, 2008
Commission 5,000,000 - Employers’ Contribution to Provident Fund 22,990,552 *
Stock Options 229,167 -
6,457,404 - * Included in Contribution to provident and other funds (Refer
* The above sitting fees include Rs 228,237 pertaining to the Schedule11)
financial year ended March 31, 2007 paid during the current II. Defined Benefit Plan
year ended March 31, 2008.
a. Defined Benefit Plan (Leave Encashment):
c. Computation of net profit in accordance with Section 349
In accordance with Accounting Standard 15 (Revised 2005) -
of the Companies Act,1956 and commission payable to
“Employee Benefits”, the transitional liability of Rs 16,167,298/-
directors:
in respect of unutilised leave salary existing as on April 01, 2007
For the year ended has been adjusted against opening balance of surplus in Profit &
Particulars
March 31, 2008
Profit before taxation 719,701,295 Loss account, net of deferred tax adjustment of Rs 5,438,000/-.
Add:
Managerial remuneration 20,692,446 Leave encashment benefit expensed in the Profit & Loss Account
Loss on Sale of assets 1,573,402 for the year was Rs.21,419,856/-. Such liability was hitherto
Provision for Doubtful Debts 53,386,174
74,456,803 calculated on estimated payout basis . However in the current
Less: year the liability was estimated on cost of compensated absences
Profit on Sale of investments 144,282
Excess Provision reversed back 2,473,410
and the impact being profits for the current year lower by
2,617,692 Rs.9,201,813/-.
Net Profit 792,735,625
Remuneration to whole time Directors: b) Contribution to Gratuity Fund:
Eligible under Section 309 79,273,562
Restricted to remuneration paid 14,235,042 In accordance with Accounting Standard 15 (Revised 2005) -
Commission to Non-whole-time directors
Eligible under Section 309 7,927,356 “Employee Benefits”, actuarial valuation as on March 31, 2008
Restricted to Commission Payable 5,000,000

67
was done in respect of the aforesaid defined benefit plan of Expenses recognized in the Profit & Loss Account:
Gratuity based on the following assumptions.
For the year
Particulars ended
For the year ended
Particulars March 31, 2008
March 31, 008
Discount Rate 8.25% p.a. Current Service Cost 2,299,991
Expected Rate of Return on Plan Assets 7.50% p.a. Past Service Cost -
10.0% p.a. for first 4 years
Salary Escalation Rate Interest Cost 382,536
& 7.0% p.a. thereafter
Expected Return on Plan Assets (166,067)
The estimates of rate of escalation in salary considered in actuarial
Actuarial (Losses) / Gain 3,088,874
valuation, take into account inflation, seniority, promotion and
Losses / (Gains) on “Curtailments & Settlements” -
other relevant factors including supply and demand in the
Total Expenses to be recognized in the
employment market. Profit & Loss Account 5,605,334

Change in Present Value of Obligation: This being the first year of adoption of Accounting Standard
For the year ended 15 (Revised 2005) - “Employee Benefits”, no comparative
Particulars
March 31, 2008 information and other disclosures relating to previous year have
Present Value of Obligation as at 1st Apr, 2007 4,924,492 been provided in this account.
Current Service Cost 2,299,991
Interest on Defined Benefit Obligation 382,536
17. Operating leases
Benefits Paid -
Net Actuarial Losses / (Gains) Recognized in Year 3,246,806 The Company is obligated under non-cancelable operating lease
Past Service Cost - for office space.
Losses / (Gains) on “Curtailments & Settlements” -
Closing Present Value of Obligations 10,853,825 Total rental expense and future lease payments under non-
cancelable operating lease for office space are as follows:
Change in the Fair Value of Assets:
For the year For the year
For the year ended Particulars ended ended
Particulars
March 31, 2008 March 31, 2008 March 31, 2007
Opening Fair Value of Plan Assets 1,820,521 Rental expense charged to
Expected Return on Plan Assets 166,067 Profit and Loss account 64,459,945 28,645,676
Actuarial Gains / (Losses) 157,932 Future lease payments
Assets Distributed on Settlements - Not later than 1 year 74,012,348 39,474,773
Contributions by Employer 5,090,974 Later than 1 year and not later than
Assets Acquired due to Acquisition - 5 years 200,990,737 172,933,887
Exchange Difference on Foreign Plans -
Benefits Paid - 18. Employee Stock Option Plans
Closing Fair Value of Plan Assets 7,235,494
a. During the year 2003-2004, the Company introduced
Reconciliation of Present Value of Defined Benefit Obligation and ‘OnMobile Employees Stock Option Plan – I 2003’ and
the Fair Value of plan assets: ‘OnMobile Employees Stock Option Plan – II 2003’ for
the benefit of the employees, as approved by the board
As at
Particulars
March 31, 2008 of directors in the meeting held on October 31, 2003 and
Closing Present Value of Funded Obligations 10,853,825 December 4, 2003 respectively and Extra Ordinary General
Closing Fair Value of Plan Assets (7,235,494) Meeting held on March 5, 2001 ,November 29, 2003 and
Closing Funded Status 3,618,331
December 30,2003 and the Company had appropriated
Unrecognized Actuarial (gains) / losses -
Unfunded Net Asset / (Liability) recognised in Balance Sheet - 1,026,000 and 114,000 equity shares of Rs.10/- each
respectively to be granted to the eligible employees. The
Amount recognized in the Balance Sheet:
options were granted at the discretion of the compensation
Particulars
As at committee at the exercise price determined by them. In
March 31, 2008
accordance with the terms of the stock option plans, 25% of
Closing Present value of obligations 10,853,825
Closing Fair Value of plan assets (7,234,494)
such Options granted would vest at the end of twelve (12)
Liability Recognised in the Balance Sheet 3,618,331 months from the date the Optionee becomes an employee
of the Company and the remaining 75% would vest at a rate

68
of 1/36th per month for the next thirty six (36) months from In accordance with ‘OnMobile Employees Stock Option Plan
the first Vesting. – II 2007’, approved by the compensation committee of the
Board on February 27, 2008, 65%, 30%, 3% and 2% of the
Numbers of options granted, exercised and forfeited during
options granted would vest at the end of one year, two years,
the year under the said scheme are given below:
three years and four years from the grant date, respectively.
For the year For the year
Particulars ended ended Details of options granted under the schemes discussed in Point b)
March 31,2008 March 31,2007 and c) above are given below:
Options granted outstanding at the beginning
130,113 1,060,376 For the For the year
of the year
Particulars year ended ended
Granted during the year 32,923 71,899 March 31,2008 March 31,2007
Options granted outstanding at the
Exercised during the year 23,188 972,681 - -
beginning of the year
Forfeited during the year 6,303 29,471 Granted during the year 1,253,101 -
Exercised during the year - -
Increase in the options consequent to issu- Forfeited during the year 43,563 -
ance of bonus shares as discussed in Note 4 1,602,540 - Options granted outstanding at the end
above 1,209,538 -
of the year
Options granted outstanding at the end of Weighted average remaining contractual
1,736,085 130,113 4.25 -
the year life (years)at the year end
Weighted average exercise price per
Rs 322.34 -
Grants outstanding which are vested as at option (after adjusting for Bonus issue)
Balance Sheet date including increase due to 599,079 937,774 Range of exercise price (after adjusting
Rs 210 to Rs 592 -
issuance of bonus shares for bonus issue)

b. During the year 2006-2007 the Company introduced The Company accounted the above options using the intrinsic
‘OnMobile Employees Stock Option Plan – III 2006’ vide value method and thus, the difference between the fair value
Board Resolution dated July 24, 2006 and Shareholders of the underlying shares in the year of grant and the options
Resolution dated July 24, 2006. A total of 61,567 options had exercise value was charged to the profit and loss account.
been appropriated to be granted to the eligible directors Accordingly, the compensation charge thereon in the current
and employees. The options to the directors were granted year is Rs.1,411,984/-.
at the discretion of the Board of Directors and the options The guidance note issued by the Institute of Chartered
to the employees were granted by compensation committee Accountants of India requires the disclosure of pro forma net
at the exercise price determined by them respectively. In results and EPS both basic & diluted, had the Company adopted
accordance with the terms of the stock option plans, 25% of the fair value method. Had the Company accounted the option
such Options granted would vest at the end of twelve (12) under fair value method, amortising the stock compensation
months from the date the Optionee becomes an employee/ expense thereon over the vesting period, the reported profit
director of the Company and the remaining 75% would vest for the year ended March 31, 2008 would have been lower by Rs.
at a rate of 1/36th per month for the next thirty six (36) 26,998,954/- and Basic and diluted EPS would have been revised
months from the first Vesting. to Rs. 9.4 and Rs 8.7 respectively as compared to Rs 9.9 and Rs
c. During the year 2007-2008, the Company introduced 9.2 without such impact.
‘OnMobile Employees Stock Option Plan – I and Plan-II 2007’ The fair value of stock based awards to employees is calculated
vide Board Resolution dated July 12, 2007 and Shareholders through the use of option pricing models, requiring subjective
Resolution dated August 17, 2007. A total of 975,000 and assumptions which greatly affect the calculated values. The said
74,360 options respectively have been appropriated to be fair value of the options have been calculated using Black-Scholes
granted to the eligible employees. option pricing model, considering the expected term of the
In accordance with the terms of ‘OnMobile Employees Stock options to be 4.8 years, an expected dividend rate of 1% on
Option Plan – I 2007’, 25% of the Options granted would the underlying equity shares, volatility in the share price ranges
vest at the end of twelve (12) months from the date of the from 21% to 59% and a risk free rate of 8%. The Company’s
grant and the remaining 75% would vest at a rate of 1/36th calculations are based on a single option valuation approach, and
per month for the next thirty six (36) months from the first forfeitures are recognized as they occur. The expected volatility
Vesting. is based on historical volatility of the share price during the year
after eliminating the abnormal price fluctuations.

69
19. Segment Reporting:
The Company is engaged in providing value added services in telecom business globally and is considered to constitute a single segment
in the context of primary segment reporting as prescribed by Accounting Standard 17 - “Segment Reporting”.

The secondary segment is identified to geographical locations and the company’s significant operations constituting more than 90% of the
total operations are carried out of India. Details of secondary segment by geographical locations are given below:-
For the year ended For the year ended
Particulars
March 31, 2008 March 31, 2007
I Revenue (by location of customer)
In India 2,212,380,050 1,275,848,381
Outside India 95,257,383 27,301,320
II Total carrying amount of Segmental Assets, by geographical location
In India 3,229,345,282 1091,714,973
Outside India 86,243,788 12,492,670
III Cost incurred for purchase of tangible & intangible assets, by geographical location
In India 810,935,007 254,119,215
Outside India 12,002,303 -

20. Transactions with related parties


I. List of Related parties and relationship:
Sl
Relationship Related parties
No
(i) Controlling Enterprises
Holding Company OnMobile Systems Inc., USA (upto February 18, 2008)
Associate Company OnMobile Systems Inc., USA (w.e.f from February 19, 2008)
Subsidiaries OnMobile Singapore Pte. Ltd.
OnMobile Australia Pty. Ltd.
PT OnMobile Indonesia (w.e.f. August 23, 2007)
Vox Mobili S.A (w.e.f. September 10, 2007)
Phonetize Solutions Private Limited (w.e.f. May 14, 2007)
Ver se Innovation India Private Limited (w.e.f. October 26, 2007)
(ii) Other related parties with whom the Company had transactions
Key Management Personnel Arvind Rao
Chandramouli Janakiraman

Amount in Rs
Key Management
Holding Company Subsidiary Companies Associate Company Total
Sl Personnel
Nature of transactions
No March March March March March March March March March March
31,2008 31,2007 31,2008 31,2007 31,2008 31,2007 31,2008 31,2007 31,2008 31,2007
1 Income from services
OnMobile Singapore Pte.
Ltd. - - 33,362,408 2,568,621 - - - - 33,362,408 2,568,621
OnMobile Australia Pty.
Ltd. - - 5,647,620 13,863,098 - - - - 5,647,620 13,863,098
Total - - 39,010,028 16,431,719 - - - - 39,010,028 16,431,719
Business Development
2 expenses
OnMobile Singapore Pte.
Ltd. - - 14,249,383 7,383,345 - - - - 4,249,383 7,383,345
OnMobile Australia Pty.
Ltd. - - 6,728,281 16,362,753 - - - - 6,728,281 16,362,753

PT OnMobile Indonesia - - 11,250,000 - - - - - 11,250,000 -


Total - - 32,227,664 23,746,098 - - - - 32,227,664 23,746,098
3 Remuneration
Arvind Rao - - - - - - 8,845,672 13,849,126 8,845,672 13,849,126
Chandramouli
Janakiraman - - - - - - 5,389,370 2,711,002 5,389,370 2,711,002
Total - - - - - - 14,235,042 16,560,128 14,235,042 16,560,128

70
Key Management
Holding Company Subsidiary Companies Associate Company Total
Sl Personnel
Nature of transactions
No March March March March March March March March March March
31,2008 31,2007 31,2008 31,2007 31,2008 31,2007 31,2008 31,2007 31,2008 31,2007
4 Interest Income
OnMobile Singapore
Pte. Ltd - - 54,792 55,480 - - - - 54,792 55,480
PT OnMobile Indonesia - - 175,886 - - - - - 175,886 -
Total - - 230,678 55,480 - - - - 230,678 55,480
OnMobile Singapore Pte.
Ltd. - - - 1,433,094 - - - - - 1,433,094
OnMobile Australia Pty.
Ltd. - - 7,035,516 6,673,349 - - - - 7,035,516 6,673,349

PT OnMobile Indonesia - - 10,783,400 - - - - - 10,783,400 -

OnMobile Systems Inc. - 73,285,441 - - 1,007,019,813 - - - 1,007,019,813 73,285,441


Total - 73,285,441 17,818,916 8,106,443 1,007,019,813 - - - 1,024,838,729 81,391,884
5 Amount Receivable
A Loan
OnMobile Singapore
Pte. Ltd - - 1,428,150 1,388,415 - - - - 1,428,150 1,388,415
PT OnMobile Indonesia - - 6,003,696 - - - - - 6,003,696 -
B Accrued interest
OnMobile Singapore
Pte. Ltd - - 163,140 55,480 - - - - 163,140 55,480
PT OnMobile Indonesia - - 140,390 - - - - - 140,390 -
C Other Advances
Arvind Rao - - - - - - 852,173 2,096,736 852,173 2,096,736
Chandramouli
Janakiraman - - - - - - - 13,031 - 13,031
OnMobile Singapore
Pte. Ltd - - 1,642,280 - - - - - 1,642,280 -
PT OnMobile Indonesia - - 762,391 - - - - - 762,391 -
D Sundry Debtors
OnMobile Singapore Pte.
Ltd. - - 24,793,508 2,435,017 - - - - 24,793,508 2,435,017
OnMobile Australia Pty.
Ltd. - - 5,796,946 7,831,248 - - - - 5,796,946 7,831,248
Total - - 40,730,501 11,710,160 - - 852,173 2,109,767 41,582,674 13,819,927
Notes:
1. Related party relationships are as identified by the Company on the basis of information available and accepted by the auditors.
2. No amount has been written off or written back during the year in respect of debts due from or to related party.

21. Earnings per Share For the year For the year
ended ended
The earnings per share, computed as per the requirements of March 31, March 31,
Accounting Standard 20 –“Earnings per Share” is as under: 2008 Rs. 2007 Rs.
Nominal value of equity shares 10.00 10.00
For the year For the year Earnings Per Share
ended ended
Particulars Basic 10 12
March 31, March 31,
2008 2007 Diluted 9 7
Profit after tax as per the Profit & Loss Account 475,680,336 330,371,970
Note: Consequent to issuance of bonus shares as discussed in
Weighted Average number of Shares for Basic
47,916,994 26,634,907 Note 4 above, the calculation of basic and diluted earnings per
EPS
Add: Effect of Convertible Preference Shares and
3,942,651 22,338,870
share has been adjusted for the increase in the number of equity
Stock Options outstanding
shares outstanding as a result of the issuance of bonus equity
Weighted Average Number of equity shares for
diluted EPS 51,859,645 48,973,777 shares, for all the years presented.

71
22. Accounting For Taxes On Income
In accordance with the Accounting Standard 22 – “Accounting for Taxes on Income”, the Company has created a deferred tax liability to
the extent of Rs. 15,040,620/- for the current year, which has been debited to the Profit & Loss account. Details of Deferred Tax Asset
and Liabilities are:
Deferred Tax (Assets)/
Deferred Tax (Assets)/ Li- Current year
Particulars Adjustment Liabilities as on March
abilities as on April 1, 2007 (credit)/charge
31, 2008
Difference between book & tax depreciation 33,533,000 Nil 32,126,000 65,659,000
Others (Provision for gratuity, leave encashment etc.,) (3,872,000) (5,438,000) (17,085,380) (26,395,380)
Deferred Tax (ITfinity) at the time of Amalgamation Nil 200,100 Nil 200,100
Total 29,661,000 (5,237,900) 15,040,620 39,463,720

Out of the above credit Rs 5,438,000/- has been credited to the General reserve on account of transitional provisions as per revised
Accounting Standard 15-“ Employee Benefits” (Revised 2005).

23. Provision for taxation includes tax liabilities in India on the Company’s global income as reduced by exempted income and any tax liabilities
arising overseas on income sourced from those countries.

24. The details of Provisions under Accounting Standard 29 - “Provisions, Contingent liabilities and Contingent assets” is as under:-
Probable
Provision Provision made Provision Provision outstanding
outflow Provision utilized
Sl. No. Nature of Expense outstanding as at during reversed during as at
estimated during the year
April 1, 2007 the year the year March 31, 2008
within
1 Other provisions-
warranties &
customer credits 3 years 34,897,203 188,963,416 144,185,499 2,473,410 77,201,710

25. Disclosure on Derivative Instruments


There are no outstanding forward exchange contracts entered into by the company as at March 31, 2008. Foreign currency exposure as
at March 31, 2008 that have not been hedged by derivative instrument or otherwise is as follows:
As at As at As at As at
Particulars March 31, 2008 March 31, 2007 March 31, 2008 March 31, 2007
Amount (Rs.) Amount (Rs.) Amount (Foreign Currency) Amount (Foreign Currency)
Due from:
Debtors against export of services/goods 21,193,429 1,132,474 USD 532,296 USD 28,495
24,880,226 2,435,017 SGD 860,700 SGD 89,474
11,768,419 7,831,248 AUD 320,554 AUD 225,210
6,003,397 - BDT 10,215,950 -
630,420 - EUR 10,000 -
Against loan 1,591,290 1,443,895 SGD 55,072 SGD 53,963
6,144,086 - USD 153,994 -
Against advances 1,642,280 - SGD 56,813 -
2,630,696 - USD 65,932 -
762,391 - IDR 177,574,876 -
Due to:
Creditors against import of goods and services 7,035,516 6,673,349 AUD 192,129 AUD 178,229
10,783,400 - IDR 2,452,549,669 -
- 1,433,094 - SGD 56,241
74,697,145 73,285,441 USD 1,872,109 USD 1,674,713
Voxmobili Payable 278,636,800 - EUR 4,420,000 -

26. During the year ,the Company has circulated request to all suppliers to confirm their status under the Micro, Small and Medium
Enterprises Development Act, 2006 and despite regular follow up the Company has not received confirmations from any of the suppliers
and hence disclosures relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been
given.

72
27. Quantitative Details
The Company is engaged in the development and maintenance of computer software. The production and sale of such software cannot be
expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and certain information as required under
paragraphs 3 and 4C of part II of Schedule VI of the Companies Act, 1956. Further there are no traded goods during the year.

28. Value of imports calculated on CIF basis


For the year ended For the year ended
Particulars
March 31, 2008 March 31, 2007
Capital goods (including software downloads) 283,490,219 22,424,135

29. Expenditure in Foreign Currency


For the year ended For the year ended
Particulars
March 31, 2008 March 31, 2007
Business Development Expenses 32,227,664 23,746,098
Travel 13,022,658 3,162,176
Content Cost 6,185,172 -
Software and Software development charges 4,562,699 -
Annual maintenance charges 11,705,855 -
Legal and Professional 24,599,563 1,666,453
Pre-issue expenses (charged to Securities Premium account) 21,424,936 -
Others 2,835,540 -
Total 1,16,564,087 28,574,727

30. Earnings in Foreign Currency


For the year ended For the year ended
Particulars
March 31, 2008 March 31, 2007
Master Services/Professional Services 95,257,383 27,301,320

31. Previous year’s figures have been regrouped/reclassified wherever necessary.


Signatures to Schedule 1 to 15

Arvind Rao Chandramouli J


Chief Executive Officer Director
and Managing Director

D Srikiran Rajesh Moorti


Company Secretary Chief Financial Officer

Place: Bangalore
Date: April 30, 2008

73
Balance Sheet abstract
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
I REGISTRATION DETAILS
Registration Number 27860
State Code 08
Balance Sheet Date 31-03-08
II CAPITAL RAISED DURING THE YEAR (RUPEES IN THOUSANDS)
Public Issue 3,789,876,640
Rights Issue N.A
Bonus Issue 450,303,940
Private Placement -
Preferential offer of shares under Employee Stock Option Plan Scheme(s)* 301,444
III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (RUPEES IN THOUSANDS)
Total Liabilites 6,258,172,049
Total Assets 6,258,172,049
Source of Funds
Paid up Capital 574,061,390
Reserves & Surplus 5,364,598,155
Secured Loans -
Unsecured Loans -
Application of Funds
Net Fixed Assets 889,453,418
Capital Work-in-Progress (including Capital Advances)
Investments 4,610,749,991
Deferred Tax Assessment
Net Current Assets 757,968,640
Miscellaneous Expenditure -
Accumulated Losses -
IV PERFORMANCE OF COMPANY (RUPEES IN THOUSANDS)
Turnover 2,307,637,433
Total Expenditure 1,656,791,094
Profit/(Loss) Before Tax 719,701,295
Profit/(Loss) After Tax 475,680,336
Earnings per share (Rupees) 9
Dividend Rate % N.A
V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY
(AS PER MONETARY TERMS)
Production Description Item Code No.
Software Development. 85243111

* Issue of shares arising on the exercise of option granted to employees under Company’s ESOP Plan - I, 2003 and adjustment of bonus issue of 12 equity shares for every 1 equity share held.

74
Auditors’ Report
TO THE BOARD OF DIRECTORS’ ON THE 5. On the basis of the information and explanation given to us and
CONSOLIDATED FINANCIAL STATEMENTS OF on the consideration of the separate audit reports on individual
ONMOBILE GLOBAL LIMITED AND ITS SUBSIDIARIES financial statements and on the other financial information of the
components of the Company and its subsidiaries, we are of the
1. We have audited the attached Consolidated Balance Sheet of
opinion that the attached consolidated financial statements give
OnMobile Global Limited (formerly OnMobile Asia
a true and fair view in conformity with the accounting principles
Pacific Private limited) (“the Company”) and it’s subsidiaries
generally accepted in India:
(“the group”) as at March 31, 2008; the Consolidated Profit and
Loss Account and the Consolidated Cash Flow Statement for the a. in the case of the consolidated balance sheet, of the state of
year then ended, both annexed thereto.These financial statements affairs of the Group as at March 31, 2008; and
are the responsibility of the Management of the Company and
b. in the case of the consolidated profit and loss account, of the
have been prepared by the management on the basis of separate
consolidated results of operations of the group for the year
financial statements and other financial information regarding
then ended.
components. Our responsibility is to express an opinion on
these financial statements based on our audit. c. in the case of the consolidated cash flow statement, of the
consolidated cash flows of the group for the year then
2. We conducted our audit in accordance with auditing standards
ended.
generally accepted in India.Those Standards require that we plan
and perform the audit to obtain reasonable assurance whether For Deloitte Haskins & Sells
the financial statements are free of material misstatement. An Chartered Accountants
audit includes examining, on a test basis, evidence supporting V. Srikumar
the amounts and disclosures in the financial statements. An Place: Bangalore Partner
audit also includes assessing the accounting principles used and Date: May 02,2008 Membership No. 84494
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

3. We did not audit the financial statements of subsidiaries as at


March 31, 2008, whose financial statements reflect total assets
of Rs. 436,038,257 and total revenues of Rs.383,383,825 and net
cash outflows of Rs. 17,349,648 for year ended on that date.
These financial statements and other financial information has
been audited by the other auditors whose reports have been
furnished to us, and our opinion is based solely on the report of
the other auditors.

4. We report that the consolidated financial statements have been


prepared by the Company in accordance with the requirements of
Accounting Standard (AS) 21, Consolidated Financial Statements,
notified by the Companies (Accounting Standard) Rules, 2006
and on the basis of the separate audited financial statements of
the Company and its subsidiaries included in the consolidated
financial statements.

75
Consolidated Balance Sheet as at March 31, 2008
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
Sch As at March 31, 2008 As at March 31, 2007
Particulars
No. Rs. Rs.
I SOURCES OF FUNDS
Shareholders’ Funds
Share Capital 1 574,061,390 36,538,360
Stock Options Outstanding Account 1,411,983 -
Reserves & Surplus 2 5,535,483,327 1,990,239,662
Minority Interest - 13,864,047
Deferred Payment Liability 278,636,800 -
(Refer Note B (9) Of Schedule 15)
Deferred Tax Liability (Net) 39,252,511 29,861,100
TOTAL 6,428,846,011 2,070,503,169

II APPLICATION OF FUNDS
Goodwill On Consolidation 1,367,929,687 204,810,086
Fixed Assets 3
Gross Block 1,335,210,118 580,648,387
Less : Accumulated Depreciation 539,867,583 288,446,602
Net Block 795,342,535 292,201,785
Add: Capital Work In Progress 113,385,669 908,728,204 42,871,981 335,073,766

Investments 4 3,193,700,565 1,018,152,757


Current Assets, Loans and Advances
Project Work In Progress 10,605,803 -
Sundry Debtors 5 989,726,289 539,276,664
Cash and Bank Balances 6 1,458,839,603 211,605,239
Other Current Assets 7 12,536,985 5,384,917
Loans and Advances 8 947,356,669 479,052,490
3,419,065,349 1,235,319,310
Less: Current Liabilities and Provisions 9
Current Liabilities 1,739,129,303 297,951,607
Provisions 721,448,491 424,901,143
2,460,577,794 722,852,750
Net Current Assets 958,487,555 512,466,560
TOTAL 6,428,846,011 2,070,503,169

Significant Accounting Policies and Notes On Accounts 15

The Schedules referred to above and the notes thereon form an integral part of the Balance Sheet
As per our report of even date attached

Deloitte Haskins & Sells Arvind Rao Chandramouli J


Chartered Accountants Chief Executive Officer and Director
Managing Director

V. Srikumar D Srikiran Rajesh Moorti


Partner Company Secretary Chief Financial Officer
Place: Bangalore Place: Bangalore
Date: May 02, 2008 Date: April 30, 2008

76
Consolidated Profit & Loss Account for the year ended March 31, 2008
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
For the year ended For the year ended
Sch
Particulars March 31, 2008 March 31, 2007
No.
Rs. Rs.
INCOME
Telecom Value Added Services 2,459,475,367 1,280,591,255
Software Development 146,048,882 11,745,784
Software Licence Fee - 13,500,000
Other Services 12,640,564 23,879,822
Net Revenue 2,618,164,813 1,329,716,861

EXPENDITURE
Cost of Sales and Services 10 388,243,105 237,221,204
Manpower Costs 11 641,992,764 270,461,340
Administration and Other Expenses 12 539,573,046 212,137,988
Total Operating Expenses 1,569,808,915 719,820,531

Earnings before other income, depreciation, finance charges and tax 1,048,355,898 609,896,329

Other Income 13 74,684,946 43,408,159


Depreciation 3 255,635,746 142,926,327

Earnings before finance charges and tax 867,405,098 510,378,162


Finance Charges 14 17,093,143 160,603

Earnings before tax 850,311,955 510,217,559


Provision for taxation
- current tax (Note B (20) of Schedule 15) 214,463,640 154,990,203
- relating to earlier year 6,900,000 -
- deferred tax (Note B (19) of Schedule 15) 14,829,411 6,379,575
- fringe benefit tax 11,023,482 6,139,899

Earnings after tax 603,095,422 342,707,882

Share of Profit of Minority Interest - 5,511,930


Earnings after Tax after Minority Interest 603,095,422 337,195,952
Balance brought forward from previous year 756,179,596 422,983,644
1,359,275,018 760,179,596
Transfer to General Reserve - 4,000,000
Loss transferred on Amalgamation (Note B(8) of Schedule 15) (21,626,130) -
Provision for leave encashment (net of deferred tax) Note B (13) of Schedule 15) (10,729,298) -
Transfer to capital redemption reserve (90,980) -
Balance carried forward to Balance sheet 1,326,828,610 756,179,596

Basic & Diluted Earnings Per Share (Note B (18) of Schedule 15)
- Earnings per share (Basic) (Face value of equity share of Rs. 10/- each) 13 13
- Earnings per share (Diluted) (Face value of equity share of Rs. 10/- each) 12 7

Significant Accounting Policies and Notes On Accounts 15

The Schedules referred to above and the notes thereon form an integral part of the Profit and Loss Account.
As per our report of even date attached

Deloitte Haskins & Sells Arvind Rao Chandramouli J


Chartered Accountants Chief Executive Officer and Director
Managing Director

V. Srikumar D Srikiran Rajesh Moorti


Partner Company Secretary Chief Financial Officer
Place: Bangalore Place: Bangalore
Date: May 02, 2008 Date: April 30, 2008

77
Consolidated Cash Flow Statement for the year ended March 31, 2008
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
For the year ended For the year ended
Particulars March 31, 2008 March 31, 2007
Rs. Rs.
CASH FLOW FROM OPERATING ACTIVITIES
Earnings before taxation 850,311,955 510,217,559
Depreciation and amortisation 255,635,745 142,926,327
Interest income (9,748,107) (6,609,688)
Accrued Yield on investments (56,717,646) (34,943,953)
Excess Provision reversed (2,473,410) -
(Profit)/ Loss on sale of assets 1,573,402 (10,101)
Provision for Doubtful Debts 53,386,174 -
Profit on redemption of investments (144,282) (15,282)
Unrealised foreign exchange gain / loss 50,894,375 -
Preliminary expenses written off 42,878 (23,396)
Finance charges 17,093,143 309,542,272 160,603 101,484,511

Changes in current assets and liabilities


Sundry debtors (418,370,697) (184,240,126)
Loans and advances (141,000,806) (16,493,367)
Current liabilities and provisions 254,194,500 (305,177,003) 148,393,207 (52,340,286)

Income taxes,TDS and FBT paid during the year (305,015,128) (211,400,503)
Net cash generated from operating activities (A) 549,662,096 347,961,281

CASH FLOW FROM INVESTING ACTIVITIES


Purchase of fixed assets and change in Capital work-in-progress (836,211,262) (263,608,924)
Proceeds from sale of fixed assets 9,070,993 10,101
Investment in subsidiaries (1,064,473,522) -
Payment towards Deferred Liability (2,504,361) -
Sale/ (Purchase) of securities (net) (2,158,602,928) (1,192,519,709)
Interest income 9,748,107 6,609,688
Yield on investments 44,180,661 (3,998,792,312) 34,943,953 (1,414,564,891)
Net cash used in investing activities (B)

CASH FLOW FROM FINANCING ACTIVITIES


Proceeds from issuance of share capital 3,793,814,990 1,225,266,870
Offer for sale payable to OMSI (net of reimbursement of expenses) 992,710,227 -
Share Issue Expense (72,450,288) -
Redemption of preference shares (33,043,936) -
Proceeds from short term borrowings 350,000,000 -
Repayment of short term borrowings (350,000,000) -
Finance charges (17,093,143) 4,663,937,850 (160,603) 1,225,106,267
Net cash used in financing activities (C)

NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS


1,214,807,634 158,502,656
(A + B + C)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 211,605,239 53,102,583
Cash acquired on acquisition of Ver se Innovation Private Limited 4,623,413 -
Cash acquired on acquisition of Voxmobili S A 27,803,317 -
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 1,458,839,603 211,605,239
Notes:
1. The above Cash Flow Statement has been prepared under the “indirect method” as set out in the Accounting Standard 3 - “Cash flow statements”.
2. Cash & Cash Equivalents include deposits of Rs. 264,486,557/- (March 31, 2007 : 97,780,169/-) the use of which was restricted.
3. Cash & Cash Equivalents include unrealised foreign exchange loss of Rs. 13,468 /- (March 31, 2007 - Rs. 322,458/- ).

As per our report of even date attached


Deloitte Haskins & Sells Arvind Rao Chandramouli J
Chartered Accountants Chief Executive Officer and Director
Managing Director

V. Srikumar D Srikiran Rajesh Moorti


Partner Company Secretary Chief Financial Officer
Place: Bangalore Place: Bangalore
Date: May 02, 2008 Date: April 30, 2008

78
Schedules forming part of the Consolidated Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
As at March 31, 2008 As at March 31, 2007
Particulars
Rs. Rs.
1. SHARE CAPITAL
Authorised
74,500,000 ( at March 31, 2007 - 4,500,000) Equity Shares of Rs. 10 each 745,000,000 45,000,000
500,000 ( at March 31, 2007 – 500,000) Preference Shares of Rs. 10 each 5,000,000 5,000,000
750,000,000 50,000,000

Issued, Subscribed and Paid Up


57,406,139 ( at March 31, 2007 – 3,300,207) Equity Shares of Rs. 10 each, fully paid up 574,061,390 33,002,070
Nil ( at March 31, 2007 – 353,629) Preference Shares of Rs. 10 each, fully paid up - 3,536,290
574,061,390 36,538,360
Notes:-
1) 27,446,008 ( at March 31, 2007 – 2,287,169) Equity Shares are held by the erstwhile Holding Company OnMobile Systems Inc., USA (formerly Onscan Inc.,USA).
2) 567,749 Equity Shares ( at March 31, 2007 – 5,068) were issued to erstwhile shareholders of ITfinity Solutions Private Limited at the time of amalgamation (inclu-
sive of 524,076 bonus shares).
3) During the year the Company has made a bonus issue in the ratio of 12 : 1 to the shareholders by capitalisation of Capital Redemption Reserve and Securities
Premium Account (Refer Note B (4) of the Schedule 15)
4) 423,722 Equity Shares have been issued to the promoters and employee of Vox Mobili ,SA France as a part of Purchase consideration for its acquisition [inclusive
of 391,128 bonus shares].
5) Preference shares issued during 2006-07 with rights to dividend ranking pari passu with the equity shares being convertible at any time on or or before the occur-
rence of the intial public offer or on liquidity event as defined in the investors agreement, have been partly redeemed and the balance converted into equity shares of
Rs 10 each fully paid up during the year. (Refer note B 8(c) in Schedule 15)
6) On February 19, 2008 the Company allotted 8,613,356 equity shares of Rs 10 each under an Initial Public Offer (IPO).

2. RESERVES AND SURPLUS


Securities Premium account
Opening Balance 1,230,060,066 -
Add: Received during the year 4,042,947,452 1,310,457,014
Less: Share issue expenses 245,804,675 80,396,948
Less: Goodwill on Amalgamation Adjusted (Refer Note B(8 (a)) of Schedule 15) 358,515,640 -
Less: Redemption of Preference Shares (Refer Note B (8 (c)) of Schedule 15) 32,952,956 -
Less: Utilised towards bonus issue 450,303,940 4,185,430,307 - 1,230,060,066

General reserve
Opening Balance 4,000,000 -
Add: Received during the year - 4,000,000
Less: Adjusted on Amalgamation ((Note B(8) of Schedule 15) 4,000,000 - - 4,000,000

Capital Redemption Reserve


Opening Balance - -
Add: Additions during the year 90,980 -
Less: Utilised towards bonus issue 90,980 - - -

Foreign Currency Translation Reserve 23,224,411 -

Profit and Loss Account 1,326,828,610 756,179,596


5,535,483,327 1,990,239,662

79
Schedules forming part of the Consolidated Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
3. FIXED ASSETS Amount in Rs.
Gross Block Accumulated Depreciation Net Block

Particulars Adjustment Additions Deletions Adjustment Deletions As at As at As at


As at As at As at
on acquisi- during the during the on acquisi- For the year Adjustments during the March 31, March 31, March 31,
April 1, 2007 March 31, 2008 April 1, 2007
tion year year tion year 2008 2008 2007

Tangible Assets

Leasehold improvements - - 34,460,529 - 34,460,529 - - 3,397,903 - - 3,397,903 31,062,626 -

Building - - 105,224,022 - 105,224,022 - - 1,150,973 - - 1,150,973 104,073,049 -

Office Equipment 1,751,601 2,133,467 47,099 25,013 3,907,154 1,499,074 754,845 104,164 174,518 16,777 2,515,824 1,391,330 252,528

Computer & Electronic equipment 421,181,896 8,278,061 560,659,195 23,909,642 966,209,510 167,959,556 6,105,232 218,677,091 117,664 12,372,373 380,487,171 585,722,339 253,222,340

Furniture & Fixtures 1,172,471 889,177 11,143,585 - 13,205,233 286,558 534,179 1,606,903 91,266 - 2,518,906 10,686,327 885,913

Motor Cars 1,274,367 - 10,094,462 - 11,368,829 877,686 - 2,804,017 396,681 - 4,078,384 7,290,445 396,681

Total 425,380,335 11,300,705 721,628,892 23,934,655 1,134,375,276 170,622,874 7,394,255 227,741,052 780,129 12,389,149 394,149,161 740,226,116 254,757,461

Intangible Assets

80
Software 155,268,052 - 45,287,531 - 200,555,583 117,823,729 - 27,894,694 - - 145,718,422 54,837,161 37,444,323

Intangible Assets - - 279,259 - 279,259 - - - - - - 279,259 -

Total 155,268,052 - 45,566,790 - 200,834,842 117,823,729 - 27,894,694 - - 145,718,422 55,116,419 37,444,323

GRAND TOTAL 580,648,387 11,300,705 767,195,681 23,934,655 1,335,210,118 288,446,602 7,394,255 255,635,746 780,129 12,389,149 539,867,583 795,342,535 292,201,785

Previous year 356,012,928 4,091,016 220,736,943 192,500 580,648,387 142,998,877 2,713,897 142,926,327 - 192,500 288,446,602 292,201,785

Note: Fixed Assets do not include assets aggregating to Rs. 27,050,959/- (at March 31, 2007 Rs. 27,050,959/-) received on loan basis from the erstwhile Holding Company.
Schedules forming part of the Consolidated Balance Sheet
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
As at March 31, 2008 As at March 31, 2007
Particulars
Rs. Rs.
4. INVESTMENTS
Current Investments
Mutual Funds 3,156,952,699 1,018,152,756
Others 36,747,865 -
Refer to Note B(12) of Schedule 15 for details of purchase and sale of investments during the year
3,193,700,565 1,018,152,757

5. SUNDRY DEBTORS (Unsecured)


Debts outstanding for a period exceeding six months
Considered good 196,217,114 33,929,550
Considered doubtful 34,751,313 2,662,125

Other debts
Considered good 474,848,880 337,552,415
Considered doubtful 18,634,861 -
Unbilled Revenue 318,660,294 167,794,699
1,043,112,462 541,938,789
Less: Provision for Doubtful Debts 53,386,174 2,662,125
989,726,289 539,276,664

6. CASH AND BANK BALANCES


Cash on hand 229,746 195,028
Cheques on hand 89,000 182,085
Balances with scheduled banks:
- In current account 1,436,779,891 107,768,204
- In deposit account 13,990,544 103,459,922
With other banks (non scheduled banks) 7,750,423 -
1,458,839,603 211,605,239

7. OTHER CURRENT ASSETS


Accrued Dividend 12,536,985 5,384,918
12,536,985 5,384,918

8. LOANS AND ADVANCES (Unsecured, considered good)


Advances recoverable in cash or in kind or for value to be received 90,884,099 20,608,762
Other Deposits 154,979,422 51,954,622
Advance income tax & tax deducted at source 701,493,148 406,489,106
947,356,669 479,052,490

9. CURRENT LIABILITIES & PROVISIONS


Current liabilities:
Sundry creditors
- for capital items-due to erstwhile Holding Company 66,821,049 73,285,442
- for capital items- due to others 37,463,911 41,975,313
- for expenses 543,228,468 129,185,892
Due to erstwhile Holding Company * 940,198,764 -
Share Application money (Refer Note B (3) of Schedule 15) 3,796,470 -
Deferred revenue 11,657,212 1,079,825
Other liabilities 135,963,430 52,425,135
1,739,129,303 297,951,607
Note:
*Amount due to the erstwhile Holding Company is amount payable to OnMobile Systems Inc towards Offer for Sale of 2,287,189 equity shares at the rate of Rs
440/- per share net of its share in the preissue expenses to the extent of Rs 66,164,396.
Provisions:
Income Tax 594,137,973 376,691,692
Fringe Benefit Tax (Net)* 174,949 3,247,626
Employee Benefits 49,933,859 10,064,622
Other Provisions 77,201,710 34,897,203
* Net of advance FBT paid Rs 20,494,789/- ( at March 31, 2007 – Rs. 5,517,154/-) 721,448,491 424,901,143

81
Schedules forming part of the Consolidated Profit & Loss Account
ONMOBILE GLOBAL LIMITED
(formerly OnMobile Asia Pacific Private Limited)
For the year ended For the year ended
Particulars
March 31, 2008 Rs. March 31, 2007 Rs.
10. COST OF SALES AND SERVICES
Content fee and Royalty 231,780,996 187,718,339
Cost of hardware and software development charges 156,462,109 49,502,865
388,243,105 237,221,204

11. MANPOWER COST


Salaries, wages and bonus 529,340,085 241,555,567
Contribution to provident fund and other funds 87,878,488 17,451,781
Workmen and staff welfare expenses 19,011,056 7,804,394
Employee Insurance 5,763,135 3,649,598
641,992,764 270,461,340

12. ADMINISTRATION AND OTHER EXPENSES


Power and Fuel 12,291,256 6,038,785
Rent 79,278,879 35,142,908
Repairs 14,757,769 3,223,818
Office maintenance 27,394,132 18,185,384
Rates and taxes 7,386,431 835,481
Printing and stationery 3,255,690 1,599,350
Postage, courier and octroi 3,575,497 1,302,829
Communication charges 56,671,011 27,490,449
Training and Recruitment expenses 19,776,556 9,824,250
Travelling and conveyance 90,189,238 45,679,753
Legal, professional & consultancy charges 75,462,575 28,185,406
Commission to non whole time directors 5,000,000 -
Remuneration to auditors 2,300,000 1,000,000
Marketing expenses 41,825,520 22,960,213
Provision for Doubtful Debts 53,386,174 2,662,125
Brokerage and Commission 5,922,858 5,039,720
Bank charges 5,577,904 675,735
Miscellaneous expenses 2,180,223 2,291,781
Loss on Sale of Assets 1,573,402 -
Exchange loss 31,767,931 -
539,573,046 212,137,988

13. OTHER INCOME


Interest :
- from deposits with banks 9,748,107 6,609,688
(Tax deducted at source Rs 1,623,246/-, at March 31, 2007 – Rs 253,485/-)
Accrued dividend on investment 56,717,646 34,943,953
Profit on sale of Assets - 10,101
Profit on redemption of investments 144,282 15,282
Excess Provision reversed 2,473,410 -
Exchange Gain 1,472,219 1,822,085
Other Income 4,129,283 7,051
74,684,946 43,408,159

14. FINANCE CHARGES


Interest on Short term loan 17,093,143 160,603
17,093,143 160,603

82
Schedules to the Consolidated Financial Statements for the year ended
March 31, 2008
ONMOBILE GLOBAL LIMITED The consolidation for the year includes figures of PT OnMobile
(formerly OnMobile Asia Pacific Private Limited) Indonesia formed during the year and of Voxmobili SA,Voxmobili
Inc. and Ver se Innovation Private Limited, which were acquired
15. SIGNIFICANT ACCOUNTING POLICIES during the year. Erstwhile subsidiary, ITfinity Solutions Private
AND NOTES ON ACCOUNTS Limited has been amalgamated into the Company w. e. f May 14,
2007 with the appointment date April 1, 2006 (refer note B(8)
A. SIGNIFICANT ACCOUNTING POLICIES
in this schedule). Loses incurred by Ver se Innovation Private
1. Basis of preparation of financial statements Ltd over the minority shareholders paid up capital has been
absorbed by the Company. Hence previous year figures are not
The Consolidated Financial statements relate to OnMobile
comparable.
Global Limited (formerly OnMobile Asia Pacific Private Limited)
(the Company) and its subsidiaries. 3. Use of Estimates
The Consolidated financial statements are prepared under the The preparation of the financial statements in conformity with
historical cost convention, on the accrual basis of accounting, GAAP requires that the management makes estimates and
in accordance with Indian Generally Accepted Accounting assumptions that affect the reported amounts of assets and
Principles (“GAAP”). GAAP comprises mandatory Accounting liabilities, disclosure of contingent liabilities as at the date of the
Standards prescribed by the Company Accounting Standards financial statements and the reported amounts of revenue and
Rules, 2006. The Management evaluates all recently issued or expenses during the reported period. Examples of such estimates
revised Accounting Standards on an ongoing basis. includes provision for doubtful debts, future obligations under
employee benefit plans, income taxes and the useful lives of
2. Principle of consolidation
fixed assets. Contingencies are recorded when it is probable
The financial statements of the Company and its subsidiaries that a liability will be incurred, and the amount can be reliably
after making adjustments for uniform accounting policies have estimated. When no reliable estimate can be made, a disclosure
been combined on a line by line basis by adding together like is made as contingent liability.
items of assets, liabilities, income and expense. The intra-group
Actual results could differ from those estimates.
balances and intra-group transactions are eliminated.

The excess of cost to the Company of its investments in the 4. Revenue Recognition
subsidiary over it’s share of the equity of the subsidiary, at the Revenue from Telecom Value Added Services including royalty
date on which the investments in the subsidiary Company was income, net of customer credits, is recognized on provision
made, is recognized as ‘goodwill’ being an asset in the consolidated of services in terms of revenue sharing arrangements with the
financial statements. telecom operators.
The following entities are considered in the consolidated financial Revenue from sale of user licences for software applications is
statements.
recognized when the applications are functionally installed at the
Sl Name of entity Country of % of Owner- % of Owner- customer’s location as per the terms of the contracts.
No Incorpora- ship held as ship held as
tion on March 31, on March 31,
Revenue from Other Services including maintenance services is
2008 2007
1 OnMobile Australia Pty Ltd Australia 100 100 recognized proportionately over the period during which the
2 OnMobile Singapore Pte
Ltd Singapore 100 100
services are rendered as per the terms of contract.
3 Phonetize Solutions
Private Limited (w. e. f. May Dividend on investment is recognized on an accrual basis. Profit
14, 2007) India 99.99 - on sale of investments is recorded on transfer of title from the
4 PT OnMobile Indonesia
(w. e. f. June 11, 2007) Indonesia 100 - Company and is determined as the difference between the sales
5 Voxmobili SA price and the then carrying value of the investment.
(w. e. f. September 10,
2007) France 100 -
6 Voxmobili Inc 5. Fixed assets
(w. e. f. September 10,
2007) USA 100 - Fixed assets are stated at cost of acquisition including taxes, duties,
7 Ver se Innovation Private freight and other incidental expenses relating to acquisition and
Ltd
(w. e. f. October 26, 2007) India 51 - installation.

83
Capital work in progress is stated at cost and includes advances since the holding subsidiary relationship came into existence is
paid to acquire fixed assets and the cost of fixed assets that are taken. Exchange differences arising out of these transactions are
not ready for their intended use at the Balance Sheet date. included under Exchange Loss/ Gain and charged to the Profit
and Loss account in case of “Integral operations”. However in
6. Depreciation
case of non-integral operations, these exchange differences are
Depreciation on assets is provided on a monthly basis using the included in ‘Foreign Currency Translation Reserve’ shown under
straight-line method based on useful/commercial lives of these Reserves and Surplus.
assets as estimated by the Management.
9. Employee Benefits
The useful/commercial lives for the Group Companies are
a. Short term employee benefits including salaries, social
as follows: security contributions, short term compensated absences
Category of Asset No. of years (such as paid annual leave) where the absences are expected
Leasehold Improvements primary lease period
Building 61 years
to occur within twelve months after the end of the period in
Office equipment 3 to 10 years which the employees render the related employee service,
Furniture & Fixtures 3 to 10 years
Computers & Electronic equipment 3 to 5 years
profit sharing and bonuses payable within twelve months
Computer Software 1 to 3 years after the end of the period in which the employees render
Motor Car 3 to 5 years
the related services and non monetary benefits (such as
Individual assets costing less than Rs.5,000/- are depreciated in medical care) for current employees are estimated and
full in the year of purchase. The depreciation rates adopted are measured on an undiscounted basis.
the same as or higher than the rates specified in Schedule XIV of
b. Defined Contribution Plan: Company’s contributions paid /
the Companies Act, 1956.
payable during the year to Provident Fund are recognized in
7. Investments the Profit and Loss Account.

Short term investments are stated at lower of cost or market c. Defined Benefit Plan: Liabilities for gratuity funded in terms
value. of a scheme administered by the Life Insurance Corporation
of India, are determined by Actuarial Valuation made at the
Long term investments are stated at cost. Provision is made for
end of each financial year. Provision for liabilities pending
any diminution in value of long term investment which is other
remittance to the fund is carried in the Balance Sheet.
than that of a temporary in nature.
Actuarial gain and losses are recognized immediately in the
8. Foreign currency transactions statement of Profit and Loss Account as income or expense.
Transactions in foreign currencies are translated at the exchange Obligation is measured at the present value of estimated
rate prevailing on the date of the transaction. Monetary assets future cash flows using a discounted rate that is determined
and Monetary liabilities denominated in foreign currencies are by reference to market yields at the Balance Sheet date on
translated at the exchange rate prevalent at the date of the Government bonds where the currency and terms of the
Balance sheet. Exchange differences arising on foreign currency Government bonds are consistent with the currency and
translations are recognized as income or expense in the year in estimated terms of the defined benefit obligation.
which they arise except in the case of non-integral operations d. Liability for Leave Encashment is provided based on
where these translations are included in ‘Foreign Currency accumulated leave credit outstanding to the employees as
Translation Reserve’ shown under Reserves and Surplus. on the date of Balance Sheet.
On consolidation, assets and liabilities (other than non-monetary
10. Employee Stock Option Plan
items) are translated at the exchange rate prevailing on the
balance sheet date. Non-monetary items are carried at historical The Company has formulated 6 Employee Stock Option Plans
cost. Revenue and expenses are translated at yearly average (“ESOP”) - OnMobile Employees Stock Option Plan – I 2003,
exchange rates prevailing during the year in case the holding OnMobile Employees Stock Option Plan – II 2003, OnMobile
subsidiary relationship was in existence on the first day of the Employees Stock Option Plan – III 2006, OnMobile Employees
fiscal year. In case of subsidiaries formed or acquired during the Stock Option Plan – I 2007, OnMobile Employees Stock Option
year, the average exchange rate prevailing during the period Plan – II 2007 and OnMobile Employees Stock Option Plan – I
2008.

8484
The Company has obtained legal opinion that the guidance note The effect of changes in tax rates on deferred tax assets and
on Accounting for Employees Share based payments are not liabilities is recognized in the income statement in the year of
applicable to OnMobile Employee Stock Option Plan – I 2003 enactment of change.
and II 2003. Options granted in terms of OnMobile Employee
Fringe benefit tax is provided as per provisions of the Income
Stock Option Plan – III 2006, OnMobile Employees Stock Option
Tax Act 1961.
Plan – I 2007, OnMobile Employees Stock Option Plan – II 2007
and OnMobile Employees Stock Option Plan – I 2008 to which Fringe Benefit tax on stock options exercised during the year is
the said guidance note is applicable, are accounted under intrinsic being recovered from the beneficiaries and not charged to the
value method and accordingly, the difference between the fair Profit and Loss Account.
value of the underlying shares and the exercise price, if any, is Research tax rebate:-
expensed to profit and loss account over the period of vesting.
In accordance with French fiscal rules, the subsidiary Voxmobili
11. Leases SA, is entitled to special tax rebate/refund calculated based on
Leases arrangements, where the risks and rewards incidental the social costs of the Research and Development staff. Such tax
to ownership of an asset substantially vest with the lessor, are rebate is recognized as other income on accrual basis.
classified as operating leases and the lease rentals thereon are 14. Cash flow Statement
charged to the Profit and Loss account on accrual basis. Assets
acquired under finance lease arrangements are recognised as an Cash Flow Statement has been prepared in accordance with the
asset and a liability is set up at the inception of the lease, at an indirect method prescribed in Accounting Standard 3 – “Cash
amount equal to lower of the fair value of the leased assets or Flow Statements”. The cash flows from operating, investing and
the present value of the future minimum lease payments. financing activities of the Company are segregated.

12. Borrowing Cost 15. Impairment of Assets

Borrowing costs incurred for the acquisition of qualifying assets The carrying amounts of assets are reviewed at each Balance
are recognised as part of cost of such assets when it is possible Sheet date if there is any indication of impairment based on
that they will result in future economic benefits to the Company internal / external factors. An asset is treated as impaired when
while other borrowing costs are expensed. the carrying cost of assets exceeds its recoverable amount. An
impairment loss is charged to Profit and Loss Account in the
13. Income Tax year in which an asset is identified as impaired. The recoverable
Income tax expense includes Indian and International income amount is greater of the asset’s net selling price and value in
taxes. Income tax comprises the current tax provision, net use. In assessing value in use, the estimated future cash flows
change in deferred tax asset or liability in the year and fringe are discounted to the present value. A previously recognized
benefit tax. impairment loss is further provided or reversed depending on
changes in circumstances.
Provision for current tax is made taking into account the
admissible deductions/allowances and is subject to revision 16. Earning per Share
based on the taxable income for the fiscal year ending 31 March In determining the earning per share, the Company considers
each year. the net profit after tax. The number of shares used in computing
Deferred tax assets and liabilities are recognized for the future basic earnings per share is the weighted average number of equity
tax consequences of temporary differences between carrying shares outstanding during the year. The number of shares used
values of the assets and liabilities and their respective tax in computing diluted earning per share comprises the weighted
bases and are measured using enacted tax rates applicable on average number of equity shares considered for deriving basic
the Balance Sheet date. Deferred Tax assets are recognized earning per share and also the weighted average number of
subject to Management’s judgement that realization is virtually equity shares that could have been issued on the conversion
certain. Voxmobili S.A. has a special tax credit on Research and of all dilutive potential equity shares. Dilutive potential equity
Development costs in accordance with the French fiscal rules. shares are deemed converted as of the beginning of the year
This tax credit is mainly calculated based on the social costs of unless issued at a later date.
the Research and Development staff.

8585
17. Provisions and Contingencies Share application money represents unencashed refund
instruments issued to the investors. This does not include any
Provision is recognized when an enterprise has a present
amount, due and outstanding, to be credited to the Investor
obligation as a result of past event, it is probable that an outflow
Education and Protection Fund as per the provisions of the
of resources will be required to settle the obligation, in respect
Companies Act, 1956.
of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on In the general meeting held on August 17, 2007 the shareholders
best estimate required to settle the obligation at the Balance approved the issue of 12 equity shares of face value of Rs 10/-
Sheet date. These are reviewed at each Balance Sheet date and each as bonus shares for every one share held by the equity
adjusted to reflect current best estimates. shareholders of the Company whose name appear in the register
of members as on the record date, by capitalization of capital
B. NOTES ON ACCOUNTS redemption reserve and Securities premium account. The Board
1. The name of the Company has been changed to “OnMobile of Directors by a circular resolution on August 18, 2007 has
Global Limited” (the “Company”) from “OnMobile Asia Pacific allotted 45,039,492 bonus shares (out of which 391,128 shares
Private Limited” with effect from August 21, 2007. were allotted on September 10, 2007 after receipt of Foreign
Investment and Promotion Board approval).
2. Initial Public Offer (IPO)
Estimated amount of contracts (net of advances) remaining
During the year, the Company completed a Public Issue of to be executed on capital account and not provided for – Rs
10,900,545 Equity Shares of Rs. 10/- each for cash at a price 82,641,685/- (Previous year: Rs. 90,152,292/-)
of Rs. 440/- each aggregating to Rs. 4,796,239,800/- The public
The Company has been named as one of the 20 defendants in
issue of 10,900,545 equity shares consisted of a fresh issue of
a civil dispute for injunction pending adjudication. However in
8,613,356 equity shares aggregating to Rs 3,789,876,640/- and
the opinion of the management no liability would arise in this
an offer for sale of 2,287,189 equity shares by the erstwhile
regard.
Holding Company, OnMobile Systems Inc aggregating to Rs
1,006,363,160/-. The premium of Rs. 430/- per share amounting 7. Export obligation to be met:
to Rs. 3,703,743,080/- from the allotment of 8,613,356 shares
The Company has imported certain plant & machinery including
has been credited to Securities Premium Account.The Securities
on loan basis, at concessional/nil rate of duty under Software
Premium Account stands net of share issue expenses of Rs
Technology Park of India Scheme with an obligation to export
245,804,675/-.
software of a specified value by March 31, 2008.As at the year end
Pursuant to the Public Issue, shares of the Company have been there was a shortfall in meeting the export obligation amounting
listed on Bombay Stock Exchange and National Stock Exchange to Rs. 45,621,138/-. The Company has filed an application to
effective February 19, 2008. Software Technology Park of India for extending the Export
The actual utilization of the proceeds of the issue of Rs Obligation period to 2008-2009 which is pending. Pending
3,544,540,000/- (net of share issue expenses), as disclosed in the receipt of the extension, the Company is contingently liable for
prospectus, is as under: customs duty amounting to Rs. 11,843,082/- (Previous Year: Rs.
11,843,082/-), interest thereon and penalty of the equivalent
Amount in Rs
Total cost to
amount against export obligations to be met. The Company has
Actual utilization
S/. be financed provided bank guarantee of Rs. 475,000/- (net of margin money
Expenditure Items upto March 31,
No. from the Net
2008 deposit) in respect of the same.
Proceeds
Purchase of equipments for offices
1 at Bangalore, Mumbai and Delhi 1,805,210,000 154,842,594
8. Amalgamation with ITfinity Solutions Private Ltd.
and various customer sites
a. The Company acquired 51% of share capital of ITfinity
2 Working capital requirements 50,000,000 -
3 Repayment of loan 350,000,000 350,000,000 Solutions Private Limited (“ITfinity”) which is in the same
4 General corporate purposes 1,339,330,000 13,713,385 line of business, as the Company, on December 22, 2006,
Total 3,544,540,000 518,555,979 for a total consideration of Rs. 213,476,075/- based on an
The unutilized funds as at March 31, 2008 have been temporarily independent valuation, of which Rs. 195,069,099/- was payable
invested in short term investments. in cash and the balance consideration of Rs. 18,406,976/-
payable by allotment of equity shares of Rs. 10/- each based

86
on an exchange ratio recommended by the independent b. Adjustments arising out of amalgamation:
valuer. Accordingly, the value of investment in ITfinity was
As per the amalgamation order received by the Company,
recorded at Rs. 213,476,075/- and the aggregated premium
the appointed date is April 1, 2006. Accordingly net loss
of Rs.18,356,296/- on allotment of shares was credited to
from ITfinity during the financial year 2006-07 as below is
the Securities Premium Account.
transferred to the Profit and Loss account in the books of
Subsequently ITfinity was amalgamated with the Company the Company upon amalgamation
with effect from April 1, 2006 in terms of the Scheme of
Amount (Rs.)
Amalgamation (“the Scheme”) sanctioned by the Honorable
Net Profit for the year from April 1, 2006 to March 31,
High Court of Karnataka, Bangalore and the High Court of 12,085,161
2007 (After alignment to Company’s accounting policies )
Judicature at Bombay vide their orders dated March 27, 2007
and April 21, 2007 respectively. The Scheme came into effect Add: General Reserve transferred 4,000,000

on May 14, 2007 and pursuant thereto all assets and debts, Less: Dividend paid during April 1, 2006 to December 22,

outstanding, credits, liabilities, benefits under income tax, 2006 before ITfinity became a subsidiary of the Company 37,711,291

excise, sales tax (including deferment of sales tax) benefits Net loss transferred on amalgamation (21,626,130)
for and under STPI registrations, duties and obligations were
c. Of the shares issued and allotted to the minority shareholders
transferred to and vested in the Company retrospectively
of erstwhile ITfinity, as discussed in Para 8(a) above, 9,098
with effect from April 1, 2006.
Preference shares were redeemed on June 01, 2007 at a
Pursuant to the Scheme, the investment held by the premium of Rs. 3,622/- each and 12,676 Preference Shares
Company in the said subsidiary was cancelled and the balance of Rs. 10/- each were converted into equity shares of Rs. 10/-
consideration to the minority shareholders aggregating to each at par. Capital Redemption Reserve was credited to the
Rs. 191,664,272/- was paid by allotment of 30,997 equity extent of the face value of the Preference Shares redeemed
shares of Rs. 10/- each fully paid up and 21,774 preference during the year.
shares of Rs. 10/- each fully paid up in the Company. The
d. 24,430 Equity Shares issued to the founders of ITfinity
amalgamation was accounted under the “Purchase Method”
on its amalgamation, have been retained in an escrow up
as per the Accounting Standard 14 - “Accounting for
to the committed period of their employment being up to
Amalgamations” and in accordance with the Scheme, the
December 20, 2008 (“Employment Period”). On expiration
assets and liabilities were taken over at their book values. In
of the Employment Period, the shares shall be released to
terms of the scheme, the excess of consideration over the
the Founders. According to the Employment Agreement
value of the net assets taken over being Goodwill arising on
read along with the Merger Agreement and the Escrow
amalgamation as calculated below was appropriated against
Agreement, if in case the employment gets terminated within
the Securities Premium account. If accounted based on
the Employment Period due to reasons stated therein, the
Accounting Standard 14 - “Accounting for Amalgamations”,
shares shall be transferred back to the Company.
goodwill would have been amortised over its useful life not
exceeding 5 years from the effective date resulting in the e. In view of the aforesaid amalgamation with effect from April
profits for the year ended March 31, 2008 being lower by Rs. 1, 2006, the figures for the current year are not comparable
71,703,128/-. to those of the previous year.

Goodwill arising on amalgamation: 9. Acquisition of Voxmobili S.A.


Particulars Amount (Rs.) a. During the year the Company has vide resolution of
Fixed Assets 1,197,153 the Board of Directors dated July 12, 2007 and the share
Investment 1,110,000
purchase agreement signed by and between the Company
Current Asset 58,907,732
and the shareholders of Voxmobili SA (“Vox”) on July 18,
Current Liabilities (14,578,794)
Miscellaneous Expenditure 71,600 2007 (“Shares purchase agreement”) has acquired 6,501,708
Deferred Tax liabilities (82,984) shares consisting of 2,500,000 Class A shares and 4,001,708
Total Net Assets as on April 1, 2006 46,624,707 A class B shares of Vox on September 10, 2007 for a maximum
Value of Consideration to Minority Shareholders 91,664,272 B
total consideration of Euros 25,434,423 ( aggregating to Rs
Cancellation of Investments 213,476,075 C
1,431,111,797/- including Rs 2,504,361/- of taxes payable
Goodwill on Amalgamation (Adjusted against
358,515,640 (B+C-A)
Securities Premium Account)

87
towards transfer of shares) payable under the share purchase agreement as below:
1. Euros 18,735,192 in Cash
2. 423,722 equity shares (including bonus shares) of the Company payable to Founders of Vox valued at Euros 2,279,231 based on
independent valuation and approved by the Foreign Investment and Promotion Board vide their letter dated September 5, 2007
3. Euros 3,520,000 in cash subsequent to an earn out valuation adjustment as mentioned in the share purchase agreement, payable
to the founders of Vox and
4. Euros 900,000 payable in Cash to the eligible key employees of Vox.
Accordingly, the Company has issued 423,722 equity shares of Rs 10/- each and paid Euros 18,735,192 of which Euros 2,543,192 are
paid into an escrow account which would be released to the founders at the end of 24 months on satisfaction of certain conditions.
The balance consideration of Euros 4,420,000 (Rs 278,636,800/-) is shown as deferred payment liability in the Balance Sheet.
b. In terms of the share purchase agreement, the Company vide resolution of Compensation Committee of the Board dated February
27, 2008 has granted 74,360 options exercisable at Rs 299/- per option, for a total value aggregating to Euros 400,000 to the key
employees other than the founders of Vox.
10. Investment in Ver se Innovation Private limited
During the year the Company has vide resolution of the Board of Directors dated July 12, 2007 and the subscription cum shareholders
agreement signed by and between the Company and the promoters of Ver se Innovation Private Limited (“Ver se”) on October 26, 2007
has acquired 51% equity share capital of Ver se consisting of 10,412 equity shares for a total consideration of Rs 22,000,556/-.
The Company has further agreed to a capital commitment in Ver se up to Rs. 66,000,000/- by way of equity (including warrants) or any
debt instrument including optionally convertible preference shares, term loans or any other such instrument or arrangement as may be
agreed by and between the parties as per the terms and conditions of the subscription cum shareholders agreement.
11. Effective July 1, 2007, the operations of OnMobile Australia Pty Ltd has been transferred to OnMobile Global Ltd. As a result of this,
contractual costs effective July 1, 2007 have since been transferred and booked in branch operations. OnMobile Australia Pty Limited will
be deregistered in due course.

12. Details of purchase and sale of investments during the year :


Purchased Sold
Name of the fund No. of Shares / No. of Shares /
Amount Amount
Units Units
Short Term Investments
ING Liquid Fund - Super IP - Daily Dividend 43,229,991 432,548,252 40,227,679 402,515,230
ICICI Prudential Flexible Income Plan - Daily Dividend 66,445,714 702,563,756 52,239,886 552,358,438
DBS Chola Liquid Fund 30,065,043 300,730,628 30,065,043 300,730,628
DWS Credit Opportunities Cash Fund 6,013,681 60,462,750 6,013,681 60,462,750
Principal Floating Rate MF 10,058,006 100,703,773 10,058,006 100,703,773
Templeton Long Term Plan Institutional Option - Dividend Reinvestment 20,045,226 201,043,590 20,045,226 201,043,590
Tata Mutual Fund 77,618,570 778,949,820 77,618,570 778,948,922
Kotak Fixed Maturity Plan 3 M Series 8 639,274 6,270,143 26,371,445 263,714,451.51
Kotak Fixed Maturity Plan 3 M Series 16 26,425,851 264,258,513 26,425,851 264,258,513.00
ABN AMRO Fixed Term Plan 752,782 7,617,526 26,394,501 264,995,321.
Reliance Interval Fund 367,304 3,626,166 2,367,304 204,433,045
Pru ICICI Fixed Maturity Plan Series 35 134,925 1,494,836 25,883,912 258,839,123
LIC MF Liquid Plus Fund - Daily Dividend 25,185,625 251,858,082 29,990,802 302,423,387
HSBC Liquid Plus Fund 5,205,084 52,116,425 5,205,084 52,116,425
Lotus India Liquid Plus Fund - IP - Daily Dividend 30,073,763 301,209,786 30,073,763 301,209,786
Birla Sun life Liquid Plus 15,144,197 151,544,952 10,023,681 100,304,973
ING Fixed Maturity Fund - 42 Institutional Dividend 30,010,048 300,100,482 - -
HDFC FMP 90D January 2008 (VI) - Wholesale Plan Dividend 50,000,000 500,000,000 - -
Standard Chartered Fixed Maturity Plan - Quarterly Series 25 - Dividend 10,086,574 100,866,000 - -
ABN AMRO Interval Fund Quarterly Plan H Interval Div-Redemption 40,000,000 400,000,000 - -

88
Purchased Sold
Name of the fund No. of Shares / No. of Shares /
Amount Amount
Units Units
Templeton Quarterly Interval Plan - Plan B - Institutional - Dividends Payout 24,974,276 250,000,000 - -
Birla Sunlife Quarterly Interval - Series 9 - Dividends Payout 10,023,681 100,304,973 - -
BSL Quarterly Interval Fund Series 9 25,000,000 250,000,000 - -
ICICI Prudential Interval Fund II Quarterly Interval Plan E 29,186,524 291,865,242 - -
Tata Fixed Income Portfolio A3 24,988,505 250,000,000 - -
Tata Dynamic Bond Fund Option B – Dividend 17,002,038 172,868,217 - -
DWS Quarterly Interval Fund-Series 1-Dividend Plan 10,000,000 100,000,000 - -
Fidelity Liquid Plus Inst - Daily Dividend 5,011,320 50,118,716 - -
Mirae Asset Liquid Fund-Institutional-Dividend Plan (Daily) 50,078 50,147,979 - -
Principal Floating Rate Fund FMP Insti. Option - Dividend Reinvestment Daily 4,999,102 50,052,507 - -
JP Morgan India liquid fund -Dividend Plan-Reinvest 5,000,813 50,052,641 - -
Tata Floater Fund – Daily Dividend 457,225 4,588,527 199,290.256 2,000,000
Kotak Quarterly Interest Plan 649,753 6,500,000 - -
SICAV 3M – SOGEMONEPLUS 12 14,635,495 6.5 8,905,435
SOGEMONEVAL 100 34,862,379 110 38,654,610
BMTN 2 19,927,105 - -
Total 644,845,087 6,613,889,261 419,203,841 4,458,618,401

13. Employee Benefits: b) Contribution to Gratuity Fund:

The Company has adopted the Accounting Standard 15 (Revised In accordance with Accounting Standard 15 (Revised
2005) - “Employee Benefits” with effect from April 01, 2007, the 2005) “Employee Benefits”, actuarial valuation as on
details of which are given below: March 31, 2008 was done in respect of the aforesaid
defined benefit plan of Gratuity based on the following
I. Defined Contribution Plans assumptions.
During the year, the Company has recognized the following For the year ended
Particulars
amount in the Profit and Loss Account- March 31, 2008
Discount Rate 8.25% p.a.
For the year ended Expected Rate of Return on Plan Assets 7.50% p.a.
Particulars
March 31, 2008 Rs. Salary Escalation Rate 10.0% p.a. for first 4 years &
Employers’ Contribution to Provident Fund 23,252,574 * 7.0% p.a. thereafter
* Included in Contribution to provident and other funds (Refer Schedule 11)
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
II. Defined Benefit Plan
relevant factors including supply and demand in the employment
a) Defined Benefit Plan (Leave Encashment): market.
In accordance with Accounting Standard 15 (Revised
Change in Present Value of Obligation:-
2005) - “Employee Benefits, the transitional liability of
Rs 16,167,298/- in respect of unutilised leave salary For the year ended
Particulars
March 31, 2008
existing as on April 01, 2007 has been adjusted against
Present Value of Obligation as at April 1, 2007 4,924,492
opening balance of surplus in Profit & Loss account, net
Current Service Cost 2,299,991
of deferred tax adjustment of Rs 5,438,000/-.
Interest on Defined Benefit Obligation 382,536
Leave encashment benefit expensed in the Profit & Loss Benefits Paid -
Account for the year was Rs. 26,120,186/-Such liability
Net Actuarial Losses / (Gains) Recognized in Year 3,246,806
was hitherto calculated on estimated payout basis.
Past Service Cost -
However in the current year the liability was estimated
Losses / (Gains) on “Curtailments & Settlements” -
on cost of compensated absences and the impact being
Closing Present Value of Obligations 10,853,825
profits for the current year lower by Rs. 9,201,813/-.

89
Change in the Fair Value of Assets 14. Operating leases

Particulars
For the year ended The Company is obligated under non-cancelable operating lease
March 31, 2008
for office space. Total rental expense and future lease payments
Opening Fair Value of Plan Assets 1,820,521
Expected Return on Plan Assets 166,067 under non-cancelable operating lease for office space are as
Actuarial Gains / (Losses) 157,932 follows:
Assets Distributed on Settlements -
For the year For the year
Contributions by Employer 5,090,974
Particulars ended ended
Assets Acquired due to Acquisition -
March 31, 2008 March 31, 2007
Exchange Difference on Foreign Plans -
Rental expense charged to Profit and
Benefits Paid - Loss account 71,146,312 35,142,908
Closing Fair Value of Plan Assets 7,235,494 Future lease payments
Not later than 1 year 84,467,115 39,918,473
Reconciliation of Present Value of Defined Benefit Obligation Later than 1 year and not later than
and the Fair Value of plan assets: 5 years 253,264,573 172,933,887

Particulars
As at 15. Employee Stock Option Plans
March 31, 2008
Closing Present Value of Funded Obligations 10,853,825 (a) During the year 2003-2004 the Company introduced
Closing Fair Value of Plan Assets (7,235,494) ‘OnMobile Employees Stock Option Plan – I 2003’ and
Closing Funded Status 3,618,331 ‘OnMobile Employees Stock Option Plan – II 2003’ for
Unrecognized Actuarial (gains) / losses -
the benefit of the employees, as approved by the Board of
Unfunded Net Asset / (Liability) recognised in Balance Sheet -
Directors in the meeting held on October 31, 2003 and
Amount recognized in the Balance Sheet December 4, 2003 respectively and Extra Ordinary General
As at
Meeting held on March 5, 2001 ,November 29, 2003 and
Particulars
March 31, 2008 December 30,2003 and the Company had appropriated
Closing Present value of obligations 10,853,825 1,026,000 and 114,000 equity shares of Rs.10/- each
Closing Fair Value of plan assets (7,234,494)
respectively to be granted to the eligible employees. The
Liability Recognised in the Balance Sheet 3,618,331
options were granted at the discretion of the Compensation
Expenses recognized in the Profit & Loss Account Committee at the exercise price determined by them. In
accordance with the terms of the stock option plans, 25% of
For the year ended
Particulars such Options granted would vest at the end of twelve (12)
March 31, 2008
Current Service Cost 2,299,991 months from the date the Optionee becomes an employee
Past Service Cost - of the Company and the remaining 75% would vest at a rate
Interest Cost 382,536 of 1/36th per month for the next thirty six (36) months from
Expected Return on Plan Assets (166,067)
the first Vesting.
Actuarial (Losses) / Gain 3,088,874
Losses / (Gains) on “Curtailments & Settlements” -
Numbers of options granted, exercised and forfeited during
Total Expenses to be recognized in the Profit & Loss
Account 5,605,334 the year under the said scheme are given below:
This being the first year of adoption of Accounting Standard Particulars
For the year ended For the year ended
March 31, 2008 March 31, 2007
15 (Revised 2005) - “Employee Benefits”, no comparative
Options granted outstanding at
information and other disclosures relating to previous year have 130,113 1,060,376
the beginning of the year
been provided in this account. Granted during the year 32,923 71,899
Exercised during the year 23,188 972,681
In respect of PT OnMobile Indonesia, since the Company was Forfeited during the year 6,303 29,471
established in February 2007 and the employees joined the Increase in the options consequent
Company in July 2007, the Company believes that the PSAK 24 to issuance of bonus shares as 1,602,540 -
discussed in Note 4 above
(Revision 2004) does not materially affect its current financial Options granted outstanding at
1,736,085 130,113
position and results of operations. the end of the year
Grants outstanding which are
vested as at Balance Sheet date
599,079 937,774
including increase due to issuance
of bonus shares

90
(b) During the year 2006-2007 the Company introduced Details of options granted under the schemes discussed in
‘OnMobile Employees Stock Option Plan – III 2006’ vide Para b and c above are given below:
Board Resolution dated July 24, 2006 and Shareholders
For the year ended For the year ended
Resolution dated July 24, 2006. A total of 61,567 options had Particulars
March 31,2008 March 31,2007
been appropriated to be granted to the eligible directors Options granted outstanding at the
- -
and employees.The options to the directors were granted at beginning of the year
Granted during the year 1,253,101 -
the discretion of the Board of Directors and the options to
Exercised during the year - -
the employees were granted by Compensation Committee Forfeited during the year 43,563 -
at the exercise price determined by them respectively. In Options granted outstanding at the
1,209,538 -
accordance with the terms of the stock option plans, 25% of end of the year
Weighted average remaining con-
such Options granted would vest at the end of twelve (12) 4.3 -
tractual life (years) at the year end
months from the date the Optionee becomes an employee/ Weighted average exercise price per
director of the Company and the remaining 75% would vest option (after adjusting for Bonus 320.22 -
issue)
at a rate of 1/36th per month for the next thirty six (36)
Range of exercise price (after Rs 261.54 to Rs
months from the first Vesting. -
adjusting for bonus issue) 592

The Company accounted the above options using the The Company accounted the above options using the intrinsic
intrinsic value method and thus, the difference between the value method and thus, the difference between the fair value
fair value of the underlying shares in the year of grant and of the underlying shares in the year of grant and the options
the options exercise value was charged to the profit and exercise value was charged to the profit and loss account.
loss account. Accordingly, the compensation charge thereon Accordingly, the compensation charge thereon in the current
in the current period is Rs. 229,167/-. year is Rs. 1,411,983/-.

(c) During the year 2007-2008 the Company introduced The guidance note issued by the Institute of Chartered
‘OnMobile Employees Stock Option Plan – I and Plan-II 2007’ Accountants of India requires the disclosure of pro forma net
vide Board Resolution dated July 12, 2007 and Shareholders results and EPS both basic & diluted, had the Company adopted
Resolution dated August 17, 2007. A total of 975,000 and the fair value method. Had the Company accounted the option
74,360 options respectively have been appropriated to be under fair value method, amortising the stock compensation
granted to the eligible employees. expense thereon over the vesting period, the reported profit
for the year ended March 31, 2008 would have been lower by Rs.
In accordance with the terms of ‘OnMobile Employees Stock
26,998,954/- and basic and diluted EPS would have been revised
Option Plan – I 2007’, 25% of the Options granted would
to Rs. 12.0 and Rs. 11.1 respectively as compared to Rs. 12.6 and
vest at the end of twelve (12) months from the date the
Rs. 11.6 without such impact.
Optionee becomes an employee/director of the Company
and the remaining 75% would vest at a rate of 1/36th per The fair value of stock based awards to employees is calculated
month for the next thirty six (36) months from the first through the use of option pricing models, requiring subjective
Vesting. assumptions which greatly affect the calculated values. The said
fair value of the options have been calculated using Black-Scholes
In accordance with ‘OnMobile Employees Stock Option Plan
option pricing model, considering the expected term of the
– II 2007’, approved by the Compensation Committee of the
options to be 4 years, an expected dividend rate of 1% on the
Board on February 27, 2008, 65%, 30%, 3% and 2% of the
underlying equity shares, volatility in the share price of 47% and
options granted would vest at the end of one year, two years,
a risk free rate of 8%. The Company’s calculations are based on
three years and four years from the grant date, respectively.

91
a single option valuation approach, and forfeitures are recognized as they occur. The expected volatility is based on historical volatility of
the share price during the year after eliminating the abnormal price fluctuations.

16. Segment Reporting


The Company is engaged in providing value added services in telecom business globally and is considered to constitute a single segment
in the context of primary segment reporting as prescribed by Accounting Standard 17 - “Segment Reporting”.

The secondary segment is identified to geographical locations and the secondary segment details are given below:

For the year ended For the year ended


Particulars
March 31, 2008 March 31, 2007
I Revenue
In India 2,212,435,392 1,301,340,653
In France 106,529,400 -
Rest of the World 299,200,021 28,376,208
II Total carrying amount of Segmental Assets, by geographical location
In India 3,233,801,424 1,135,910,445
In France 291,044,472 -
Rest of the World 88,917,527 22,608,604
III Cost incurred for purchase of tangible & intangible assets, by geographical
location
In India 811,555,388 255,142,140
In France 2,481,492 -
Rest of the World 23,456,259 8,466,784

17. Transactions with Related Parties

I. List of Related parties and relationship:

Sl
Relationship Related parties
No
(i) Controlling Enterprises
Holding Company OnMobile Systems Inc., USA (upto February 18,2008)
Associate Company OnMobile Systems Inc., USA (w.e.f from February 19, 2008)
(ii) Other related parties with whom the Company had transactions
Key Management Personnel Arvind Rao
Chandramouli Janakiraman
Virendra Gupta
Shailendra Sharma

92
II. Transactions with Related Parties:
Amount in Rs
Holding Company Associate Company Key Management Personnel Total
Nature of transactions March 31, March March March 31, March March 31, March 31, March
2008 31, 2007 31, 2008 2007 31, 2008 2007 2008 31, 2007
1 Remuneration
Arvind Rao - - - - 8,845,672 13,849,126 8,845,672 13,849,126
Chandramouli Janakiraman - - - - 5,389,370 2,711,002 5,389,370 2,711,002
Virendra Gupta - - - - 17,75,670 - 17,75,670 -
Shailendra Sharma - - - - 11,25,000 - 11,25,000 -
Krishna Jha - - - - - 825,000 - 825,000
Hemant Attray - - - - - 825,000 - 825,000
Total - - - - 17,135,712 18,210,128 17,135,712 18,210,128
2 Amount Payable
OnMobile Systems Inc. - 73,285,441 1,007,019,813 - - - 1,007,019,813 73,285,441
Total - 73,285,441 1,007,019,813 - - - 1,007,019,813 73,285,441
3 Amount Receivable
Other Advances - - - - - - - -
Arvind Rao - - - - 852,173 2,096,736 852,173 2,096,736
Chandramouli Janakiraman - - - - - 13,031 - 13,031
Total - - - - 852,173 2,109,767 852,173 2,109,767

Notes:
1. Related party relationships are as identified by the Company on the basis of information available and accepted by the auditors.
2. No amount has been written off or written back during the period in respect of debts due from or to related party.
3. Directors in erstwhile subsidiary ITfinity Solutions Private Limited amalgamated into the Company with appointment date of April 1, 2006
have not been included as key managerial personnel.
18. Earnings per Share

The earnings per share, computed as per requirements of Accounting Standard 20 – “Earnings per Share”, is as under:
For the year ended For the year ended
Particulars
March 31, 2008 March 31, 2007
Profit after tax as per the Profit & Loss Account 603,095,422 337,195,952
Weighted Average number of Shares for Basic EPS 47,916,994 26,634,907
Add: Effect of Convertible Preference Shares and Stock Options outstanding 3,942,651 22,338,870
Weighted Average Number of equity shares for diluted EPS 51,859,645 48,973,777
Rs. Rs.
Nominal value of equity shares 10.00 10.00
Earnings Per Share
Basic 13 13
Diluted 12 7

Note: Consequent to issuance of bonus shares as discussed in Note 4 above, the calculation of basic and diluted earnings per share has
been adjusted for the increase in the number of equity Shares outstanding as a result of the issuance of bonus equity shares, for all the years
presented.

19. Accounting For Taxes On Income


In accordance with the Accounting Standard 22 – “Accounting for Taxes on Income”, the Company has created a deferred tax liability to
the extent of Rs. 14,829,411/- for the current year, which has been debited to the Profit & Loss account. Details of Deferred Tax Asset
and Liabilities are:

93
Deferred Tax (Assets)/ Li- Deferred Tax (Assets)/ Liabili-
Particulars Adjustment Current year (credit)/charge
abilities as on April 1, 2007 ties as on March 31, 2008
Difference between book & tax depreciation 33,733,100 - 32,134,496 65,867,596
Others (Provision for gratuity, leave encashment etc.,) (3,872,000) - (22,542,985) (26,414,985)
Deferred Tax (ITfinity) at the time of Amalgamation - (200,100) - (200,100)
Total 29,861,100 (200,100) 9,591,511 39,252,511

Out of the above credit Rs 5,438,000/- has been credited to the General reserve on account of transitional provisions as per revised
Accounting Standard 15 -“Employee Benefits” (Revised 2005).

In respect of the OnMobile Singapore Pte Ltd, deferred tax assets have not been recognized in respect of items:
Particulars As at March 31, 2008 As at March 31, 2007
Unutilised tax losses Rs. 193,697 Rs. 242,904

Deferred tax assets in respect of the above items have not been recognized in the financial statements of the Subsidiary as the probability
of future taxable profits being available to utilize such benefits cannot be reliably established.

20. Provision for taxation includes tax liabilities in India on the Company’s global income as reduced by exempted income and any tax liabilities
arising overseas on income sourced from those countries.

21. The details of Provisions under Accounting Standard-29 “Provisions, Contingent liabilities and Contingent assets” is as under:-
Probable outflow Provision outstanding as Provision made Provision utilized Provision reversed Provision outstanding
Sl. No. Nature of Expense
estimated within at April 1, 2007 during the year during the year during the year as at March 31, 2008
1 Other provi-
sions- warranties & 3 years 34,897,203 188,963,416 144,185,499 2,473,410 77,201,710
customer credits

22. Disclosure on Derivative Instruments

There are no outstanding forward exchange contracts entered into by the Company as on March 31, 2008. Foreign Currency exposures
as at March 31, 2008 that have not been hedged by a derivative instrument or otherwise:
As at As at As at As at
Particulars March 31, 2008 March 31, 2007 March 31, 2008 March 31, 2007
Amount (Rs.) Amount (Rs.) Amount (Foreign Currency) Amount (Foreign Currency)
Due from:
Debtors against export of services/goods 52,804,844 - AUD 1,442,904 -
58,431,557 1,132,474 USD 1,406,681 USD 28,495
890,839 - GBP 10,347 -
6,003,397 - BDT 10,215,950 -
630,420 - EURO 10,000 -
Against Advances 2,630,696 - USD 65,932 -
Due to:
Creditors against import of goods and services 74,697,145 73,285,441 USD 1,872,109 USD 1,674,713
Voxmobili Payable 278,636,800 - EUR 4,420,000 -

23. In respect of Voxmobili SA, research tax rebate accrued as other income during the period amounted to Rs. 3,490,150/- and total tax
receivable outstanding at March 31, 2008 amounted to Rs. 26,262,898/-.

24. Previous year’s figures have been regrouped/reclassified wherever necessary.

Signatures to Schedule 1 to 15
Arvind Rao Chandramouli J
Chief Executive Officer and Managing Director Director

Place: Bangalore D Srikiran Rajesh Moorti


Date: April 30, 2008 Company Secretary Chief Financial Officer

94
STATEMENT REGARDING SUBSIDIARY COMPANIES PURSUANT TO
SECTION 212 OF THE COMPANIES ACT, 1956
Subsidiaries OnMobile OnMobile PT. OnMobile Vox mobili S A Vox mobili Inc. Ver se Innovation Phonetize
Singapore Pte. Australia Pty. Ltd. Indonesia Private Limited Solution Private
Ltd. Limited
Particulars
Financial Period March 31, 2008 March 31, 2008 March 31, 2008 December 31, 2007 December 31, 2007 March 31, 2008 March 31, 2008
Holding Company’s Interest 100% in equity 100% in equity 100% in equity 100% in equity 100% in equity 51% in equity 99.99% in equity
shares shares shares shares shares shares shares
Shares held by holding Company 85,000 Ordinary 100,000 999 shares of USD 6,501,705 shares of 1000 shares of 1 10,412 equity 9,999 equity
in the subsidiary shares of SGD Ordinary shares 100/- each 0.05 Euros USD shares of Rs. 10/- shares of Rs. 10/-
1/- each of AUD 1/- each each each
Net aggregate of Profit/Loss of the Subsidiary for the current period so far as it concerns the members of the holding Company
(a) Dealt with in the accounts
of the Company for the NIL NIL NIL NIL NIL NIL NIL
year ended 31-03-2008
(b) Not dealt with in the
accounts of the Company for Loss of SGD Profit of AUD Profit of IDR Profit of EURO Loss of USD Loss of Rs Loss of Rs
the year ended 31-03-2008 96,319/- 3,429/- 132,891,392/- 1,858,799/- 864.27/- 4,966,230/- 14,076/-
(Rs. In Thousands)

95
Net aggregate amount of profits / (losses) for the previous financial years of the subsidiary, since it became a subsidiary so far as they concern the members of the Company.

(a) Dealt with in the accounts


of the Company for previous NIL NIL NIL NIL NIL NIL NIL
financial years
(b) Not dealt with in the Loss of SGD Loss of AUD NIL NIL NIL NIL Loss of Rs
accounts of the Company for 44784/- 110/- 26400/-
previous financial years (Rs. in
Thousands)

Arvind Rao Chandramouli Janakiraman


Director Director

Place: Bangalore Rajesh Moorti Srikiran D


Date: April 20, 2007 CFO Company Secretary
Notice
Notice is hereby given that the Eighth Annual General Meeting proportion and in such manner as may be decided by the Board
(AGM) of the Members of OnMobile Global Limited will be held on of Directors from time to time.
Friday, August 01, 2008, at 10.00 A.M. at Hotel Royal Orchid, 01, Golf
RESOLVED FURTHER that, the above payments shall be made in
Avenue, adjoining KGA Golf course, Airport Road, Bangalore – 560
respect of the profits of the Company for each year of a period
008, India to transact the following business:
of five years commencing from April 01, 2007 to March 31,
ORDINARY BUSINESS 2012.

1. To receive, consider and adopt the audited Balance Sheet of the RESOLVED FURTHER that, pursuant to the provisions of Section
Company as at March 31, 2008, and the Profit and Loss account 309 of the Companies Act, 1956 and other applicable provisions
for the financial year ended as on that date and the Reports of of the Companies Act, 1956, if any, and the Company’s Employee
the Directors and Auditors thereon. Stock Option Plan – III, 2006, the stock options, amounting to
2000 stock options per director (including any bonus adjustment
2. To appoint a Director in place of Mr. Henry Huntly Haight IV
thereto as allowed under the Employee Stock Option Plan – III,
who retires by rotation and, being eligible offers himself for re-
2006), granted under the terms of the ESOP – III, 2006 by the
appointment.
Board of Directors of the Company during the previous financial
3. To re-appoint M/s. Deloitte Haskins & Sells, Chartered year ending March 31, 2008, be and is hereby approved.
Accountants, as statutory auditors of the Company from the
RESOLVED FURTHER that, the Board of Directors be and are
conclusion of this Annual General Meeting until the conclusion of
hereby authorised to take such steps as may be necessary to give
the next Annual General Meeting and to fix their remuneration,
effect to the above resolution.
and to pass the following resolution thereof.
5. To consider and if thought fit to pass with or without modification,
“RESOLVED that M/s. Deloitte Haskins & Sells, Chartered
the following resolution as an Ordinary Resolution:
Accountants, be and are hereby re-appointed as the Auditors of
the Company to hold office from the conclusion of this Annual “RESOLVED that, pursuant to the provisions of Sections 269,
General Meeting until the conclusion of the next Annual General 198, 309 read with Schedule XIII and other applicable provisions,
Meeting, on such remuneration as may be determined by the if any, of the Companies Act, 1956, and subject to the approval of
Board of Directors in consultation with the Auditors.” Central Government, if required and / or such other approvals as
may be necessary, the Company hereby accords its approval for
SPECIAL BUSINESS payment of remuneration to Mr. Arvind Rao, Managing Director
4. To consider and if thought fit, to pass with or without modification, of the Company on the terms and conditions as are set out
the following resolution as an Ordinary Resolution: in the Explanatory Statement with discretion to the Board of
Directors to alter and vary the terms and conditions from time
“RESOLVED that, pursuant to the provisions of Section 309 of
to time in such manner as it may deem fit in the best interest
the Companies Act, 1956 and other applicable provisions of the
of the Company within the limits specified under Section 198
Companies Act, 1956, if any, the directors of the Company (other
and Schedule XIII of the Companies Act, 1956, including any
than the Managing Director and/ whole-time Director) be paid
statutory modification thereto, for the time being in force or any
commission, of an amount not exceeding 1% of the net profits
amendments and/or modifications that may hereafter be made
of the Company computed in accordance with the provisions of
by the Central Government
the Section 198(1) of the Companies Act, 1956 or an amount
varying from Rs.10,00,000/- (Rupees Ten Lakhs) to Rs.20,00,000 RESOLVED FURTHER that, notwithstanding anything stated
(Rupees Twenty Lakhs) per director, which ever is lower and the hereinabove where in any financial year in case of loss or
same be distributed amongst them based on the performance inadequate profit, Mr. Arvind Rao Managing Director, shall
of the non-executive and/or independent director(s), in such be paid a remuneration by way of salary, bonus and other

96
allowances not exceeding the limits prescribed under Section RESOLVED FURTHER that, the Board of Directors of the
II of Schedule XIII to the Companies Act, 1956 (including any Company be and is hereby authorized to take such steps as may
statutory modifications or re-enactment(s) thereof, for the time be necessary to give effect to this resolution.”
being in force), or such other limits as may be prescribed by the
7. To consider and if thought fit, to pass with or without
Government from time to time as minimum remuneration.
modification(s), the following resolution as a Special Resolution:
RESOLVED FURTHER that, Mr. Arvind Rao, Managing Director
“RESOLVED that, pursuant to Sec 81 (1A) and other applicable
shall continue in his office of Managing Director of the Company
provisions, of the Companies Act, 1956 and in accordance with
till July 23, 2011, until otherwise decided by the Board of
the provisions of the Articles of Association of the Company and
Directors.”
subject to consent of the Securities and Exchange Board of India
“RESOLVED FURTHER that, the Board of Directors of the (SEBI) if any, and other concerned authorities approvals, as may
Company be and is hereby authorized to take such steps as may be necessary, consent of the members be and is hereby accorded
be necessary to give effect to this resolution.” to the Board of Directors to offer, issue and allot 106,022 Equity
Shares of OnMobile Global Limited of face value Rs. 10/- each
6. To consider and if thought fit, to pass with or without modification,
representing € 1,000,000 (Euros One Million) equivalent to
the following resolution as an Ordinary Resolution:
INR 66,622,200 (Rupees six crores sixty six lakhs twenty two
“RESOLVED that, pursuant to the provisions of Sections 269, thousand two hundred only) be issued to Laurent Balaine, Eric Le
198, 309 read with Schedule XIII and other applicable provisions, Flour, Frédéric Soufflet, founders of Telisma and their employees,
if any, of the Companies Act, 1956, and subject to the approval of from the unissued share capital of the Company, at the rate of
Central Government, if required and / or such other approvals Rs. 628.41 per equity share, pursuant to the Share Purchase
as may be necessary, the Company hereby accords its approval Agreement(s) (‘SPA’) entered into between the Company and
for payment of remuneration to Mr. Chandramouli Janakiraman, Telisma SA and its shareholders, in such manner and in such
whole-time Director of the Company on the terms and mode and subject to such terms and conditions and at such time
conditions as are set out in the Explanatory Statement with as the Board of Directors of the Company may deem fit and
discretion to the Board of Directors to alter and vary the terms proper.
and conditions from time to time in such manner as it may deem
RESOLVED FURTHER that, the Board be and is hereby authorised
fit in the best interest of the Company within the limits specified
to take necessary steps for listing of the shares allotted under the
under Section 198 and Schedule XIII of the Companies Act,
Share Purchase Agreement(s) (SPA), on the Stock Exchange(s)
1956, including any statutory modification thereto, for the time
where the Company’s shares are listed, as per the terms and
being in force or any amendments and/or modifications that may
conditions of the Listing Agreement with the concerned Stock
hereafter be made by the Central Government
Exchanges and other applicable guidelines, rules and regulations.
RESOLVED FURTHER that, notwithstanding anything stated
RESOLVED FURTHER that‚ the new Equity Shares shall be
hereinabove where in any financial year in case of loss or
subject to the Memorandum and Articles of Association of the
inadequate profit, Mr. Chandramouli Janakiraman, Whole-Time
Company and shall rank in all respects (including voting rights)
Director, shall be paid a remuneration by way of salary, bonus
pari passu with the existing Equity Shares except that the new
and other allowances not exceeding the limits prescribed under
Equity Shares will be entitled to dividend only in proportion
Section II of Schedule XIII of the Companies Act, 1956 (including
to the amount of capital paid up thereon for the period during
any statutory modifications or re-enactment(s) thereof, for the
which such capital was with the Company
time being in force), or such other limits as may be prescribed by
the Government from time to time as minimum remuneration. RESOLVED FURTHER that, the Board of Directors of the
Company be and are hereby authorized to take such steps as
RESOLVED FURTHER that Mr. Chandramouli Janakiraman,
may be necessary to give effect to this resolution.”
whole-time Director shall continue in his office of whole-time
Director of the Company till July 23, 2011, until otherwise 8. To consider and if thought fit, to pass with or without modification,
decided by the Board of Directors.” the following resolution as a Special Resolution:

97
“RESOLVED that, pursuant to Section 81(1A) and other time to time and to take such steps as may be necessary to give
applicable provisions of the Companies Act, 1956, Securities and effect to this resolution .”
Exchange Board of India (Employee Stock Option Scheme and
9. To consider and if thought fit, to pass with or without modification,
Employee Stock Purchase Scheme) Guidelines, 1999 (hereinafter
the following resolution as a Special Resolution:
referred to as the “SEBI Guidelines”) (including any statutory
modification(s) or re-enactment of the Act or the SEBI Guidelines, “RESOLVED that, pursuant to Section 81(1A) and other
for the time being in force), in accordance with the provisions applicable provisions of the Companies Act, 1956, Securities and
contained in the Articles of Association, and subject to such Exchange Board of India (Employee Stock Option Scheme and
other approvals, permissions and sanctions as may be necessary, Employee Stock Purchase Scheme) Guidelines, 1999 (hereinafter
the draft “Employees Stock Option Plan II, 2008” placed before referred to as the “SEBI Guidelines”) (including any statutory
this meeting duly initialed by the Chairman for identification, be modification(s) or re-enactment of the Act or the SEBI Guidelines,
and is hereby approved. for the time being in force), in accordance with the provisions
contained in the Articles of Association, and subject to such
RESOLVED FURTHER that, the consent of the shareholders be
other approvals, permissions and sanctions as may be necessary,
and is hereby accorded to the Board of Directors (hereinafter
the draft “Employees Stock Option Plan III, 2008” placed before
referred to as the “Board” which term shall be deemed to
this meeting duly initialed by the Chairman for identification, be
include any committee of the Board, including the Compensation
and is hereby approved.
Committee constituted by the Board) to earmark 100,000 Equity
Shares of the Company as stock options for the employees of the RESOLVED FURTHER that, the consent of the shareholders be
Subsidiary Company – “Telisma S A, to be issued under the said and is hereby accorded to the Board of Directors (hereinafter
Employee Stock Option Plan II, 2008 at such exercise price as per referred to as the “Board” which term shall be deemed to
the terms of the Share Purchase Agreement(s) (‘SPA’) entered include any committee of the Board, including the Compensation
into between the Company and Telisma S A and its shareholders, Committee constituted by the Board) to earmark 1,150,000
in such manner and in such mode and subject to such terms Equity Shares of the Company as stock options for the
and conditions and at such time as the Board of Directors of employees of the Company and/or employees of its subsidiaries,
the Company may deem fit and proper in accordance with the to be issued under the said Employee Stock Option Plan III,
applicable statutory guidelines, regulations and laws in this regard 2008 at the exercise price to be determined by the Board or
from time to time. any committee of the Board in accordance with the applicable
statutory guidelines, regulations and laws in this regard, from
RESOLVED FURTHER that, pursuant to the applicable provisions
time to time
of the Companies Act, 1956, Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock RESOLVED FURTHER that, pursuant to the applicable provisions
Purchase Scheme) Guidelines, 1999 the consent and approval of the Companies Act, 1956, Securities and Exchange Board of
of the members be and is hereby accorded to the Board of India (Employee Stock Option Scheme and Employee Stock
Directors to create, offer, issue, and allot equity shares of the Purchase Scheme) Guidelines, 1999 the consent and approval
Company to eligible employees as defined under the aforesaid of the members be and is hereby accorded to the Board of
Employees Stock Option Plan II, 2008. Directors to create, offer, issue, and allot equity shares of the
Company to eligible employees as defined under the aforesaid
RESOLVED FURTHER that, the Board be and is hereby authorised
Employees Stock Option Plan III, 2008.
to take necessary steps for listing of the shares allotted under
the Employees Stock Option Scheme, on the Stock Exchange(s) RESOLVED FURTHER that, the Board be and is hereby authorised
where the Company’s shares are listed, as per the terms and to take necessary steps for listing of the shares allotted under
conditions of the Listing Agreement with the concerned Stock the Employees Stock Option Scheme, on the Stock Exchange(s)
Exchanges and other applicable guidelines, rules and regulations. where the Company’s shares are listed, as per the terms and
conditions of the Listing Agreement with the concerned Stock
RESOLVED FURTHER that, the Board of Director and/or the
Exchanges and other applicable guidelines, rules and regulations.
committee thereof be and are hereby authorised to adopt, and
implement the Employee Stock Option Plan II, 2008 subject to RESOLVED FURTHER that, the Board of Director and/or the
such terms and conditions as may be decided and imposed from committee thereof be and are hereby authorised to adopt, and

98
implement the Employee Stock Option Plan III, 2008 subject to Notes:
such terms and conditions as may be decided and imposed from 1. Explanatory Statement pursuant to Section 173(2) of the
time to time and to take such steps as may be necessary to give Companies Act, 1956 is annexed hereto.
effect to this resolution .”
2. A member entitled to attend and vote at the meeting is entitled
10. To consider and if thought fit, to pass with or without modification, to appoint a proxy to attend and vote instead of himself and the
the following resolution as an Ordinary Resolution: proxy need not be a member of the Company.
“RESOLVED THAT pursuant to the provisions of the Foreign 3. The instrument appointing the proxy must be deposited at the
Exchange Management Act, 1999 and other relevant provisions registered office of the Company not less than 48 hours before
thereto, Branch Office(s) or a Subsidiary (ies) of the Company the commencement of the meeting.
be opened in such country (ies), in such manner and in such
4. Member/proxies should bring duly filled attendance slips sent
mode and subject to such terms and conditions and at such time
herewith to attend the meeting.
as the Board of Directors of the Company may deem fit and
proper, subject to the regulation(s) and law(s) of the respective 5. The Register of Directors’ shareholding, maintained under
country (ies).” section 307 of the Companies Act, 1956, will be available for
inspection by the members at the AGM.
11. To Consider and if thought fit, to pass with or without
modification, the following resolution as a Special Resolution: 6. The Register of contracts maintained under section 301 of the
Companies Act, 1956, will be available for inspection by the
“RESOLVED THAT, the approval be and is hereby granted for
members at the registered office of the Company.
the clarifications to the Company’s previous approvals to the
Employees Stock Option Plan I, 2007, Employees Stock Option 7. The Register of Members and share transfer books will remain
Plan II, 2007 and Employees Stock Option Plan I, 2008 and that closed from 29/07/2008 to 01/08/2008 (both days inclusive).
it is clarified herewith that these plans shall be deemed to have
Pursuant to Clause 49 of the listing agreement with the stock
been approved as separate resolutions as required under Clause
exchanges, following information is furnished about the directors
6.3 of the Securities and Exchange Board of India (Employee
proposed to be appointed/re-appointed.
Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 (hereinafter referred to as the “SEBI Guidelines”) Item 2
(including any statutory modification(s) or re-enactment of
Mr. Henry Huntly Haight IV, Director, retires by rotation and being
the Act or the SEBI Guidelines, for the time being in force), as
eligible, offers himself for re-appointment. A brief resume of Mr.
the Company had circulated all the details required under the
Henry Huntly Haight IV is given below:
provisions of the SEBI Guidelines including the details required
under Clause 22.2A of the SEBI Guidelines and accordingly these Mr. Henry Huntly Haight IV graduated with a Bachelor of Science
plans be and are hereby clarified and understood accordingly.” degree from the University of California, Berkeley and a Master of
Business Administration degree from Harvard Business School. He
has over 20 years of experience in the leadership and growth of
Registered office: By Order of the Board of Directors various enterprise companies. He has previously served as Managing
No. 26, Bannerghatta Road, For OnMobile Global Limited Director in Advent International Corp and Chief Executive Officer in
JP Nagar, 3rd Phase, Srikiran D Argo Global Capital, LLC. He has been appointed as a non-executive
Bangalore – 560 076, Company Secretary Director by the shareholders of our Company at the AGM held on
India. August 17, 2007. Mr. Haight is on the Board of the following other
Companies:
Date: May 02, 2008
1. OnMobile Systems, Inc.
Place: Bangalore
2. Genelabs Technology Inc.
3. Maxager Technology Inc.
4. Argo Global Capital, Inc.
5. Argo Holding, LP.

99
6. Argo Global Capital Corp.
7. Telecom Investment Inc.
8. Neural Technologies, Inc
9. NT3
10. Chinatron Group Holdings Limited
11. Argnor Wireless Ventures B.V.
12. SP Industries Inc.

Mr. Henry Huntly Haight IV does not hold any shares in the Company.

The Board considers it in the interest of the Company to appoint Mr. Henry Huntly Haight IV as a Director.

None of the Directors, except Mr. Henry Huntly Haight IV, is interested or concerned in these Resolutions.

Explanatory Statement under section 173(2) of the Companies Act, 1956

Item 4
The Board of Directors at their meeting held on April 21, 2007 (when the Company was a private limited Company), proposed the payment
of following remuneration:

Fixed salary (includes perquisites Total


Name Variable pay Sitting fees Commission
and contribution to PF) Compensation
H H Haight IV - - 280,000 1,000,000 1,280,000
Naresh K Malhotra - - 240,000 1,000,000 1,240,000
Sridar A Iyengar - - 160,000 1,000,000 1,160,000
Jayanth R Varma - - 160,000 1,000,000 1,160,000
Vikram S Kirloskar - - 120,000 1,000,000 1,120,000
Further the members of the Company at their Seventh Annual General Meeting held on August 17, 2007 approved the appointment of Mr.
Sridar A Iyengar, Mr. Naresh K Malhotra, Mr. Vikram S Kirloskar and Prof. Jayanth R Varma as the independent directors of the Company and
Mr. H H Haight IV as the non-executive director of the Company.

The provisions of Section 309 of the Companies Act, 1956 provides that a director who is neither in the whole-time employment nor a
Managing Director may be paid remuneration by way of commission, if the Company by special resolution, authorizes such payment.

The proposed resolution would allow the Company to make payment by way of commission to the non-executive directors for a period of
five years commencing from April 01, 2007 to March, 31, 2012 in accordance with section 309 of the Companies Act, 1956.

All the directors other than the Managing Director and the whole-time Director are deemed to be interested in the resolution to the extent
of the commission payable to them in accordance with the proposed resolution.

The Board of Directors of the Company recommends this resolution to be passed as an Ordinary Resolution for your approval

Item 5
The Compensation Committee of the Board at their meeting held on October 12, 2007 has approved the following remuneration to Mr.
Arvind Rao, Managing Director:

Mr.Arvind Rao has been associated with the Company since from February 12, 2001. He was appointed as Managing Director of the Company
on July 24, 2006. Mr. Arvind Rao, has over two decades of experience in financial services, IT and the telecom industry. Prior to joining the
Company, Mr. Rao has been associated with various reputed organisations such as Schlumberger wireline services, Mckinsey & Co., the
Chatterjee group and Gilbert global equity partners at locations such as Thailand, China, Malaysia, USA and India to name a few.

100
Clause Particulars
Period of Appointment Appointed as Managing Director, for a period of 5 years effective July
24, 2006
Compensation

Details of Compensation Structure Revised Annual (In Rs.)


Basic Salary 1,225,800
Conveyance Allowance 9,600
Medical Reimbursement 15,000
Leave Travel Allowance 227,000
Special Allowance 1,099,504
Providend Fund 147,096
Sub Total A 2,724,000
Other Benefits
Annual House rent paid by the Company 1,255,000
Premium car insurance paid by the Company (old) 29,000
FBT on the car (old) insurance at the rate of 33.99% on the 20% of
the expenditure 2,000
Depreciation on car (new) (includes insurance for 1st year) 2,804,000
FBT on the depreciation on car (new) 86,000
Sub Total B 4,176,000
Grand Total 6,900,000
Variable Compensation Rs. 6,900,000 as fixed compensation and with a variable bonus of
50% of the aforesaid fixed compensation, based on meeting agreed
key performance indicators and evaluation by the Compensation
Committee. The variable bonus could be less than, or exceed the
50% based on actual performance against agreed targets, and will be
determined by the Compensation Committee. The evaluation by the
committee will be completed within 30 days of the end of the fiscal
year, and the bonus shall be paid upon completion of such evaluation
Transport Fully maintained vehicle(s) including driver, paid for by the Company.
After such vehicle is fully depreciated in the Company’s books, the
title changes over to him for no consideration subject to the terms
and conditions of the Company’s car policy as amended from time
to time.
Superannuation Superannuation and other such statutory welfare benefits shall be
payable in accordance with the regulations under the appropriate
laws, if any.
Insurance Medical insurance as per Company practices. Additionally the
Company will pay for major medical surgery overseas if he deems
this required rather than having such surgery done in India.
Others He shall be entitled to upto 3 club memberships which shall be paid
for by the Company
Other Conditions • He shall not engage in any other business conflicting with the
business interests of the Company unless approved by the Board
of Directors of the Company;
• The Company shall reimburse his travelling expenses in connection
with the Company’s business as per the Company’s policy;

101
Clause Particulars
• 20 working days paid vacation per year, accruable; and
• He will be covered under accident insurance as per Company
norms and in case of accidents leading to partial disablement the
Company will pay short-term disability to him equal to his salary
at time of accident, for a period of 12 months post the accident,
and in case of total disablement the Company will pay him three
years of salary computed at the same rate as that prevailing at the
time of accident.
Termination His employment shall be liable to be terminated by either party by
giving prior notice of 6 months to the other party or on payment
of remuneration in lieu thereof. In the event of the Company
terminating his services due to redundancy arising out of strategic
changes to the business including the closure of business or change
in ownership or control or merger, the Company shall be liable to
pay a termination compensation or redundancy payment equivalent
to the remuneration of 18 months compensation paid in cash based
on previous financial years compensation plus accelerated full vesting
of all stock options held at time of termination plus forgiveness of
any and all outstanding loans from Company including transfer of any
vehicles used by him at time of termination, and any other appropriate
statutory compensation applicable to this employment.
Accordingly, subject to the provisions of Section 198, 269, 309, Schedule XIII of the Companies Act, 1956 and other applicable provisions of
the Companies Act, 1956, if any, it is now proposed that the Company continue the payment of the aforesaid remuneration to Mr. Arvind Rao,
Managing Director for the period of three years commencing from April 01, 2008 and also authorise the Board of Directors of the Company
to revise (increase or decrease) the aforesaid remuneration from time to time, as per the resolution of the Board during the period April 01,
2009 till July 23, 2011.

Mr. Arvind Rao, Managing Director is interested in the said resolution to the extent of remuneration and perquisites payable to him. No other
Director is interested or concerned in the resolution

The shareholders’ consent is therefore sought for the approval of the payment of remuneration to the Managing Director of the Company.

Item 6
The Compensation Committee of the Board at their meeting held on October 12, 2007 has approved the following remuneration to Mr.
Chandramouli Janakiraman, whole time Director:

Mr. Chandramouli Janakiraman has been associated with the Company since from May 12, 2003. He was appointed as a whole-time Director
of the Company on July 24, 2006. Mr. Mouli Raman has over 19 years of experience in the software industry. Prior to joining the Company he
was an Associate Vice-President and was heading the Internet Products Group in Infosys Technologies Limited.
Details of Compensation Structure Revised Annual (In Rs.)
Basic Salary 1,575,000
Conveyance Allowance 9,600
Medical Reimbursement 15,000
Leave Travel Allowance 291,667
Special Allowance 710,983
Providend Fund 189,000
Grand Total 3,500,000
Variable Compensation 0 to 50% of the Annual Fixed Compensation as variable based
upon achievement of performance targets as determined by the
Compensation Committee. This will be paid annually.

102
102
Accordingly, subject to the provisions of Section 198, 269, 309, ended December 31, 2008 as per the terms of the SPA and all other
Schedule XIII of the Companies Act, 1956 and other applicable such related agreements placed before the Board.
provisions of the Companies Act, 1956, if any, it is now proposed that
Accordingly, as per the terms of the SPA and Sec 81 (1A) of the
the Company continue the payment of the aforesaid remuneration
Companies Act, 1956, and as per the approval of the Foreign
to Mr. Chandramouli Janakiraman, Whole Time Director for the
Investment and Promotion Board (FIPB), it is required to issue
period of three years commencing from April 01, 2008 and also
106,022 Equity Shares of OnMobile Global Limited of face value Rs.
authorise the Board of Directors of the Company to revise (increase
10 each representing € 1,000,000 (Euros One Million) equivalent
or decrease) the aforesaid remuneration from time to time, as per
to INR 66,622,200 (Rupees six crores sixty six lakhs twenty two
the resolution of the Board during the period April 01, 2009 till July
thousand two hundred only) to Laurent Balaine, Eric Le Flour,
23, 2011.
Frédéric Soufflet, founders of Telisma and some of its employees,
Mr. Chandramouli Janakiraman, Whole Time Director is interested from the unissued share capital of the Company at Rs. 628.41 per
in the said resolution to the extent of remuneration and perquisites equity share.
payable to him. No other Director is interested or concerned in the
The shareholders’ consent is therefore sought by way of special
resolution
resolution for the issue of 106,022 Equity Shares of the Company
The shareholders’ consent is therefore sought for the approval of by the Board of Directors, to Laurent Balaine, Eric Le Flour, Frederic
the payment of remuneration to the Whole Time Director of the Soufflet, founders of Telisma and / or to its employees.
Company.
A copy of the share purchase agreement entered into between
Item 7 the Company and Telisma S A and its shareholders is available for
inspection by any of the members at the Registered Office of the
The Company had, during the first quarter of financial year 2008-
Company on working days, during business hours of the Company.
2009 i.e. during April 01 – June 30, 2008, signed a Share Purchase
Agreement(s) (“SPA”) with Telisma S A and its shareholders to None of the directors are interested in the said resolution.
acquire 100% of Telisma S A, France, a leading provider of speech
Item 8
recognition software for Service Providers and Enterprises. Telisma
S A (Telisma) is a Company that is based out of France.Telisma S.A. is The Board of Directors of the Company had approved the acquisition
specialized in the supply of advice and services in the communication, of Telisma S A for a maximum consideration of € 12,664,270.89 (Euros
telematic, and interactive services fields and provides a wide range of Twelve Millions Six Hundred Sixty Four Thousand Two Hundred
software services, in particular voice recognition software services, and Seventy Point Eighty Nine), equivalent to INR 843,721,841.37
for telecom companies. Further, Telisma has its software solutions (Rupees eighty four crores thirty seven lakhs twenty one thousand
focused for major mobile and landline operators. Telisma has its eight hundred and forty one and thirty seven paise only) consisting
commercial activities in France. of € 11,664,270.89 (Euros Eleven Millions Six Hundred Sixty Four
Thousand Two Hundred and Seventy Point Eighty Nine) equivalent
Further, the Board of Directors has approved the acquisition of
to INR 777,099,621.37 (Rupees seventy seven crore seventy lakhs
Telisma for a maximum consideration of € 12,664,270.89 (Euros
ninety nine thousand six hundred and twenty one and thirty seven
Twelve Millions Six Hundred Sixty Four Thousand Two Hundred
paise only) to be paid in cash and € 1,000,000 (Euros One Million)
and Seventy Point Eighty Nine), equivalent to INR 843,721,841.37
equivalent to INR 66,622,220 (Rupees six crores sixty six lakhs and
(Rupees eighty four crores thirty seven lakhs twenty one thousand
twenty two thousand two hundred and twenty only) to be paid as
eight hundred and forty one and thirty seven paise only) consisting
an earn out adjustment of Equity shares of OnMobile Global Limited
of € 11,664,270.89 (Euros Eleven Millions Six Hundred Sixty Four
based on the financial performance of Telisma as for the financial year
Thousand Two Hundred and Seventy Point Eighty Nine) equivalent
ended December 31, 2008 as per the terms of the Share Purchase
to INR 777,099,621.37 (Rupees seventy seven crore seventy lakhs
Agreement (“SPA”) and all other such related agreements placed
ninety nine thousand six hundred and twenty one and thirty seven
before the Board of Directors.
paise only) to be paid in cash and € 1,000,000 (Euros One Million)
equivalent to INR 66,622,220 (Rupees six crores sixty six lakhs and Additionally, the Board of Directors had also approved to grant stock
twenty two thousand two hundred and twenty only) to be paid as options of OnMobile Global Limited, worth € 700,000 (Euros Seven
an earn out adjustment of Equity shares of OnMobile Global Limited Hundred Thousand only) equivalent to INR 46,635,540 (Rupees four
based on the financial performance of Telisma for the financial year crores sixty six lakhs thirty five thousand five hundred and forty
only), to the founders and some employees of Telisma.

103
103
Accordingly, considering
subject to the need provisions of Section
for granting stock 198, 269,to309,
options ended December
the employees 31, 2008 subsidiary
of the Company’s as per the –“Telisma”,
terms of thesubsequent
SPA and allto other
the
Schedule XIIISPA,
signing of the of the Companies
and since Act, schedule
the vesting 1956 andbeing other from the such
applicable
different existingrelated
Stockagreements
Option Plans placed before
of the the Board.
Company, the Board of Directors
provisions
of the Companyof the Companies Act, 1956,dated
vide their resolution if any, April
it is now
30, proposed
2008, noted thatand considered the need for a new stock option plan which is compliant
Accordingly, as per the terms of the SPA and Sec 81 (1A) of the
the
withCompany continue
the applicable the payment
Regulations, as perofthe thedetails
aforesaid remuneration
specifi ed below and accordingly approved the introduction and implementation of the new
Companies Act, 1956, and as per the approval of the Foreign
to Mr. Chandramouli
Employee Stock OptionJanakiraman,
Plan II 2008,Whole
subjectTime to theDirector
members’ forapproval.
the
Investment and Promotion Board (FIPB), it is required to issue
period of three years commencing from April 01, 2008 and also
Further, this new Employee Stock Option Plan II, 2008 is compliant with 106,022
all theEquity Shares
guidelines ofofthe
OnMobile
SecuritiesGlobal Limited ofBoard
and Exchange face value Rs.
of India
authorise the Board of Directors of the Company to revise (increase
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)10Guidelines, each representing € 1,000,000
1999 (hereinafter (Euros
referred to asOne the Million) equivalent
“SEBI Guidelines”)
or decrease) the aforesaid remuneration from time to time, as per
(including any statutory modification(s) or re-enactment of the Act or the to SEBI
INR Guidelines.
66,622,200A(Rupees copy of six the crores sixty six Stock
draft Employee lakhs Option
twenty Plan
two
the resolution of the Board during the period April 01, 2009 till July
II, 2008 is available at the registered office of the Company for inspectionthousand two hundred
by the members on working only)days,
to during
LaurenttheBalaine,
business Eric Le of
hours Flour,
the
23, 2011.
Company. The salient features of the draft Employee Stock Option PlanFrédéric II, 2008 as Souffl et, founders
required of Telisma and
under Securities and Exchange
some of Boardits employees,
of India
Mr. Chandramouli
(Employee Janakiraman,
Stock Option Scheme Whole Time Director
and Employee is interested
Stock Purchase Scheme)from the unissued
Guidelines, share capitalreferred
1999 (hereinafter of the Company
to as the “SEBI at Rs.Guidelines”)
628.41 per
in the saidany
(including resolution
statutory to modifi
the extent of remuneration
cation(s) or re-enactment and of perquisites
the Act or the equity
SEBI share.
Guidelines, for the time being in force) are as follows:
payable to him. No other Director is interested or concerned in the
Particulars ESOP Plan II, The2008 shareholders’ consent is therefore sought by way of special
resolution
Total number of options to be granted 100,000 resolution for the issue of 106,022 Equity Shares of the Company
Classes
The of employees
shareholders’ entitled
consent to participate
is therefore sought for the approval Employees
of of
bySubsidiary
the Board Company
of Directors, to Laurent Balaine, Eric Le Flour, Frederic
Vesting
the Period
payment of remuneration to the Whole Time Director Over of thea period
Souffl of et,
twofounders
years asofper the details
Telisma and / specifi
or to ed its in the plan or as may be
employees.
Company. specifi ed by the Compensation Committee of the Board
Exercise Price The exercise A price
copy of of the
theOptions
share purchase agreement entered
shall be determined into between
by the Compensation
Item 7 the Company and Telisma S A and its shareholders
Committee of the Board in accordance with the Share Purchase Agreement(s) is available for
signed with inspection
Telisma S Aby andany its of the members at the Registered Office of the
shareholders.
The Company had, during the first quarter of financial year 2008-
Exercise Period and process of exercise The Options Company
shall be on working days,
exercisable at theduring
end ofbusiness
the fourth hoursyearof the
fromCompany.
the date
2009 i.e. during April 01 – June 30, 2008, signed a Share Purchase
of the grantNoneor as of maythebedirectors
determined are by the Compensation
interested Committee of the
in the said resolution.
Agreement(s) (“SPA”) with Telisma S A and its shareholders to
Board from time to time.
acquire 100% of Telisma S A, France, a leading provider of speech
Appraisal process for determining the eligibility of The eligibility Itemof the8 employees shall be determined from time to time by the
recognition software for Service Providers and Enterprises. Telisma
employees Compensation Committee.
S A (Telisma) is a Company that is based out of France.Telisma S.A. is The Board of Directors of the Company had approved the acquisition
Method which the Company shall use to value its options The Compensation Committee of the Board shall determine from time to time
specialized in the supply of advice and services in the communication, of Telisma S A for a maximum consideration of € 12,664,270.89 (Euros
whether fair value or intrinsic value in accordance with the Share Purchase Agreement(s) signed with Telisma S A
telematic, and interactive services fields and provides a wide range of Twelve Millions Six Hundred Sixty Four Thousand Two Hundred
and its shareholders.
software and Seventy Point Eighty Nine), equivalent to INR 843,721,841.37
Maximumservices,
Numberinofparticular
Options voice
to be recognition software services,
issued per employee The Compensation Committee of the Board shall determine from time to
for telecom companies. Further, Telisma has its software solutions (Rupees eighty four crores thirty seven lakhs twenty one thousand
time.
focused for major mobile and landline operators. Telisma has its eight hundred and forty one and thirty seven paise only) consisting
The Company shall conform to the accounting policies specified under the of SEBI Guidelines. (Euros Eleven Millions Six Hundred Sixty Four
€ 11,664,270.89
commercial activities in France.
None of the directors are interested in the said resolution. Thousand Two Hundred and Seventy Point Eighty Nine) equivalent
Further, the Board of Directors has approved the acquisition of
to INR 777,099,621.37 (Rupees seventy seven crore seventy lakhs
Telisma
The Board forofa Directors
maximumofconsideration
the Companyofrecommends€ 12,664,270.89 (Euros as a Special Resolution for members approval.
this resolution
ninety nine thousand six hundred and twenty one and thirty seven
Twelve Millions Six Hundred Sixty Four Thousand Two Hundred
Item 9 paise only) to be paid in cash and € 1,000,000 (Euros One Million)
and Seventy Point Eighty Nine), equivalent to INR 843,721,841.37
equivalent to INR 66,622,220 (Rupees six crores sixty six lakhs and
(Rupees eighty
Considering thefour
needcrores thirty seven
for granting stock lakhs twentyforone
options thethousand
employees of the Company or any
twenty two thousand twoofhundred
its subsidiaries,
and twenty andonly)
aftertoconsidering
be paid as
eight hundred and forty one and thirty seven paise only)
recommendation of the Board of Directors of the Company post their meeting consisting
an earn out adjustment of Equity shares of OnMobile Globalplace
to be held on July 31, 2008, if any, it is proposed to for
Limited
of €approval
the 11,664,270.89 (Euros Eleven
of the members a newMillions Six Hundred
stock option Sixty Four
plan (Employee Stock Option Plan III, 2008) for making grants upto 2% of the existing paid
based on the financial performance of Telisma as for the financial year
Thousand
up Two Hundred
share capital and Seventy
of the Company Point Eighty
i.e. 1,150,000 Nine)toequivalent
options, the employeesended of theDecember
Company31, or 2008
its subsidiaries,
as per thewhichtermsshall be Share
of the compliant with
Purchase
to the
all INRguidelines
777,099,621.37
of the (Rupees
Securitiesseventy seven crore
and Exchange Boardseventy
of India lakhs
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Agreement (“SPA”) and all other such related agreements placed
ninety nine 1999
Guidelines, thousand six hundred
(hereinafter and to
referred twenty
as theone andGuidelines”)
“SEBI thirty seven (including any statutory modification or re-enactment of the Act or the
before the Board of Directors.
paise Guidelines.
SEBI only) to beApaidcopyinofcash
the and
draft€ Employee
1,000,000Stock (EurosOption
One Million)
Plan III, 2008 is available at the registered office of the Company for inspection
equivalent
by to INRduring
the members 66,622,220 (Rupees
the business six crores
hours sixty six lakhs
of the Company. Additionally,
and features
The salient of thethe
draftBoard of Directors
Employee had alsoPlan
Stock Option approved
III, 2008to as
grant stock
required
twenty two thousand two hundred and twenty only) to be paid as options of OnMobile Global Limited, worth € 700,000 (Euros Seven
an earn out adjustment of Equity shares of OnMobile Global Limited Hundred Thousand only) equivalent to INR 46,635,540 (Rupees four
based on the financial performance of Telisma for the financial year crores sixty six lakhs thirty five thousand five hundred and forty
only), to the founders and some employees of Telisma.

103
103
104
104
Accordingly,
under Securities subject
and to the provisions
Exchange Board ofofIndiaSection 198, 269,
(Employee Optionended
Stock309, Scheme December 31, 2008Stock
and Employee as per the terms
Purchase of the SPA
Scheme) and all other
Guidelines, 1999
Schedule
(hereinafterXIIIreferred
of the toCompanies
as the “SEBI Act, 1956 and (including
Guidelines”) other applicable
any statutorysuch related
modifi agreements
cation placed before
or re-enactment of thethe
ActBoard.
or the SEBI Guidelines,
provisions
for the time ofbeing
the Companies Act,as1956,
in force) are if any, it is now proposed that
follows:
Accordingly, as per the terms of the SPA and Sec 81 (1A) of the
the Company continue the payment of the aforesaid remuneration
Companies Act, 1956, and as per the approval of the Foreign
to Mr. Chandramouli Janakiraman, Whole Time Director for the
Investment and Promotion Board (FIPB), it is required to issue
Particulars
period of three years commencing from April 01, 2008 and also ESOP Plan III, 2008
106,022 Equity Shares of OnMobile Global Limited of face value Rs.
Total number
authorise of options
the Board to be granted
of Directors of the Company to revise (increase 1,150,000
Classes of employees entitled to participate 10 each representing € 1,000,000 (Euros One Million) equivalent
or decrease) the aforesaid remuneration from time to time, as per Employees of the Company or its Subsidiary
Vesting Period Overtoa INR
period 66,622,200 (Rupees
of four years as persixthecrores
vesting sixty six lakhs
schedule twenty two
below:
the resolution of the Board during the period April 01, 2009 till July
25% of the Options shall be deemed to vest at the end ofLetwelve
thousand two hundred only) to Laurent Balaine, Eric Flour,
23, 2011.
(12)Frédéric
months Soufflfrom et,
thefounders of Telisma
date of such Grant and
and some of its employees,
the remaining 75% of
Mr. Chandramouli Janakiraman, Whole Time Director is interested suchfrom the unissued
Options share capital
shall be deemed to vestof the
fromCompany
the 13th at Rs. 628.41
month per
from the
in the said resolution to the extent of remuneration and perquisites dateequity share.
of such Grant at a rate of 1/36th per month for the next thirty
payable to him. No other Director is interested or concerned in the six (36) months of the Vesting Period or as may be specified by the
The shareholders’ consent is therefore sought by way of special
resolution Compensation Committee
resolution for the issueofofthe Board.Equity Shares of the Company
106,022
Exercise Price
The shareholders’ consent is therefore sought for the approval of The by the Board of Directors, to Laurentshall
exercise price of the Options be Eric
Balaine, determined by the
Le Flour, Frederic
the payment of remuneration to the Whole Time Director of the Compensation Committee of the Board
Soufflet, founders of Telisma and / or to its employees.in accordance with the
Company. applicable Fair Market Value based on the trading price of the Company’s
A copy
shares on theofStockthe share purchase agreement entered into between
Exchange.
Item 7 Period and process of exercise
Exercise The Options shall be exercisableS at
the Company and Telisma A the
andendits of
shareholders
first year from is available
the date offor
inspection
the grant, basedbyonany theofoptions
the members
vested fromat thetimeRegistered
to time or Offi
ascemay
of be
the
The Company had, during the first quarter of financial year 2008-
Company
determined byontheworking days, during
Compensation business of
Committee hours of the Company.
the Board from time
2009 i.e. during April 01 – June 30, 2008, signed a Share Purchase
to time
None andof upto a periodare
the directors of interested
five years from in thethesaiddate of vesting. The
resolution.
Agreement(s) (“SPA”) with Telisma S A and its shareholders to
exercises shall be approved from time to time by the Compensation
acquire 100% of Telisma S A, France, a leading provider of speech
Item 8 of the Board.
Committee
recognition software for Service Providers and Enterprises. Telisma
Appraisal process for determining the eligibility of employees The eligibility of the employees shall be determined from time to time
S A (Telisma) is a Company that is based out of France.Telisma S.A. is The Board of Directors of the Company had approved the acquisition
by the Compensation Committee.
specialized in the supply of advice and services in the communication, of Telisma S A for a maximum consideration of € 12,664,270.89 (Euros
Method which the Company shall use to value its options whether The Compensation Committee of the Board shall determine from time
telematic, and interactive services fields and provides a wide range of Twelve Millions Six Hundred Sixty Four Thousand Two Hundred
fair value or intrinsic value to time.
software
Maximumservices,
Numberinofparticular
Options voice
to be recognition software services, The and
issued per employee
Seventy Point Eighty Nine), equivalent to INR 843,721,841.37
Compensation Committee of the Board shall determine from time
for telecom companies. Further, Telisma has its software solutions to time. (Rupees eighty four crores thirty seven lakhs twenty one thousand
focused for major mobile and landline operators. Telisma has its eight hundred and forty one and thirty seven paise only) consisting
The Company shall conform to the accounting policies specified under the of SEBI Guidelines. (Euros Eleven Millions Six Hundred Sixty Four
€ 11,664,270.89
commercial activities in France.
None of the directors are interested in the said resolution Thousand Two Hundred and Seventy Point Eighty Nine) equivalent
Further, the Board of Directors has approved the acquisition of
to INR 777,099,621.37 (Rupees seventy seven crore seventy lakhs
Telisma
The forofa Directors
Board maximumofconsideration
the Companyofrecommends
€ 12,664,270.89 (Euros to be passed as Special Resolution, for the members approval.
this resolution
ninety nine thousand six hundred and twenty one and thirty seven
Twelve Millions Six Hundred Sixty Four Thousand Two Hundred
Item 10 paise only) to be paid in cash and € 1,000,000 (Euros One Million)
and Seventy Point Eighty Nine), equivalent to INR 843,721,841.37
equivalent to INR 66,622,220 (Rupees six crores sixty six lakhs and
(Rupees
The Companyeighty infour
itscrores
effortsthirty seven lakhs
to expand twenty
globally one
and in thousand
order to look at new areas of business
twenty two thousand twohas decided
hundred andtotwenty
open branch
only) tooffibece(s)
paid or
as
eight hundred and forty one and thirty seven paise only)
subsidiary(ies) in various countries. It is deemed necessary to authoriseconsisting the Board of Directors to take decisions to set up offi ce(s) or
an earn out adjustment of Equity shares of OnMobile Global Limited
of € 11,664,270.89
incorporate subsidiary(Euros Eleven Millions
Company(ies) Six Hundred
at various businessSixty Four subject to such terms and conditions, regulations and law(s) of the
locations based on the financial performance of Telisma as for the financial year
Thousand
respective Two Hundredand
country(ies) andinSeventy Point as
such manner Eighty Nine) of
the Board equivalent
Directors of ended
the Company may31,deem fit as
and proper”
December 2008 per the terms of the Share Purchase
to INR 777,099,621.37 (Rupees seventy seven crore seventy lakhs
None of the directors are interested in the said resolution Agreement (“SPA”) and all other such related agreements placed
ninety nine thousand six hundred and twenty one and thirty seven
before the Board of Directors.
The Board
paise only) of
to Directors
be paid inofcashthe and
Company recommends
€ 1,000,000 (Euros this
Oneresolution
Million) to be passed as an Ordinary Resolution, for the members approval.
equivalent to INR 66,622,220 (Rupees six crores sixty six lakhs and Additionally, the Board of Directors had also approved to grant stock
twenty two thousand two hundred and twenty only) to be paid as options of OnMobile Global Limited, worth € 700,000 (Euros Seven
an earn out adjustment of Equity shares of OnMobile Global Limited Hundred Thousand only) equivalent to INR 46,635,540 (Rupees four
based on the financial performance of Telisma for the financial year crores sixty six lakhs thirty five thousand five hundred and forty
only), to the founders and some employees of Telisma.

103
103
105
105
Item 11
Reference is invited to the approval granted to the Employees Stock Option Plan I, 2007, Employees Stock Option Plan II, 2007 and Employees
Stock Option Plan I, 2008 in the Annual General Meeting held on August 17, 2007. In this regard, as per the requirements of Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (hereinafter referred to
as the “SEBI Guidelines”) (including any statutory modification(s) or re-enactment of the Act or the SEBI Guidelines, for the time being in
force), the Company is required to approve these plans as separate resolutions. Accordingly, as per the intent of the shareholders on August
17, 2007 it is required to clarify that these plans are deemed to be approved as separate resolutions as per Clause 6.3 of SEBI Guidelines and
that all the details required under Clause 22.2A of the SEBI Guidelines had been circulated to the members. Hence, it is proposed to seek the
clarification and approval of the members accordingly.

None of the directors are interested in the said resolution

The Board of Directors of the Company recommends this resolution to be passed as an Special Resolution, for the members approval.

Registered office: By Order of the Board of Directors


No. 26, Bannerghatta Road,
JP Nagar, 3rd Phase, For OnMobile Global Limited
Bangalore – 560 076,
India. Srikiran D
Company Secretary
Date: July 05, 2008
Place: Bangalore

106
ONMOBILE GLOBAL LIMITED
Registered Office: No. 26, Bannerghatta Road, JP Nagar Phase III, Bangalore – 560076, India

Proxy Form
Eighth Annual General Meeting – August 01, 2008

Regd. Folio No./DP Client ID

I/We………………………………. of ……………… being a member of OnMobile Global Limited hereby appoint …………………………

of ……………….. or failing him/her……………………… of ……………………………. as my/our proxy to vote for me/us on my/our behalf

at the EIGHTH ANNUAL GENERAL MEETING of the Company to be held at Hotel Royal Orchid, 01, Golf Avenue, Adjoining KGA Golf

course, Airport Road, Bangalore – 560 008, India, at 10.00 AM IST on Friday the August 01, 2008 and at any adjournment(s) thereof.

 ……………………………………........………………please tear here………………………………………………………………………

ONMOBILE GLOBAL LIMITED


Registered Office: No. 26, Bannerghatta Road, JP Nagar Phase III, Bangalore – 560076, India

Attendance Slip
Eighth Annual General Meeting – August 01, 2008

Regd. Folio No./DP Client ID

No. of shares held

I/we hereby record my/our presence at the Eighth Annual General Meeting held at Hotel Royal Orchid, 01, Golf Avenue, Adjoining KGA Golf
course, Airport Road, Bangalore – 560 008, India at 10.00 AM IST on Friday the August 01, 2008.

……………………………… ….…………………………..
Name of the member/proxy Signature of the member/proxy
(in BLOCK letters)

107
Additional Details as required by Govt. of India, Ministry of Corporate Affairs vide Letter No. 47/255/2008-CL-III

OnMobile OnMobile PT OnMobile Phonetize Ver se Innovation


Subsidiary Voxmobili SA * Voxmobili Inc.*
Australia Pty Ltd. Singapore Pte Ltd. Indonesia Solutions Pvt. Ltd. Pvt. Ltd.

April 07 - April 07 - April 07 - January 07 - January 07 - April 07 - April 07 -


Accounting Year
March 08 March 08 March 08 December 07 December 07 March 08 March 08

Equity Capital 3,661,822 2,457,092 3,823,098 20,494,034 39,435 100,000 204,120

Reserves 121,536 (4,078,860) 576,350 384,715,885 (10,728,898) (40,476) 11,912,345

Total assets 4,339,149 29,625,742 15,116,240 473,714,925 1,261,228 1 68,558 13,445,420

Total Liabilities 4,339,149 29,625,742 15,116,240 473,714,925 1,261,228 168,558 13,445,420

Turnover 13,204,229 36,108,217 11,121,189 243,463,602 4,751,918 - 55,341

Profit/ (Loss) Before Tax 468,494 152,282 823,792 177,320,314 37,196 (14,076) (9,960,348)

Provision for Taxation 342,930 2,936,572 247,442 - 71,279 - 23,743

109
Profit/ (Loss) After Tax 125,564 (2,784,290) 576,350 177,320,314 (34,082) (14,076) (9,984,091)

Proposed Dividend - - - - - - -

Note:
Total Assets = Fixed Assets + Investments + Current Assets
Total Liabilities = Equity + Loan Funds + Current Liabilities

* Voxmobili SA and Voxmobili Inc. numbers are as on December 31, 2008


Notes

110
Notes

111
Offices in India
Bangalore
RPS Green Space,No: 165/5, 1st Main,
Krishna Raju Layout,
J.P Nagar 7th Phase,
Bangalore- 560 076

Mumbai
#1004, Floor 10, Dalamal House , Nariman Point,
Mumbai - 400 021

Sumer plaza, 5th floor, Marol Maroshi Road,


Marol, Andheri (E),
Mumbai - 400 059

Delhi
704, Floor 7, Bhikaji Cama Bhawan ,
Bhikaji Cama Place,
New Delhi - 110 066 International Offices
Australia
G-1, Ground Floor, Global Arcade, OnMobile Global Limited
M G Road, Sikandarpur, Level 34, 100 Miller Street , N Sydney, NSW - 2060
Gurgaon - 122 002

France
Voxmobili SA (an OnMobile Company)
36, rue Brunel
75017 Paris - France

Indonesia
PT OnMobile Indonesia
M-23, Mayapada Tower, 11th Floor,
Jl. Jenderal Sudirman Kav. 28
Jakarta 12920, Indonesia

Malaysia
OnMobile Global Ltd.
Level 16,Menara Hap Seng, Jalan P. Ramlee,
50250 Kuala Lumpur, Malaysia

Singapore
OnMobile Singapore Pte. Ltd.
APBC Raffles Place, 30 Raffles Place,
#23-00 Chevron House, Singapore - 048622

112
01 Not Just Hello...
08 Message from the Chairman
10 Company Snapshot
12 Financial Snapshot
14 The MVAS Ecosystem
15 Board of Directors
16 Corporate Information
17 Our Leadership Team
19 CEO and CFO Certificate
20 Report on Corporate Governance and Shareholder Information

Contents
33 Directors’ Report

44 Management Discussion & Analysis


49 Report of the Auditors
52 Financial Statements
74 Balance Sheet Abstract
75 Report of the Auditors on Consolidated Financial Statements
76 Consolidated Financial Statements
95 Statement Regarding Subsidiary Companies
96 Notice
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OnMobile Global Limited


# 26, Bannerghatta Road,
J. P. Nagar 3 Phase,
rd

Bangalore - 560 076, India.


Phone : +91 80 41802500
Fax : +91 80 41802810
Email : investors@onmobile.com
Website: www.onmobile.com
OnMobile Global Limited • Annual Report 2007 - 08