Home  »  Company  »  MT Educare Ltd.  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of MT Educare Ltd. Company

Mar 31, 2015

1.1 Basis of accounting and preparation of financial statements

These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

The Company follows Mercantile System of accounting and recognizes income and expenditure on accrual basis.

All assets and liabilites have been classified as current and non-current as per the Companies normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. The Company has ascertained its operating cycle as 12 months for the purpose of classification of assets and liabilities into current and non current.

1.2 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statement and the result of operations during the reporting period. Although these estimates are made on reasonable and prudent basis based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

1.3 cash and cash equivalents

Cash comprises cash on hand, bank balances and demand deposits with banks.

1.4 cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.5 Depreciation and amortisation

Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013

Depreciation on assets acquired / sold during the year is provided on pro-rata basis with reference to the date of installation / put to use, in the books or disposal.

Depreciation on leasehold improvements is provided on useful life of 8 years. During the year ended March, 2015, the company has reassesed the useful lives of the fixed assets in line with useful lives mentioned in Schedule II to the Companies Act, 2013 except for air-conditioners and computer hardware where the management believes the revised useful life of these assets correctly reflect the periods over which the assets are expected to be used. Useful life for Air-conditioners and Computer hardware is 6 and 4 years respectively. The Company has also reviewed the depreciation policy and effective April 01, 2014, all fixed assets will be depreciated using the Straight Line method from the Written Down Value method used earlier. Amortization of the intangible assets is provided on pro-rata basis on Straight Line Method based on management's estimate of useful life of the assets (i) A period of 3 years on non-com pete fees and Technology Aided Teaching (TAT). (ii) A period of 3 years on goodwill, based on management's current estimate of useful life of the asset. (iii) A period of 5 years on ERP - SAP Software. (iv) A period of 5 years on purchase of License for Online teaching. (v) A period of 3 years for content.

1.6 Impairment of Assets

All assets other than inventories, investments and deferred tax asset, are reviewed for impairment, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount.

1.7 Revenue recognition

Revenue is recognized to the extent that it is probable that economic benefits will flow to the Company and revenue can be reliably ascertained.

Revenue from Gross fees ( inclusive of Robomate CRF ) received is recognized equally over the period of service rendered (course duration) except CRF. At the time of admission, fees received from students are booked at gross amount and shown as 'advance fees'. Discounts and concessions are accounted for separately in a similar manner. The Course Registration Fees (CRF) is part of total fees and is non refundable. The Company receives CRF as part of the initial payment made by a student and recognises the same on admission.

The Company has entered into agreements / arrangements with PU Colleges on revenue sharing basis where the same is recognised on mutually agreed terms and accounted as Management Fees.

The Company sells "Robomate", digitized content (recorded lectures of expert faculty, notes, high-end animation and question / asnwers) online and/or offline through home installations/pen drive/ SD card/ Tablet. Sales price is inclusive of Robomate and all hardware cost. Royalty Income is received from Chetana Publications Private Limited (CPPL) on their external Master KEY sales.

1.8 Other income

Interest and Royalty income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.9 Fixed Assets and Capital Work In Progress

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Rent paid for the period beginning/commencing from taking over vacant possession of the premises and ending with the date of completion of project/ improvements or for a period of 3 months, whichever is earlier, is capitalized under leasehold improvements.

Capital Work-In-Progress are assets not ready for the intended use as at the Balance Sheet date and include assets at new centres which have not commenced operations till 31st March 2015.

In case of centers closed down or relocated during the period, Written Down Value (WDV) of leasehold improvements / fixtures as on the date on which the centre is closed down / relocated have been fully written off.

1.10 Intangible assets

An intangible asset is recognized, where it is probable that future economic benefits attributable to the asset will flow to the enterprise and where the cost can be reliably ascertained.

Intangible asset are stated at cost of acquisition less accumulated amortization.

Expenses incurred on in-house development of courseware and products are shown as Capital Work In Progress till the time they have been put to use. They shall be capitalized either individually or as a knowledge bank in the form of Technology Aided Teaching (TAT) / Multimedia Software. Their technical feasibility and ability to generate future economic benefits is established in accordance with the requirements of Accounting Standard 26, "Intangible Assets" issued by ICAI.

1.11 Foreign currency transactions and translations Initial recognition

The transactions in foreign exchange are accounted at the exchange rate prevailing on the date of transactions.

Any exchange gains or losses arising on subsequent settlement of such transactions are accounted as income or expenses in the period in which they are settled and arise.

1.12 Government grants

The Company has adopted Income Approach to recognize Government Grants. As per AS 12 on Government Grants issued by ICAI, government grants should be recognized in the profit and loss statement on a systematic and rational basis over the periods necessary to match them with the related costs.

The expenses incurred in relation to the Scheme are debited to Profit & Loss Account. An appropriate amount in respect of such grant, recognizing the amount of grant over the period of service rendered, is credited to income for the year even though the actual amount of such benefits may finally be settled and received after the end of the relevant accounting period.

1.13 Investments

Long term investments are valued at cost with an appropriate provision for permanent diminution in value, if any. Investment that is readily realizable and is intended to be held for not more than one year is valued at lower of cost or realizable value.

1.14 Employee benefits

A. Provident Fund

As per the Employees Provident Funds and Miscellaneous Provision Act, 1952 employees of the Company are entitled to receive benefits under the provident fund & family pension fund which is a defined contribution plan. These contributions are made to the fund administered and managed by Government of India. The Company's contribution to the schemes is recognized as expense in the profit and loss account during the period in which the employee renders the related services. The Company has no other obligation to the plans beyond its monthly compensations.

Defined contribution plans

The Company's contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

B. Gratuity

The Company provides for gratuity obligations through a defined benefit retirement plan (the "Gratuity Plan") covering all employees. The Company makes annual contributions, premiums in respect of all qualifying employees to Life Insurance Corporation of India (LIC) for the Employees' Group Gratuity-cum-Life Assurance Scheme. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment in accordance with the Payment of Gratuity Act, 1972. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation at year end, using the Projected Unit Credit Method. Actuarial gains and losses are recognized in full in the Profit and Loss Account for the period in which they occur. The yearly premium paid to LIC of India is charged to Profit & Loss Account of the year in which it becomes payable.

C. Leave Entitlement

The Company has a policy of paying Leave Encashment benefits to its employees only in the event of their resignation, based on their accumulated leave balances in accordance with the provisions of "The Bombay Shops and Establishment Act, 1948". As per the policy of the Company, an employee can accumulate a maximum of 39 days leave over a period of 2 years, after which the leave would lapse.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under: (a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and (b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.15 Segment reporting

The Company's business activities fall within a single segment viz. conducting commercial training, coaching, tutorial classes and activities incidental and ancillary thereon. In case of geographical (secondary) segment, since segment assets and segment revenue do not exceed 10% of total business, segment reporting is not required.

1.16 Leases

Operating Leases

Leases where the Lessor effectively retains substantially all risks and benefits of ownership of the leased premises during the lease term are classified as operating leases. Operating lease payments are recognized as an expense in the Profit & Loss Account on a monthly accrual basis as per agreements, except in case of newly rented premises where the rent paid for the period beginning/ commencing from taking over vacant possession of premises and ending with date of completion of the improvements / project or rent paid for 3 months, whichever is earlier, is capitalized and added to the cost of leasehold improvements.

1.17 Earnings per share

Basic Earnings Per Share is calculated by dividing the Net Profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of Equity Shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus, granting and vesting employee stock options to employees. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential Equity Shares.

1.18 Taxes on income

Current period tax is ascertained and accounted at the amount expected to be paid to Income tax authorities in accordance with the provisions of Income Tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.19 Provisions and contingencies

A provision is recognized when there is a present obligation as a result of a past event; it is probable that an outflow of resources will be required to fulfill the obligation and in respect of which reliable estimate can be made. Provisions other than employee benefits are not discounted to their present value and are determined based on best estimate required to fulfill the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the best current estimate. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

1.20 Proposed Dividend

Dividend recommended by the Board of Directors is provided for in the accounts, pending approval at the Annual General Meeting.


Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention on an accrual basis and comply with the Accounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and except for the changes, if any, in accounting policy discussed herein below in detail, are consistent with those used in the previous year.

The Company follows Mercantile System of accounting and recognizes income and expenditure on accrual basis.

All assets and liabilites have been classified as current and non-current as per the Companies normal operating cycle and other criteria set out in the schedule VI to the Companies Act, 1956. The Company has ascertained its operating cycle as 12 months for the purpose of classification of assets and liabilities into current and non current.

2.2 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting

principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statement and the result of operations during the reporting period. Although these estimates are made on reasonable and prudent basis based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

2.3 Cash and cash equivalents

Cash comprises cash on hand, bank balances and demand deposits with banks.

2.4 Cash flow statement

Cash flows are reported using the indirect method, whereby prof it / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.5 Depreciation and amortisation

Depreciation on all assets is provided on Written Down Value method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

Individual item(s) costing less than Rs. 5,000 and not forming part of cluster of Assets (Chairs, benches, etc.) are written off at the rate of 100%.

Depreciation on assets acquired / sold during the year is provided on pro-rata basis with reference to the date of installation / put to use, in the books or disposal.

Depreciation on leasehold improvements is provided at the rates applicable to furniture & fixtures and in the manner specified in Schedule XIV of the Companies Act, 1956.

2.6 Impairment of Assets

All assets other than inventories, investments and deferred tax asset, are reviewed for impairment, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount.

2.7 Revenue recognition

Revenue is recognized to the extent that it is probable that economic benefits will flow to the Company and revenue can be reliably ascertained.

Revenue from fees received is recognized equally over the period of service rendered (course duration). At the time of admission, fees received from students are booked at gross amount and shown as ''advance fees''. Discounts and concessions are accounted for separately in a similar manner. The Company has introduced Course Registration Fees (CRF) as part of the Course Fees. The CRF forms part of the total fees and is non refundable. The Company receives CRF as part of the initial payment made by a student and recognises the same on admission.

Upfront fee received from franchisees as brand fees is recognized as income over the period of the agreement.

Commission or royalty received from the franchisees is recognized as per the terms of agreements entered into with them.

The Company has entered into agreements / arrangements with Colleges on revenue sharing basis where the same is recognised on mutually agreed terms and accounted as Management Fees.

The Company has for the first time during the year sold it''s content on pre-recorded CDs, software and hardware. Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the customer. Sales are exclusive of sales tax, rebates and discounts.

The Company has adopted Income Approach to recognize Government Grants. As per AS 12 on Government Grants issued by ICAI, government grants should be recognized in the Profit and Loss statement on a systematic and rational basis over the periods necessary to match them with the related costs.

The Company has during the year introduced "Robomate" a teaching application (recorded

lectures of expert faculty) which is sold online and/or offline through a pen drive/ sd card/tablet. Sale of Robomate with respect to MT students forms part of the total fees. The revenue for the same is recognized on delivery/ installation of the same at the students location.

2.8 Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

2.9 Fixed Assets and Capital Work In Progress

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Rent paid for the period beginning/commencing from taking over vacant possession of the premises and ending with the date of completion of project/improvements or for a period of 3 months, whichever is earlier, is capitalized under leasehold improvements.

Capital Work-in-Progress are assets not ready for the intended use as at the Balance Sheet date and include assets at new centres which have not commenced operations till 31 March 2014.

In case of centers closed down or relocated during the period. Written Down Value (WDV) of leasehold improvements / fixtures as on the date on which the centre is closed down / relocated have been fully written off.

2.10lntangible assets

An intangible asset is recognized, where it is probable that future economic benefits attributable to theassetwi I If lowtothe enterprise and where the cost can be reliably ascertained. Intangible asset are stated at cost of acquisition less accumulated amortization. Amortization of the intangible assets is provided on pro- rata basis on Straight Line Method based on management''s estimate of useful life of the assets

(i) A period of 3 years on non-compete fees and Technology Aided Teaching (TAT).

(ii) A period of 3 years on goodwill, based on management''s current estimate of useful life of the asset.

(iii) A period of 5 years on ERP - SAP Software.

(iv) A period of 5 years on purchase of License for Online teaching.

Expenses incurred on in-house development of courseware and products are shown as Capital Work In Progress till the time they have been put to use. They shall be capitalized either individually or as a knowledge bank in the form of Technology Aided Teaching (TAT) / Multimedia Software. Their technical feasibility and ability to generate future economic benefits is established in accordance with the requirements of Accounting Standard 26, "Intangible Assets" issued by ICAI.

2.11 Foreign currency transactions and translations

Initial recognition

The transactions in foreign exchange are accounted at the exchange rate prevailing on the date of transactions. Any exchange gains or losses arising on subsequent settlement of such transactions are accounted as income or expenses in the period in which they are settled and arise.

Foreign Operations

The accounts of the branch are consolidated by integral system of branch accounting. Transactions for a month are translated using the exchange rate prevailing at the end of the month, which approximates the average exhange rate. Any exchange gain / (loss) arising on the translation of the financial statement is taken to the Profit & Loss Account.

2.12Government grants, subsidies and export incentives

The Company has adopted Income Approach to recognize Government Grants. As per AS 12 on Government Grants issued by ICAI, government grants should be recognized in the profit and loss statement on a systematic and rational basis over the periods necessary to match them with the related costs. The expenses incurred in relation to the Scheme are debited to Profit & Loss Account. An appropriate amount in respect of such grant, recognizing the amount of grant over the period of service rendered, is credited to income for the year even though the actual amount of such benefits may finally be settled and received after the end of the relevant accounting period.

2.13 Investments

Long term investments are valued at cost with an appropriate provision for permanent diminution in value, if any.

Investment that is readily realizable and is intended to be held for not more than one year is valued at lower of cost or realizable value.

2.14Employee benefits

A. Provident Fund

As per the Employees Provident Funds and Miscellaneous Provision Act, 1952 employees of the Company are entitled to receive benefits under the provident fund & family pension fund which is a defined contribution plan. These contributions are made to the fund administered and managed by Government of India. The Company''s contribution to the schemes is recognized as expense in the profit and loss account during the period in which the employee renders the related services. The Company has no other obligation to the plans beyond its monthly compensations.

Defined contribution plans

The Company''s contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

B. Gratuity

The Company provides for gratuity obligations through a defined benefit retirement plan (the "Gratuity Plan") covering all employees. The Company makes annual contributions, premiums in respect of all qualifying employees to Life Insurance Corporation of India (LIC) for the Employees'' Group Gratuity- cum-Life Assurance Scheme. The Gratuity

Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and tenure of employment in accordance with the Payment of Gratuity Act, 1972. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation at year end, using the Projected Unit Credit Method. Actuarial gains and losses are recognized in full in the Profit and Loss Account for the period in which they occur. The yearly premium paid to LIC is charged to Profit & Loss Account of the year in which it becomes payable.

C. Leave Entitlement

The Company has a policy of paying Leave Encashment benefits to its employees only in the event of their resignation, based on their accumulated leave balances in accordance with the provisions of "The Bombay Shops and Establishment Act, 1948". As per the policy of the Company, an employee can accumulate a maximum of 39 days leave over a period of 2 years, after which the leave would lapse.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

2.15Segment reporting

The Company''s business activities fall within a single segment viz. conducting commercial training, coaching, tutorial classes and activities incidental and ancillary thereon. In case of geographical (secondary) segment, since segment assets and segment revenue do not exceed 10% of total business, segment reporting is not required.

2.16 Leases

Operating Leases

Leases where the Lessor effectively retains substantially all risks and benefits of ownership of the leased premises during the lease term are classified as operating leases. Operating lease payments are recognized as an expense in the Profit & Loss Account on a monthly accrual basis as per agreements, except in case of newly rented premises where the rent paid for the period beginning/ commencing from taking over vacant possession of premises and ending with date of completion of the improvements / project or rent paid for 3 months, whichever is earlier, is capitalized and added to the cost of leasehold improvements.

2.17Earnings per share

Basic Earnings Per Share is calculated by dividing the Net Profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of Equity Shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus, granting and vesting employee stock options to employees. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential Equity Shares.

2.18Taxes on income

Current period tax is ascertained and accounted at the amount expected to be paid to Income tax authorities in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

2.19Provisions and contingencies

A provision is recognized when there is a present obligation as a result of a past event; it is probable that an outflow of resources will be required to fulfill the obligation and in respect of which reliable estimate can be made. Provision other than employee benefits are not discounted to their present value and are determined based on best estimate required to fulfill the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the best current estimate. Contingent liabilities are not recognized but are discussed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

3.1 The company has only one class of equity shares having a face value ofRs. 10 each. Each holder of equity shares in entitled to one vote per share. Dividend right is in proportion of number of shares held.

3.2 In the event of liquidation of the company, the holders of equity shares shall be entitled to remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion of equity shares held by the shareholders.

3.3 Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

3.5.1 Out of the above, 867,450 equity shares were issued as bonus in the ratio of 5:1 in FY 2009-10 and 33,310,080 bonus equity shares were issued in the ratio of 32:1 in FY 2010-11.

5.1 Fees collected in advance from students to the extent of revenue which will not be recognised within the company''s operating cycle have been classified as non-current liabilites.

Of the above, the balances that meet the definition of Cash and cash equivalents as per AS 3 ''Cash Flow Statements'' is Rs. 870.85 Lakhs (For year ended 31st March 2013, the amount is Rs. 2,324.34 lakhs)

Balances with banks includes deposits amounting to Rs. 516.21 lakhs (for the year ended 31st March, 2013 the amount is Rs. 2,204.87 lakhs) which have original maturity of more than 12 months.


Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention on an accrual basis and comply with the Accounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and except for the changes, if any, in accounting policy discussed herein below in detail, are consistent with those used in the previous year.

The Company follows Mercantile System of accounting and recognises income and expenditure on accrual basis.

All assets and liabilities have been classified as current and non-current as per the companies normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. The Company has ascertained its operating cycle as 12 months for the purpose of classification of assets and liabilities into current and non-current.

1.2 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that afect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statement and the result of operations during the reporting period. Although these estimates are made on reasonable and prudent basis based upon management''s best knowledge of current events and actions, actual results could difer from these estimates.

1.3 Cash and cash equivalents

Cash comprises cash on hand, bank balances and demand deposits with banks.

1.4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the efects of transactions of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.5 Depreciation and amortisation

Depreciation on all tangible assets is provided on Written Down Value method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

Individual item(s) costing less than Rs. 5,000 and not forming part of cluster of Assets (Chairs, benches, etc.) are written of at the rate of 100%.

Depreciation on assets acquired/sold during the year is provided on pro-rata basis with reference to the date of installation/put to use, in the books or disposal.

Depreciation on leasehold improvements is provided at the rates applicable to furniture & fixtures and in the manner specified in Schedule XIV of the Companies Act, 1956.

1.6 Impairment of assets

All assets other than inventories, investments and deferred tax asset, are reviewed for impairment, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount.

1.7 Revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and revenue can be reliably ascertained.

Revenue from fees received is recognised equally over the period of service rendered (course duration). At the time of admission, fees received from students are booked at gross amount and shown as ''advance fees''. Discounts and concessions are accounted for separately in a similar manner. The Company has introduced Course Registration Fees (CRF) as part of the Course Fees. The CRF forms part of the total fees and is non refundable. The Company receives CRF as part of the initial payment made by a student and recognises the same on admission.

Upfront fee received from franchisees as brand fees is recognised as income over the period of the agreement.

Commission or royalty received from the franchisees is recognised as per the terms of agreements entered into with them.

The Company has entered into agreements/ arrangements with Colleges for providing educational consultancy services on revenue sharing basis where the same is recognised on mutually agreed terms and accounted as Management Fees.

The Company has for the first time during the year sold sofware, hardware and content on pre-recorded CDs. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the customer. Sales are exclusive of sales tax, rebates and discounts.

The Company has adopted Income Approach to recognise Government Grants. As per AS 12 on Government Grants issued by ICAI, government grants should be recognised in the Profit and Loss statement on a systematic and rational basis over the periods necessary to match them with the related costs.

1.8 Other income

Interest income is accounted using the time proportion method. Dividend income is accounted for when the right to receive it is established.

1.9 Fixed assets and capital work in progress

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Rent paid for the period beginning/ commencing from taking over vacant possession of the premises and ending with the date of completion of project/improvements or for a period of 3 months, whichever is earlier, is capitalised under leasehold improvements.

Capital Work-In-Progress are assets not ready for the intended use as at the Balance Sheet date and include assets at new centres which have not commenced operations till balance sheet date. In case of centers closed down or relocated during the period, Written

Down Value (WDV) of leasehold improvements/ fixtures as on the date on which the centre is closed down/relocated have been fully written of.

1.10 Intangible assets

An intangible asset is recognised, where it is probable that future economic benefits attributable to the asset will flow to the enterprise and where the cost can be reliably ascertained. Intangible asset are stated at cost of acquisition less accumulated amortisation. Amortisation of the intangible assets is provided on pro-rata basis on Straight Line Method based on management''s estimate of useful life of the assets

(i) A period of 3 years on non-compete fees and content.

(ii) A period of 3 years on goodwill, based on management''s current estimate of useful life of the asset.

(iii) A period of 5 years on ERP - SAP Sofware.

(iv) A period of 5 years on purchase of License for Online teaching.

Expenses incurred on in-house development of courseware and products are shown as Capital Work In Progress till the time they have been put to use. They shall be capitalised either individually or as a knowledge bank in the form of Technology Aided Teaching (TAT)/Multimedia Sofware/Content. Their technical feasibility and ability to generate future economic benefits is established in accordance with the requirements of Accounting Standard 26, "Intangible Assets" issued by ICAI.

1.11 Foreign currency transactions and translations

Initial recognition

The transactions in foreign exchange are accounted at the exchange rate prevailing on the date of transactions. Any exchange gains or losses arising on subsequent settlement of such transactions are accounted as income or expenses in the period in which they are settled and arise.

Foreign operations

The accounts of the branch are consolidated by integral system of branch accounting. Transactions for a month are translated using the exchange rate prevailing at the end of the month, which approximates the average exchange rate. Any exchange gain/(loss) arising on the translation of the financial statement is taken to the Profit & Loss Account.

1.12 Government grants, subsidies

The Company has adopted Income Approach to recognise Government Grants. As per AS 12 on Government Grants issued by ICAI, government grants should be recognised in the profit and loss statement on a systematic and rational basis over the periods necessary to match them with the related costs. The expenses incurred in relation to the Scheme are debited to Profit & Loss Account. An appropriate amount in respect of such grant, recognising the amount of grant over the period of service rendered, is credited to income for the year even though the actual amount of such benefits may finally be settled and received afer the end of the relevant accounting period.

1.13 Investments

Long term investments are valued at cost with an appropriate provision for permanent diminution in value, if any. Investment that is readily realisable and is intended to be held for not more than one year is valued at lower of cost or realisable value.

1.14 Employee benefits

A. Provident fund

As per the Employees Provident Funds and Miscellaneous Provision Act, 1952 employees of the Company are entitled to receive benefits under the provident fund & family pension fund which is a defined contribution plan. These contributions are made to the fund administered and managed by Government of India. The Company''s contribution to the schemes is recognised as expense in the profit and loss account during the period in which the employee renders the related services. The Company has no other obligation to the plans beyond its monthly compensations.

Defined contribution plans The Company''s contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

B. Gratuity

The Company provides for gratuity obligations through a defined benefit retirement plan (the "Gratuity Plan") covering all employees. The Company makes annual contributions, premiums in respect of all qualifying employees to Life Insurance Corporation of India (LIC) for the Employees'' Group Gratuity- cum-Life Assurance Scheme. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and tenure of employment in accordance with the Payment of Gratuity Act, 1972. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation at year end, using the Projected Unit Credit Method. Actuarial gains and losses are recognised in full in the Profit and Loss Account for the period in which they occur.

The yearly premium paid to LIC of India is charged to Profit & Loss Account of the year in which it becomes payable.

C. Leave entitlement

The Company has a policy of paying Leave Encashment benefits to its employees only in the event of their resignation, based on their accumulated leave balances in accordance with the provisions of "The Bombay Shops and Establishment Act, 1948". As per the policy of the Company, an employee can accumulate a maximum of 39 days leave over a period of 2 years, afer which the leave would lapse.

Short-term employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months afer the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) In case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits Compensated absences which are not expected to occur within twelve months afer the end of the period in which the employee renders the related service are recognised as

a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.15 Segment reporting

The Company''s business activities fall within a single segment viz. conducting commercial training, coaching, tutorial classes and activities incidental and ancillary thereon. In case of geographical (secondary) segment, since segment assets and segment revenue do not exceed 10% of total business, segment reporting is not required.

1.16 Leases Operating leases

Leases where the Lessor efectively retains substantially all risks and benefits of ownership of the leased premises during the lease term are classified as operating leases. Operating lease payments are recognised as an expense in the Profit & Loss Account on a monthly accrual basis as per agreements, except in case of newly rented premises where the rent paid for the period beginning/commencing from taking over vacant possession of premises and ending with date of completion of the improvements/ project or rent paid for 3 months, whichever is earlier, is capitalised and added to the cost of leasehold improvements.

1.17 Earnings per share

Basic Earnings Per Share is calculated by dividing the Net Profit afer tax for the period attributable to equity shareholders (afer deducting preference dividends and attributable taxes) by the weighted average number of Equity Shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus, granting and vesting employee stock options to employees. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the efects of all dilutive potential Equity Shares.

1.18 Taxes on income

Current period tax is ascertained and accounted at the amount expected to be paid to Income tax authorities in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing diferences, being the diference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward losses unless there is virtual certainty that suficient future taxable income will be available against which such deferred tax assets can be realised.

1.19 Provisions and contingencies

A provision is recognised when there is a present obligation as a result of a past event; it is probable that an outflow of resources will be required to fulfill the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on best estimate required to fulfill the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the best current estimate. Contingent liabilities are not recognised but are discussed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

1.20 Inventories

Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Inventories are valued at cost or net realisable value, whichever is lower.


Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention on an accrual basis and comply with the Accounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and except for the changes, if any, in accounting policy discussed herein below in detail, are consistent with those used in the previous year.

The Company follows Mercantile System of accounting and recognises income and expenditure on accrual basis. All assets and liabilities have been classified as current and non-current as per the Companies normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. The Company has ascertained its operating cycle as 12 months for the purposes of classification of assets and liabilities into current and non-current.

1.2 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statement and the result of operations during the reporting period. Although these estimates are made on reasonable and prudent basis based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

1.3 Cash and cash equivalents

Cash comprises cash on hand, bank balances and demand deposits with banks.

1.4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.5 Depreciation and amortisation

Depreciation on all assets is provided on Written Down Value method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Depreciation on RFID Assets is provided at the rate of 60.00% p.a. on Written Down Value Method.

Individual item(s) costing less than Rs. 5,000 and not forming part of cluster of Assets (Chairs, benches, etc.) are written off at the rate of 100%.

Depreciation on assets acquired / sold during the year is provided on pro-rata basis with reference to the date of installation / put to use in the books or disposal.

Depreciation on leasehold improvements is provided at the rates applicable to furniture & fixtures and in the manner specified in Schedule XIV of the Companies Act, 1956.

1.6 Impairment of Assets

All assets other than inventories, investments and deferred tax asset, are reviewed for impairment, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount.

1.7 Revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and revenue can be reliably ascertained.

Revenue from fees received is recognised equally over the period of service rendered (course duration). At the time of admission, fees received from students are booked at gross amount and shown as 'advance fees'. Discounts and concessions are accounted for separately in a similar manner.

Upfront fee received from franchisees as brand fees is recognised as income over the period of the agreement.

Commission or royalty received from the franchisees is recognised as per the terms of agreements entered into with them.

The Company has adopted Income Approach to recognise Government Grants. As per AS 12 on Government Grants issued by ICAI, Government Grants should be recognised in the Profit and Loss statement on a systematic and rational basis over the periods necessary to match them with the related costs.

Interest is recognised using the time-proportion method.

Dividend income is recognised when the Company's right to receive dividend is established.

1.8 Fixed Assets and Capital Work In Progress

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Rent paid for the period beginning / commencing from taking over vacant possession of the premises and ending with the date of completion of project/ improvements or for a period of 3 months, whichever is earlier, is capitalised under leasehold improvements.

Capital Work-in-Progress are assets not ready for the intended use as at the Balance Sheet date and include assets at new centres which have not commenced operations till 31 March 2012.

In case of centers closed down or relocated during the period, Written Down Value of leasehold improvements / fixtures as on the date on which the centre is closed down / relocated are fully written off.

1.9 Intangible assets

An intangible asset is recognised, where it is probable that future economic benefits attributable to the asset will flow to the enterprise and where the cost can be reliably ascertained.

Intangible asset are stated at cost of acquisition less accumulated amortisation. Amortisation of the intangible assets is provided on pro-rata basis on Straight Line Method based on management's estimate of useful life of the assets.

(i) A period of 3 years on non-compete fees and Technology Aided Teaching (TAT).

(ii) A period of 3 years on goodwill, based on management's current estimate of useful life of the asset.

(iii) A period of 5 years on ERP - SAP Software.

(iv) A period of 5 years on purchase of Software License for Online teaching.

Expenses incurred on in-house development of courseware and content are shown as Capital Work In Progress till the time they have been put to use. They are capitalised either individually or as a knowledge bank in the form of Technology Aided Teaching (TAT) / Multimedia Software. Their technical feasibility and ability to generate future economic benefits is established in accordance with the requirements of Accounting Standard 26, "Intangible Assets" issued by ICAI.

1.10 Foreign currency transactions and translations

The transactions in foreign exchange are accounted at the exchange rate prevailing on the date of transactions. Any exchange gains or losses arising on subsequent settlement of such transactions are accounted as income or expenses in the period in which they are settled and arise.

The accounts of the branch are consolidated by integral system of branch accounting. Transactions for a month are translated using the exchange rate prevailing at the end of the month, which approximates the average exchange rate. Any exchange gain / (loss) arising on the translation of the financial statement is taken to the P & L Account.

1.11 Government Grants, subsidies and export incentives

The Company has adopted Income Approach to recognise Government Grants. As per AS 12 on Government Grants issued by ICAI, Government Grants should be recognised in the profit and loss statement on a systematic and rational basis over the periods necessary to match them with the related costs. The expenses incurred in relation to the Scheme are debited to P & L Account. An appropriate amount in respect of such grant, recognising the amount of grant over the period of service rendered, is credited to income for the year even though the actual amount of such benefits may finally be settled and received after the end of the relevant accounting period.

1.12 Investments

Long term investments are valued at cost with an appropriate provision for permanent diminution in value, if any.

Investment that is readily realisable and is intended to be held for not more than one year is valued at lower of cost or realisable value.

1.13 Employee benefits

A. Provident Fund

As per the Employees Provident Funds and Miscellaneous Provision Act, 1952 employees of the Company are entitled to receive benefits under the provident fund & family pension fund which is a defined contribution plan. These contributions are made to the fund administered and managed by Government of India. The Company's contribution to the schemes is recognised as expense in the P & L Account during the period in which the employee renders the related services. The Company has no other obligation to the plans beyond its monthly contributions.

Defined contribution plans

The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

B. Gratuity

The Company provides for gratuity obligations through a defined benefit retirement plan (the "Gratuity Plan") covering all employees. The Company makes annual contributions, premiums in respect of all qualifying employees to Life Insurance Corporation of India (LIC) for the Employees' Croup Gratuity-cum-Life Assurance Scheme. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment in accordance with the Payment of Gratuity Act, 1972. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation at year end, using the Projected Unit Credit Method. Actuarial gains and losses are recognised in full in the P & L Account for the period in which they occur.

The yearly premium payable to LIC is charged to P & L Account.

C. Leave Entitlement

The Company has a policy of paying Leave Encashment benefits to its employees only in the event of their resignation or retirement, based on their accumulated leave balances in accordance with the provisions of "The Bombay Shops and Establishment Act, 1948". As per the policy of the Company, an employee can accumulate a maximum of 39 days leave over a period of 2 years, after which the leave would lapse.

Long-term employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.14 Segment reporting

The Company's business activities fall within a single segment viz. conducting commercial training, coaching, tutorial classes and activities incidental and ancillary thereon. In case of geographical (secondary) segment, since segment assets and segment revenue do not exceed 10% of total business, segment reporting is not required.

1.15 Leases - Operating Leases

Leases where the Lessor effectively retains substantially all risks and benefits of ownership of the leased premises during the lease term are classified as operating leases. Operating lease payments are recognised as an expense in the P & L Account on a monthly accrual basis as per agreements, except in case of newly rented premises where the rent paid for the period beginning / commencing from taking over vacant possession of premises and ending with date of completion of the improvements / project or rent paid for 3 months, whichever is earlier, is capitalised and added to the cost of leasehold improvements.

1.16 Earnings per share

Basic Earnings Per Share is calculated by dividing the Net Profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of Equity Shares outstanding during the period. The weigh ted average numbers of equity shares outstanding during the period are adjusted for events of bonus, granting and vesting employee stock options to employees. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential Equity Shares.

1.17 Taxes on income

Current period tax is ascertained and accounted at the amount expected to be paid to Income tax authorities in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

1.18 Provisions and contingencies

A provision is recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to fulfill the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on best estimate required to fulfill the obligation as at the Balance Sheet date. These are reviewed as at each Balance Sheet date and adjusted to reflect the best current estimate. Contingent liabilities are not recognised but are discussed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

2.1 The Company came out with its Initial Public Offer (IPO) on 27 March 2012. The closing date for the issue was 29 March 2012 and the final subscription & allotment was completed on 10 April 2012.4,375,000 Equity shares have been issued but not subscribed as at 31 March 2012.

2.2 The Company has only one class of equity shares having a face value ofRs. 10 each. Each holder of equity shares is entitled to one vote per share.

2.3 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.4 The Company has reserved 272,912 Equity shares for issuance of ESOP 2011 - II Scheme.

2.5.1 The Company has established MT Associates Trust (the 'Associate Trust"), an individual irrevocable trust by means of a trust deed dated 13 May 2011 ("Trust Deed") for the benefit of certain persons associated with the Company through a subsisting valid contract of engagement for their services in their capacity as (i) faculty members across various coaching centers and courses, both full-time and part time; (ii) persons who structure and organise various courses offered by our Company; (iii) persons who manage various coaching centers and/or (iv) provide administrative assistance in relation to the business of our Company (the "Trust Beneficiaries").

Pursuant to Board and Shareholders' resolutions dated 8 April 2011 and 13 April 2011, respectively and the Trust Deed, the Company has on 2 June 2011 allotted 6,80,966 Equity Shares at a consideration of Rs. 10 per Equity Share to the Associate Trust

("Trust Shares"). The Trust Shares shall be held by the Associate Trust, in the name of the Trustee, in trust for and on behalf of the Trust Beneficiaries.

Our Company through its Board of Directors, and in consultation with the head of the department of human resources, shall, from time to time, identify the Trust Beneficiaries who are entitled to receive Trust Shares. The Trust Beneficiaries identified by our Company and communicated to the Trustee by our Board of Directors, shall be provided a grant letter by the Trustee, containing the details of the number of Trust Shares to which such Trust Beneficiary is entitled and the manner in which such Trust Shares will be transferred to such Trust Beneficiary. As at Balance Sheet Date, grant letters had been issued in relation to 297,466 shares.

3.1 Share Premium ofRs. 36.57 lakhs has arisen on issue of 140,886 shares as ESOP 2011-1 to the employees. The shares have been issued at the face value of Rs. 10 against the fair market value of Rs. 35.96 arrived at after adopting Black-Scholes model. The share premium is realised as other than cash.

3.2 The income tax refund has been credited to the reserve account as it pertains to income tax refunds received for the partnerships firms succeeded by private limited companies which amalgamated with the Company with retrospective effect from 1 April 2008 pursuant to a Scheme of Arrangement sanctioned by the Hon'ble High Court of Judicature at Bombay.

3.3 The IPO expenses debited to the reserve are net of reimbursement to be received from Selling Shareholder as part of their share in the total IPO expenses.


Mar 31, 2011

1. Basis of Accounting

The financial statements have been prepared under the historical cost convention on an accrual basis and comply with the Accounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied by the Company and except for the changes if any, in accounting policy discussed herein below in detail, are consistent with those used in the previous year.

The Company follows Mercantile System of accounting and recognizes income and expenditure on accrual basis.

2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statement and the result of operations during the reporting period. Although these estimates are made on reasonable and prudent basis based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

3. Fixed Assets and Capital Work In Progress

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Rent paid for the period beginning / commencing from taking over vacant possession of the premises and ending with the date of completion of project / improvements or for a period of 3 months, whichever is earlier, is capitalized under leasehold improvements.

Capital Work In Progress are assets not ready for the intended use as at the Balance Sheet date and include assets at new centres which have not commenced operations till 31st March, 2011.

In case of centers closed down or relocated during the year, Written Down Value (WDV) of leasehold improvements / fixtures date on which the centre is closed down / relocated have been fully written off.

4. Intangible Assets

An intangible asset is recognized, where it is probable that future economic benefits attributable to the asset will flow to the enterprise and where the cost can be reliably ascertained.

Intangible asset are stated at cost of acquisition less accumulated amortization. Amortization on the intangible assets is provided on pro-rata basis on Straight Line method based on management's estimate of useful life of the assets: i.e. over a period of 3 years on goodwill, non-compete fees and Technology Aided Teaching (TAT) and over a period of 5 years on ERP - SAP Software,

Expenses incurred on in-house development of courseware and products are shown as Capital Work in Progress till the time they have been put to use. They shall be capitalized either individually or as a knowledge bank in the form of Technology Aided Teaching (TAT) / (Multimedia Software). Their technical feasibility and ability to generate future economic benefits is established in accordance with the requirements of Accounting Standard 26, "Intangible Assets" issued by ICAI.

5. Depreciation

Depreciation on all assets is provided on Written Down Value method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

Individual item(s) costing less than Rs.5,000 and not forming part of cluster of Assets (Chairs, benches, etc.) are written off at the rate of 100%.

Depreciation on assets acquired / sold during the year is provided on pro-rata basis with reference to the date of installation / put to use, in the books or disposal.

Depreciation on leasehold improvements is provided at the rates applicable to furniture & fixtures and in the manner specified in Schedule XIV of the Companies Act, 1956.

6. Impairment of Assets

All assets other than inventories, investments and deferred tax asset, are reviewed for impairment, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount.

7. Lease Rent

Operating Leases

Leases where the Lesser effectively retains substantially all risks and benefits of ownership of the leased premises during the lease term are classified as operating leases. Operating lease payments are recognized as an expense in the Profit & Loss Account on a monthly accrual basis as per agreements, except in case of newly rented premises where the rent paid for the period beginning / commencing from taking over vacant possession of premises and ending with date of completion of the improvements / project or rent paid for 3 months whichever is earlier, is capitalized and added to the cost of leasehold improvements

8. Investment

Long term investments are valued at cost with an appropriate provision for permanent diminution in value, if any.

Investment that is readily reaiizable and is intended to be held for not more than one year is valued at lower of cost or realizable value.

9. Revenue Recognition

Revenue is recognized to the extent that it is probable that economic benefits will flow to the Company and revenue can be reliably ascertained.

Revenue from fees received is recognized equally over the period of service rendered (course duration). At the time of admission, fees received from students are booked at gross amount and shown as Advance fees'. Discounts and concessions are accounted for separately in a similar manner.

Interest income is recognized using the time-proportion method.

Dividend income is recognized when the Company's right to receive dividend is established.

10. Government Grants

The Company has adopted Income Approach to recognize Government Grants. As per Accounting Standard 12 on "Government Grants" issued by ICAI , government grants should be recognized in the Profit and Loss statement on a systematic and rational basis over the periods necessary to match them with the related costs.

The expenses incurred in relation to the Scheme are debited to Profit & Loss Account. An appropriate amount in respect of such grant, recognizing the amount of grant over the period of service rendered, is credited to income for the year even though the actual amount of such benefits may finally be settled and received after the end of the relevant accounting period.

11. Employee Benefits

A. Provident Fund

As per the Employees Provident Funds and Miscellaneous Provision Act, 1952 employees of the Company are entitled to receive benefits under the provident fund & family pension fund which is a defined contribution plan. These contributions are made to the fund administered and managed by Government of India. The Company's contribution to the scheme, is recognized as expense in the profit and loss account during the period in which the employee renders the related services. The Company has no other obligation to the plans beyond is monthly compensations.

B. Gratuity

The Company provides for gratuity obligations through a defined benefit retirement plan (the "Gratuity Plan") covering all employees. The Company makes annual contributions to Life Insurance Corporation of India (UQ for the Employees' Group Gratuity-cum-Life Assurance Scheme in respect of all qualifying employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement death, incapacitation or termination of employment, of an amount based on the respective employee's salary and tenure of employment in accordance with the Payment of Gratuity net 1972. The present value of the modern such defined benefit plan is determined based on the actuarial valuation at year end, using the Projected Unit Credit Method. Actuarial gains and losses are recognized in full in the Profit and Loss Account for the period in which they occur. The part of contribution which is towards life insurance is charged to Profit & Loss Account of the year in which it becomes payable.

C. Leave Entitlement

The Company has a policy of paying Leave Encashment benefits to its employees only in the event of their resignation, based on their accumulated leave balances in accordance with the provisions of "The Bombay Shops and Establishment Act, 1948". As per the policy of the Company, an employee can accumulate a maximum of 39 days leave over a period of 2 years, after which the leave would lapse. Accordingly, leave encashment has been provided based on -the last drawn monthly salary of employees in seine as at 31st March, 2011.

12. Provision for Current and Deferred Taxation

Current period tax is ascertained and accounted at the amount expected to be paid to Income tax authorities in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

13. Bad Debts

The management reviews on a periodical basis the outstanding sundry debtors with a view to determining whether the debts are good, bad, or doubtful. After taking into consideration all the relevant aspects including the financial condition of the students, the management determines whether the debt assets are bad wholly or in part. On the basis of such review and in pursuance of other prudent financial considerations, the business head determines the extent of bad debts. These established bad debts during the year are directly written off. Provision is made for the debts which seem to be doubtful.

14 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of a past event; it is probable that an outflow of resources will be required to fulfill the obligation and in respect of which reliable estimate can be made. Provision is not discounted to is present value and is determined based on best estimate required to fulfill the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the best current estimate. Contingent liabilities are not recognized but are discussed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

15. Earning Per Share

Basic Earning Per Share is calculated by dividing the Net Profit / (Loss) after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average numbers of Equity Shares outstanding during the period are adjusted for events of bonus issue. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential Equity Shares.

16. Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet comprise of cash in hand, cash at bank and fixed deposits.

17. Foreign Currency Transactions

The transactions in foreign exchange are accounted at the exchange rate prevailing on the date of transactions. Any exchange gains or losses arising out of the subsequent fluctuations are accounted for in Profit and loss Account.

Foreign Operations

For the current financial year accounts of the branch are consolidated by integral system of branch accounting. The monthly transactions are calculated at the month end rate for each month. Any exchange gain / (loss) arising on the translation of the financial statement is taken to the Profit & Loss Account.

18. Segment Reporting

The Company's business activities fall within a single segment viz conducting commercial training, coaching/tutorial classes and activities incidental and ancillary thereon. In case of secondary segment, since segment assets and segment revenue does not exceed 10% of total segment. Hence segment reporting is not required.

 
Subscribe now to get personal finance updates in your inbox!