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Notes to Accounts of Tree House Education & Accessories Ltd.

Mar 31, 2015

1 GENERAL INFORMATION

Tree house Education & Accessories Limited (the 'Company') was incorporated on July 10, 2006 under the Indian Companies Act, 1956 (the 'Act'). The Company is engaged in providing education and related services including leasing of education infrastructure.

The previous year's figures have been regrouped / reclassified, where ever necessary to confirm to the current year's presentation.

2 Terms / rights attached to equity shares

a The Company has only one class of shares referred to as equity shares having par value of Rs. 10. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend.

c The Company declares and pays dividends in Indian Rupees even to shareholders outside India.

3 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE Rs. EXTENT NOT PROVIDED FOR)

Particulars As at As at March 31, 2015 March 31, 2014

Commitments

Estimated amount of unexecuted 246,053,126 213,553,126 contracts

Bank guarantee given in favour 572,000 572,000 of Joint Commissioner, Sales Tax circle/charge centralsection, West Bengal.

TOTAL 246,625,126 214,125,126

4 SEGMENT INFORMATION

The activities of the Company comprise of only one business segment i.e "providing education and related services including leasing of education infrastructure". The Company operates in only one

5 RELATED PARTY DISCLOSURE

Information on related party transactions as required by Accounting Standard (AS - 18) on Related Party Disclosures for the year ended 31st March, 2015.

6 List of related party

i. Key management personnel (KMP) Key management personnel ('KMP') Mr. Rajesh Bhatia - Managing Director

Mr. Vishal Shah - Director

ii. Relatives of key management personnel Relatives of KMP Mrs. Geeta Bhatia - wife of Mr.Rajesh Bhatia

iii. Joint Venture company

JT Infrastructure Private Limited Mehta Treehouse Infrastructure Private Limited

iv. Entity over which there is a significant control Tree House Foundation

7 LEASES

Pursuant to Accounting Standard (AS-19) - Leases, the following information is given

The period of lease for the premises varies by location and ranges from 3 to 5 years.

Renewal of the lease at the end of the initial term is at mutual consent of both parties.

The Company has entered into lease conducting agreements with certain parties where the lease rentals are based on the revenue earned at the respective centers. The expected future lease payments cannot be estimated in respect of these lease conducting agreements and hence future liability in respect of the same have not been disclosed.

8 Significant leasing arrangements

a) The period of lease for the premises is 30 (Thirty) years.

b) The lease rent shall stand revised by addition of an amount equivalent to 15% at the end of every third year.

c) After the expiry of the said initial term of 30 years, the lessee has a sole option to renew the lease term for further period of 30 years

9 Notes related to ESOP plan 2010:

1. The Compensation Committee has granted on 04th January, 2011 a total of 1,400,000 options convertible into 1,400,000 Equity Shares which represents 3.89% of the paid up share capital of the Company. The fair market value Rs. 71/- on the date of grant is also the exercise price of the Option.

2. There is one employee who has been granted options equal to or exceeding 1% of the Issued Capital.

3. The Company accounts for 'Employee Share Based Payments' using the intrinsic value method.

4. The aggregate outstanding balance of the interest free loan given to Treehouse Employee Welfare Trust is Rs.13,75,265 (previous year Rs. 49,79,250) which has been grouped under Loans and Advances.

10 Notes related to ESOP plan 2012:

1. The Compensation Committee has granted on 06th September, 2012 a total of 4,00,000 options convertible into 4,00,000 Equity Shares which represents 1.11% of the paid up share capital of the Company. The fair market value of Rs 228/- on the date of grant is also the exercise price of the Option.

2. There is no employee who has been granted options equal to or exceeding 1% of the Issued Capital.

3. The Company accounts for 'Employee Share Based Payments' using the intrinsic value method.

4. The aggregate outstanding balance of the interest free loan given to Treehouse Employee Welfare Trust aggregating

Rs. 5,82,00,860 (previous year Rs. 8,09,68,500) which has been grouped under Loans and Advances.


Mar 31, 2014

1.1 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

Partculars As at Mar31 2014 As at Mar31 2013 Commitments Estimated amount of 213,553,126 401,400,277 unexecuted contract

Total 215,555,126 401,400,277

-''Consultancy income during the financial year 2013-2014 includes a sum of Rs. 18,31,75,000 towards Curriculum, Content and Development Services provided to various educational institutions. Of the said revenue a sum of Rs. 8,02,00,000 will be received in instalments over a period of 3 financial years from 2014-2015 to 2016-2017.

2.1 KINDERGARTEN AND PLAYSCHOOL BUSINESS FROM BRAINWORKS LEARNING SYSTEM PRIVATE LIMITED

The Company has acquired kindergarten and playschool business from Brainworks Learning System Private Limited with effect from 19th June, 2013 for a lump sum consideration ofRs. 5,10,00,000 (which includesRs. 10,00,000 being incidental expenses related to acquisition). The net asset acquired as a part of this acquisition was valued at Rs. 4,68,80,000. The bal- ance of the excess consideration paid over assets acquired amounting to Rs. 41,20,000 has been treated as goodwill.

2.2 SEGMENT INFORMATION

The activities of the Company comprise of only one business segment i.e "providing education and related services in- cluding leasing of education infrastructure". The Company operates in only one geographical segment i.e. India. Hence, the Company''s financial statements are reflective of the information required by Accounting Standard 17, "Segment Report- ing" notified under the Companies Act, 1956.

2.3 RELATED PARTY DISCLOSURE

In accordance with the requirements of Accounting Standard 18, "Related Party Disclosures" notified under the Companies Act, 1956, the related party disclosures are given below:

a) List of related party

i Key management personnel (KMP)

Key management personnel (''KMP'') -

Mr.Rajesh Bhatia - Managing Director

Mr.VishalShah - Director

ii Relatives of key management personnel

Relatives of KMP

Mrs. Geeta Bhatia - wife of Mr.Rajesh Bhatia

iii Joint Venture company

JT Infrastructure Private Limited

2.4 LEASES

In case of assets taken on Lease

The Lease rent and amenities charges recognized in the Statement of Profit and Loss during the year ended March 31, 2014 is Rs. 257,663,064 (previous year: Rs. 203,651,482)

Significant leasing arrangements

1.1 The period of Lease for the premises varies by Location and ranges from 3 to 5 years.

1.2 RenewaL of the Lease at the end of the initiaLterm is at mutuaL consent of both parties.

1.3 The Company has entered into Lease conducting agreements with certain parties where the Lease rentaLs are based on the revenue earned at the respective centers. The expected future Lease payments cannot be estimated in respect of these Lease conducting agreements and hence future Liability in respect of the same have not been discLosed.

In case of assets given on lease

The Lease rent income recognized in the Statement of Profit and Loss during the year ended March 31, 2014 is Rs. 306,76,046 (previous year: Rs. 12,182,240)

2.36.8 Notes related to ESOP plan 2010:

1. The Compensation Committee has granted on 04th January, 2011 a total of 1,400,000 options convertible into 1,400,000 Equity Shares which represents 3.89% of the paid up share capital of the Company. The fair market value ofRs. 71/-on the date of grant is also the exercise price of the Option.

2. There is one employee who has been granted options equal to or exceeding 1% of the Issued Capital.

3. The Company accounts for ''Employee Share Based Payments'' using the intrinsic value method.

4. The Company has given an interest free loan to Treehouse Employee Welfare Trust aggregating Rs. 49,79,250 (previous year Rs. 21,836,250) which has been grouped under Loans and Advances.

Notes related to ESOP plan 2012:

1. The Compensation Committee has granted on 06th September, 2012 a total of 4,00,000 options convertible into 4,00,000 Equity Shares which represents 1.11% of the paid up share capital of the Company. The fair market value of Rs. 228/- on the date of grant is also the exercise price of the Option.

2. There is no employee who has been granted options equal to or exceeding 1% of the Issued Capital.

3. The Company accounts for ''Employee Share Based Payments'' using the intrinsic value method.

4. The Company has given an interest free loan to Treehouse Employee Welfare Trust aggregating Rs. 8,09,68,500 (previous year Rs. 9,12,00,000) which has been grouped under Loans and Advances.


Mar 31, 2013

GENERAL INFORMATION

Treehouse Education & Accessories Limited (the ''Company'') was incorporated on July 10, 2006 under the Indian Companies Act, 1956 (the ''Act''). The Company is engaged in providing education and related services including leasing of education infrastructure.



Rs.

As at As at Particulars March 31, 2013 March 31, 2012

1.1 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Commitments

Estimated amount of unexecuted contracts 401,400,277 566,803,591

Total 401,400,277 566,803,591

1.2 SEGMENT INFORMATION

The activities of the Company comprise of only one business segment i.e "providing education and related services including leasing of education infrastructure". The Company operates in only one geographical segment i.e. India. Hence, the Company''s financial statements are reflective of the information required by Accounting Standard 17, "Segment Reporting" notified under the Companies Act, 1956.

1.3 RELATED PARTY DISCLOSURES

In accordance with the requirements of Accounting Standard 18, "Related Party Disclosures" notified under the Companies Act, 1956, the related party disclosures are given below:

a) List of related parties

i Key management personnel (KMP)

Key management personnel (''KMP'') - Mr. Rajesh Bhatia - Managing Director

- Mr. Vishal Shah - Director

ii. Relatives of key management personnel

Relatives of KMP Mrs. Geeta Bhatia - wife of Mr. Rajesh Bhatia

iii. Joint venture company

JT Infrastructure Private Limited

1.4 LEASES

In case of assets taken on lease

The lease rent and amenities charges recognised in the Statement of Profit and Loss during the year ended March 31, 2013 is Rs. 203,651,482 (previous year: Rs. 111,388,507)

1.5 EMPLOYEE STOCK OPTION PLANS

For the financial year March 31, 2013 following schemes were in operation:

1) Treehouse Education Employees'' Stock Option Plan, 2010 - ESOP A

2) Treehouse Education Employees'' Stock Option Plan, 2012 - ESOP B


Mar 31, 2012

General Information

Treehouse Education & Accessories Limited (the 'Company') was incorporated on July 10, 2006 under the Indian Companies Act, 1956 (the 'Act'). The Company is engaged in providing education and related services including leasing of education infrastructure.

The previous year's figures have been regrouped / reclassified, where ever necessary to conform to the current year's presentation.

Amounts in the notes are presented in Indian Rupees (INR), except otherwise stated.

During the year, the Company has issued and allotted the shares as detailed below:

- 280,000 equity shares of Rs. 10 each for cash consideration at a premium of Rs. 140 per share to Matrix Partners India Investment Holdings, LLC.

- 93,333 equity shares of Rs. 10 each for cash consideration at a premium of Rs. 140 per share to FC VI India Venture Mauritius Limited.

- 890,821 equity shares of Rs. 10 each for cash consideration at a premium of Rs. 140 per share to On Mauritius.

- 8,432,189 equity shares of Rs. 10 each for cash consideration at a premium of Rs. 125 per share (with discount of Rs. 6 per share to retail investors) during the initial public offering.

The following table sets out the status of the gratuity plan for the year ended March 31, 2012 in accordance with Accounting Standard 15, Employee Benefits (Revised), as notified under the Companies Act, 1956.

The Company has initiated the process of obtaining confirmation from suppliers who have registered under the Micro, Small and Medium Enterprises Devel- opment Act, 2006. Based on the information available with the Company, there is no amount outstanding as on March 31, 2012 to MSME's. There are no overdue principal amounts and therefore no interest is paid or payable.

The Company has entered into an exclusive facilitation service agreement with various educational trusts in accordance with which the Company has exclusive rights for a period of 30 years to provide various facilitation services for schools/courses to be set up by these educational trusts. The Com- pany has paid one time fixed fee to the educational trusts towards such exclusive rights. The fee paid is recognised as an intangible asset and accordingly capitalised as 'Business Commercial Rights' in the financial statements.

During the current year, the terms of payment for these Business Commercial Rights have been modified with the 'one time fixed fee' being replaced with combination of 'one time fixed fee' and 'partial interest bearing refundable deposits'. These deposits attract interest once a particular threshold on number of students as mentioned in the respective school management agreements is achieved. The interest is levied @ BPLR 2%. The deposits are repayable to the Company at the end of 5 years.

Consequently, such 'refundable deposits' amounting to Rs. 262,735,475, paid towards Business Commercial Rights and disclosed as 'Capital work-in-progress' as at March 31, 2011 have been reclassified as 'Refundable Security Deposits' and disclosed in Note 2.13, Long term loans and advances.

The Company has entered into a joint venture agreement with Jayshree Builders ('JB') to construct and rent a school building. As part of the arrangement, the Company and JB have agreed to equally contribute to share capital of JT Infrastructure Private Limited, a company in which both Treehouse Education & Accessories Limited and JB have equal share holding.

The Company has a 50% interest in the assets, liabilities, expenses and income of JT Infrastructure Private Limited, a company incorporated in India. The operations have not yet commenced and Company's share of the assets and liabilities of the jointly controlled entity as per the audited Balance Sheet of March 31, 2012 are:

Notes:

- Fixed deposits of Rs 409,030,556 (previous year Rs 270,000,001) placed with a bank against working capital loan obtained from them.

- Fixed deposits of Rs 7,223,332 (previous year Rs Nil) placed with a bank against which the bank has given a guarantee.

Contingent Liabilities and Commitments (to the extent not provided for)

As at As at

Particulars March 31, 2012 March 31, 2011

Contingent liabilities

Guarantee given for loan taken by director - 11,445,000

Commitments

Estimated amount of unexecuted contracts 566,803,591 227,366,679

Total 566,803,591 238,811,679

1.1 Segment Information

The activities of the Company comprise of only one business segment i.e "providing education and related services including leasing of education infrastructure". The Company operates in only one geographical segment i.e. India. Hence, the Company's financial statements are reflective of the information required by Accounting Standard 17, "Segment Reporting" notified under the Companies Act, 1956.

*- The value of fixed asset purchased from Mr. Rajesh Bhatia during the year amounts to Rs. 134,500,000, against which advance of Rs. 39,600,000 was paid during the previous year.

1.2 Leases

In case of assets taken on lease

The lease rent and amenities charges recognised in the Statement of Profit and Loss during the year ended March 31, 2012 is Rs. 111,388,507 (previous year: Rs. 52,158,020)

Significant leasing arrangements:

1.1. The period of lease for the premises varies by location and ranges from 3 to 5 years.

1.2. Renewal of the lease at the end of the initial term is at mutual consent of both parties.

1.3. The Company has entered into lease conducting agreements with certain parties where the lease rentals are based on the revenue earned at the respective centers. The expected future lease payments cannot be estimated in respect of these lease conducting agreements and hence future liability in respect of the same have not been disclosed.

In case of assets given on lease

The lease rent income recognised in the Statement of Profit and Loss during the year ended March 31, 2012 is Rs. 12,182,240 (previous year: Rs. 12,182,244)

Significant leasing arrangements:

1.1. The period of lease for the premises is 30 (Thirty) years.

1.2 The lease rent shall stand revised by addition of an amount equivalent to 15% at the end of every third year.

1.3 After the expiry of the said initial term of 30 years, the lessee has a sole option to renew the lease term for further period of 30 years.

* Other Services for the year ended March 31, 2011 relates to assurance services for Initial Public Offering (IPO) and hence has been adjusted against Securities Premium Account as part of share issue expenses.

1.3 Employee Stock Option Plans

The Company has implemented Employee Stock Option Plan for the key employees of the Company through the Treehouse Employees Welfare Trust (the 'Trust') formed for the purpose. All the options issued by the Company are equity share based options which have to be settled in equity shares only. The shares to be allotted to employees under the Treehouse Education Employees' Stock Option Plan, 2010 are issued to the Trust by the Company. Based on the information provided by the Trust, the details of the Treehouse Education Employees' Stock Option Plan, 2010 of the Company as at March 31, 2012 are as under:

Notes

a. The Compensation Committee has granted a total of 1,400,000 options convertible into 1,400,000 Equity Shares which represents 4.15% of the paid up share capital of the Company. The fair market value on the date of grant, Rs. 71, is also the exercise price of the Option.

b. There is one employee who has been granted options equal to or exceeding 1% of the Issued Capital.

c. The Diluted Earnings Per Share and Basic Earnings Per Share are the same, as the shares covered under options are already issued and allotted and are held by the Trust.

d. In the event of any further rights or bonus issue of equity shares after vesting but prior to exercise of the options, the Company / Trust shall consider the grant of an appropriate number of additional options, at such price as may be determined by the Compensation Committee.

e. The Company accounts for 'Employee Share Based Payments' using the fair value method.

f. The Company has given an interest free loan to Treehouse Employee Welfare Trust aggregating Rs. 99,410,000 (previous year Rs. 99,410,000) which has been grouped under Loans and Advances.

1.4 Initial Public Offer (IPO) of the Equity Shares of the Company

During the year, the Company has successfully made an IPO of 8,432,189 equity shares of Rs. 10 each constituting 25.01% of the post issue share capital of the Company at a price of Rs.135 per share including a premium of Rs.125 per share with a retail discount of Rs. 6 per equity share. The issue was opened for subscription to the public on August 10, 2011 and closed on August 12, 2011. The trading in the fully paid up shares of the Company commenced on August 26, 2011 at National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd.

The members of the Company have on February 02, 2012 approved by way of postal ballot an amendment in the utilisation of IPO proceeds.


Mar 31, 2011

1. Background

Tree House Education & Accessories Limited (the 'Company') (formerly Tree House Education & Accessories Private Limited) was incorporated on July 10, 2006 under the Indian Companies Act, 1956 (the 'Act'). The Company is engaged in providing education and related services including leasing of education infrastructure.

2. Basis of preparation

The financial statements have been prepared under Historical Cost Convention on the accrual basis of accounting, are in accordance with the applicable requirements of the Companies Act, 1956 (the 'Act') and comply in all material aspects with the Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006, to the extent applicable. The accounting policies have been consistently applied by the Company.

3. Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the year, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include useful lives of fixed assets, future obligations under employee retirement benefit plans, provision for doubtful debts and advances, etc. Actual results could differ from those estimates. Any revisions to accounting estimates are recognised prospectively in the current and future periods.

4. Business Commercial Rights

The Company has entered into an exclusive facilitation service agreement with various educational trusts based on which the Company has exclusive rights for a period of 30 years to provide various facilitation services for schools/courses to be set up by these educational trusts. The Company has paid one time fixed fee to the educational trusts towards such rights. The fee paid is recognised as an intangible asset and accordingly capitalised as 'Business Commercial Rights' in the financial statements. The annual income from these educational trusts is based on fixed fee per student admitted /enrolled with the schools /courses during the tenor of the agreement and is subject to minimum guaranteed amount each year.

The Company had prepared and submitted audited interim financial statements for the nine months ended December 31, 2010 and Business Commercial Rights were amortised over a period of 10 years. Currently, in view of the improvement in the projected cash inflows due to the expected increase in student enrolments in the schools/ courses, the management has revised the estimated useful life of Business Commercial Rights and the same are now amortised over a period of 30 years, being the period specified under the facilitation agreements.

Capital work in progress (including capital advances) includes an amount of Rs. 307,965,475 (previous year: Rs. 159,120,534) incurred towards Business Commercial Rights, which will be capitalised on commencement of operation of the schools and full payment of the agreed fees to the education institutions.

5. Joint Venture agreement

The Company has entered into a joint venture agreement with Jayshree Builders ('JB') to construct and rent a school building. As part of the arrangement, the Company and JB have agreed to equally contribute to share capital of JT Infrastructure Private Limited (Formerly known as 'Rage Realty Private Limited'), a Company in which both Tree House Education & Accessories Limited and JB have equal share holding. The Company has contributed Rs. 26,390,000 (previous year Rs. 10,145,000) towards share application money in JT Infrastructure Private Limited.

The Company has a 50% interest in the assets, liabilities, expenses and income of JT Infrastructure Private Limited, a Company incorporated in India. The operations have not commenced and Company's share of the assets and liabilities of the jointly controlled entity as per the latest available audited Balance Sheet are :

6. segment information

The activities of the Company comprise of only one business segment i.e "providing education and related services to other education institutions". The Company operates in only one geographical segment i.e. India. Hence, the Company's financial statements are reflective of the information required by Accounting Standard 17, "Segment Reporting" notified under the Companies Act, 1956.

7. Operating lease

in case of assets taken on lease

The lease rent charges of premises and furniture recognised in the Profit and Loss Account during the year ended March 31, 2011 is Rs. 58,034,527 (previous year: Rs. 38,309,794) significant leasing arrangements:

a. The period of lease for the premises varies by location and ranges from 3 to 10 years.

b. Renewal of the lease at the end of the initial term is at mutual consent of both parties.

c. For leases entered into with the promoters, promoters have a choice to terminate the lease agreement if their shareholding in the Company reduces to less than 50%.

d. The Company has entered into lease conducting agreements with certain parties where the lease rentals are based on the revenue earned at the respective centres. The expected future lease payments cannot be estimated in respect of these lease conducting agreements and hence future liability in respect of the same have not been disclosed.

Significant leasing arrangements:

a. The period of lease for the premises is 30 (Thirty) years.

b. The lease Rent shall stand revised by addition of an amount equivalent to 15% at the end of every third year.

c. After the expiry of the said initial term of 30 years, the lessee has a sole option to renew the lease term for further period of 30 years.

8. Contingent Liabilities (not provided for)

Year ended Year ended March 31, 2011 March 31, 2010

Particulars

Bank guarantees given against loan taken by director. Outstanding loan 11,445,000 11,445,000 amount as at year end is Rs. 7,466,821 (previous year: Rs. 8,983,110)

9. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 227,366,679 (previous year: Rs. 70,715,440).

10. The Company is primarily engaged in providing education services. The sale of such service 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 paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956

11. Dues to Micro, small and Medium Enterprises

The Company is in the process of identifying micro and small suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 and in the absence of information in this regard, the particulars required by the aforesaid Act have not been given.

12. Employee stock Option Plan

The Company has implemented Employee Stock Option Plan for the key employees of the Company through the Tree House Employees Welfare Trust (the 'Trust') formed for the purpose. All the options issued by the Company are equity share based options which have to be settled in equity shares only. The shares to be allotted to employees under the Tree House Education Employees' Stock Option Plan, 2010 are issued to the Trust by the Company. Based on the information provided by the Trust, the details of the Tree House Education Employees' Stock Option Plan, 2010 of the Company as at March 31, 2011 are as under:

13. Previous year's figures have been regrouped, rearranged, or recasted wherever considered necessary to conform to current year's presentation.


Mar 31, 2010

1. Background:

Tree House Education and Accessories Private Limited (the 'Company') was incorporated on July 10,2006 under the Indian Companies Act, 1956 (the 'Act').. The Company is engaged in providing education and related services.

2. Basis of preparation:

The financial statements have been prepared under historical cost convention on the accrual basis of accounting, are in accordance with the applicable requirements of the Companies Act, 1956 ('the Act') and comply in all material aspects with the Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006, to the extent applicable. The accounting policies have been consistently applied by the company.

3. Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include useful lives of fixed assets, future obligations under employee retirement benefit plans, etc. Actual results could differ from those estimates . .Any revisions to accounting estimates are recognised prospectively in the current and future periods.

4. Share issue expenses

Share issue expenses are adjusted in the same year against the securities premium account as permitted by section 78(2) of the Companies Act, 1956. In case of insufficient balances in the securities premium account, unadjusted share issue expenses are amortized over a period of 5 years. In case subsequently there arises a securities premium account, unadjusted share issue expenses would not be amortized but adjusted against the securities premium account.

5. Capita work-in-progress

Capital work in progress including capital advances aggregate to Rs.305,01O,589 (previous year: Rs.155,051,531), which primarily relate to the following:

a. The company has made part payments to various educational institutions, aggregating Rs.142,575,000 (previous year: Rs.l0,400,000) towards acquisition of exclusive rights for providing facilitation service for all schools/courses run currently or to be established in future by the respective educational institution. Against, these facilitation services, the company will earn a fixed fee per child admitted/ enrolled with the schools/courses for the entire term of agreement. The aggregate annual fee to be earned is subject to minimum guaranteed amount under the agreement with, the respective educational institutions. The agreement is effective on full payment of the agreed fixed fee by the company and on commencement of rendering of the facilitation services specified under tlle agreement. Presently, tlle projects have not commenced and accordingly, tlle payments made are disclosed as capital advances under capital work in progress.

b. Further, the Company has paid an advance of Rs.14,000,000 (previous year: Rs.14,000,000) for acquisition of properties to be used for its play school operations. The properties are under construction and the Company is in process of getting tlle title deeds transferred in its name.

6. Joint Venture agreement

The Company has entered into a joint venture agreement witll Jayshree Builders OB') to construct and. rent a school building. As part of the arrangement, the Company and JB have agreed to equally contribute to share capital of Rage Realty Private Ltd (RRL), a company formed for the joint venture. During the year, the Company has contributed Rs.10,045,000 towards share application money in RRL.

As the future liability for gratuity is provided on actuarial basis for the Company as a whole, the amount pertaining to the director is not ascertainable and, therefore, not included above.

7. Gratuity Plan

The following table sets out the status of the gratuity plan for the year ended March 31, 2010 as required under Accounting Standard 15, Employee Benefits (Revised) as notified under the Companies Act, 1956.

8. Segment information

The activities of the company comprises of only one business segment i.e "providing education and related services to other educational institutions". The Company operates in only one geographical segment i.e.

India. Hence the company's financial statement is reflective of the information required by Accounting

Standard 17 prescribed by the Companies (Accounting Standards) Rules, 2006 on Segment Reporting.

9. Operating lease

The lease rent charges of premises and furniture recognized in the profit and loss account is Rs.34,884,090 (previous year Rs .. 20,571,975).

Significant leasing arrangements:

a. The period of lease for the centers varies by location and ranges from 3 to 10 years.

b. Renewal of the lease at the end of the initial term is at mutual consent of both parties.

c. For leases entered into with the promoters, promoters have a choice to terminate the lease agreement if their shareholding in the Company reduces to less than 50%.

10. Earning / (loss) per share

The amounts considered in ascertaining the Company's earnings per share constitute the net profit/loss for the year attributable to the equity shareholders. In accordance with Accounting Standard 20, 'Earnings Per Share', basic earnings per share is computed using the weighted average number of equity shares outstanding during the year and earnings available to equity shareholders

11. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 70,715,440 (previous year: Rs. 42,385,200).

12. Share Capital

a) During the year, the Company has issued an additional 23,75,000 shares at Rs. 63.16 per share to Matrix, Partners India Investment Holding LLC ('Matrix') as further contribution towards equity share capital aggregating to Rs. 150,000,000, equivalent to USD3,090,536.

b) Subsequent to year end, Matrix and FCVI ventures Ltd ("Capital Foundation) subscribed to additional 814,259 shares and 2,804,668 shares respectively of the company at Rs. 110.53 per share as further contribution towards equity share capital aggregating to Rs. 400,000,000.

13. Quantitative Details

The company is primarily engaged in providing education services. The sale of such service 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 paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956.

14. Dues to Micro and Small Enterprises

The Company is in the process of identifying micro and small suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 and in the absence of information in this regard, the particulars required by the aforesaid Act have not been given.

15. Previous year's figures have been regrouped, rearranged, or recasted wherever considered necessary to conform to current year's presentation.

 
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