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Accounting Policies of MT Educare Ltd. Company

Mar 31, 2018

1 Summary of significant accounting policies

1.1 Basis of accounting and preparation of financial statements

(a) Statement of Compliance with Ind AS

These financial statements of the Company (also referred to as standalone financial statements) have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the ""Act"") read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

The financial statements for all periods and including up to year ended March 31, 2017 were prepared in accordance with the accounting standards notified under the Section 133 of the Act, read with paragraph 7 of the Companies (Accounts) Rules, 2014 (IGAAP).

These financial statements for the year ended March 31, 2018 are the first set of financial statements prepared in accordance with Ind AS. Refer note 3.2 for an explanation on how transition from IGAAP to Ind AS has affected the financial position, financial performance and cash flows of the Company.

Accounting policies have been consistently applied to all the years presented except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of business and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

(b) Basis of measurement

The financial statements have been prepared on a historical cost convention on accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:-

i) Certain financial assets and liabilities measured at fair value

ii) Share based payment measured at fair value

iii) defined benefit plans - plan assets measured at fair value

The financial statements are prepared in Indian Rupees (T) and all values are rounded off to the nearest lakhs, except when otherwise indicated.

(c) Significant accounting estimates and judgements

The preparation of financial statements in conformity with Ind AS requires the Management to make estimate and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized in the year in which the estimates are revised and in any future years affected.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes together with the accounting policies:

Note - Recognition and measurement of deferred tax asset

Note - Impairment of assets (both financial and non-financial)

Note - Fair value measurement of financial instruments Note - Useful life of Property, plant and equipment, Intangible assets and Intangible assets under development

2.2 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash at bank and on hand and short-term deposits, as defined above, net of bank overdrafts as they are considered an integral part of the Company''s cash management.

2.3 Tangible assets, Capital work in progress and Capital advances

An item of Property, Plant and Equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of Property, Plant and Equipment are carried out at cost less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price, borrowing costs, if capitalization criteria are met and any cost attributable to bringing the assets to its working condition for its intended use which includes taxes, freight, and installation and allocated incidental expenditure during construction/ acquisition and exclusive of CENVAT credit or other tax credit available to the Company.

The Company identifies and determines cost of each part of an item of Property, Plant and Equipment separately, if the part has a cost which is significant to the total cost of that item of Property, Plant and Equipment and has useful life that is materially different from that of the remaining item.

Subsequent expenditure relating to tangible assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

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.

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 are completely written off.

Capital Work-In-Progress are assets that are not ready for the intended use as at the Balance Sheet date. Capital advances represents advances given towards acquisition of property, plant and equipment and are outstanding as at the Balance Sheet date.

2.4 Intangible assets and Intangible assets under development

Intangible assets acquired separately:

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets acquired in a business combination:

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, if any.

I nternally generated Intangible Assets - Research and Development Expenditure:

Expenditure on research activities is recognised in Statement of Profit and Loss in the period in which it is incurred. An internally generated intangible asset arising from development is recognised if and only if it meets the recognition criteria of intangible assets. The amount initially recognised is the sum total of expenditure incurred from the date when the intangible asset first meets the recognition criteria. Where no intangible asset can be recognised, development expenditure is recognised in Statement of Profit and Loss in the period in which it is incurred. Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, if any.

Intangible assets under development:

Expenses incurred on in-house development of courseware and products are shown as Intangible asset under developement till the asset is ready 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 Ind AS 38, "Intangible Assets”.

2.5 Depreciation and Amortisation

Depreciation is calculated on a straight-line basis to allocate the cost of assets, net of their residual values, if any, over their estimated useful lives. Components having value significant to the total cost of the asset and life different from that of the main asset are depreciated over its useful life. The useful lives have been determined based on technical evaluation in line with useful lives mentioned in Schedule II to the Act except for air-conditioners, office equipments 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, Office equipments and Computer hardware is 6, 4 and 4 years respectively, which are grouped under Plant & Machinery (including office equipments) and computers and e-learning equipments.

Residual values, useful life of assets and methods of depreciation of property, plant and equipment are reviewed at the end of each financial year with the effect of any changes in the estimate is accounted for on a prospective basis.

Amortization of the intangible assets is provided on pro-rata basis on straight line basis based on management''s technical assessment 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

(v) A period of 3 years for content

2.6 Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. If the recoverable amount of the asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.

An impairment loss is recognised in Statement of Profit and Loss.

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 measured. Revenue is measured at the fair value of the consideration received or receivable net of returns, rebates and discounts, if any, and excluding taxes or duties collected on behalf of the Government.

Revenue from fees received is recognized equally over the period of service rendered (i.e. course duration). Fees relating to the courses starting beyond the Balance Sheet date are accounted for as ''Advance fees''. Discounts / concessions if any, are accounted for separately in a similar manner and are netted off from ''Advance Fees''.

Revenue from sale of hardware/content is recognised upon transfer of significant risk and rewards of ownership of the goods to the customer via online/offline delivery, wherever applicable, while the Company retains neither continuing managerial involvement nor the effective control.

Revenue from government projects is recognised using percentage of completion method based on the achievement of milestones.

Management fees includes fees for services rendered and is recognised using percentage of completion method based on the achievement of milestones.

2.8 Other income

Interest income from a financial asset is recognised on a time basis, by reference to the principal outstanding using the effective interest method provided it is probable that the economic benefits associated with the interest will flow to the Company and the amount of interest can be measured reliably. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of that financial asset.

Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement or underlying arrangement in case of sales provided that it is probable that the economic benefits associated with the royalty shall flow to the Company and the amount of royalty can be measured reliably.

Dividend income from investments is recognised when the Company''s right to receive dividend is established provided it is probable that the economic benefits associated with the dividend will flow to the Company as also the amount of dividend income can be measured reliably.

2.9 Foreign currency transactions and translations Initial recognition:

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Indian rupee (''), which is the Company''s functional and presentation currency. Foreign currency transactions are recorded in the functional currency by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.

Conversion:

Foreign currency monetary items are reported using the closing exchange rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when such values were determined.

Exchange differences:

Exchange differences arising on the settlement of monetary items or on reporting the Company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they occur.

2.10 Employee benefits

Employee benefits include Provident Fund, Employee State Insurance Scheme, Gratuity and Compensated Absences.

Defined contribution plan:

The Company contribution to Provident Fund and Employee State Insurance are considered as defined contribution plan and are recognised as an expense in the Statement of Profit and Loss based on the amount of contribution required to be made as and when services are rendered by the employees. The Company has no further obligations under these plans beyond its monthly contributions.

Defined benefit plan:

For Defined Benefit Plans in the form of Gratuity, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding net interest) is reflected immediately in the Balance Sheet with a charge or credit recognised in Other Comprehensive Income in the period in which they occur. Remeasurement recognised in Other Comprehensive Income is reflected immediately in retained earnings and is not reclassified to Statement of Profit and Loss. Past service cost is recognised immediately for both vested and the non-vested portion. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited taking into account the present value of available refunds and reductions in future contributions to the schemes.

Short term and Other Long term employee benefits:

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of short-term employee benefits, employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

2.11 Share based payments

Senior executives employees of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Profit and Loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

2.12 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 Lease''. Operating lease payments are recognized as an expense in the Statement of Profit and Loss 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.

Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.

2.13 Earnings per share

Basic Earnings 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 and for all periods presented 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 / 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.

2.14 Tax Expense

Tax expense represents the sum of the tax currently payable and deferred tax.

Current tax:

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using applicable tax rates that have been enacted or substantively enacted by the end of the reporting period and the provisions of the Income Tax Act, 1961 and other tax laws, as applicable.

Deferred tax:

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax are recognised in Statement of Profit and Loss, except when they relate to items that are recognised in Other Comprehensive Income or directly in equity, in which case, the current and deferred tax are also recognised in Other Comprehensive Income or directly in equity respectively.

2.15 Provisions, Contingent liabilities, contingent assets and commitments

A provision is recognized when there is a present obligation (legal or constructive) 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 to the financial statements where an inflow of economic benefits is probable.

Contingent assets are neither recognized nor disclosed in the financial statements.

Commitments include the amount of purchase order (net of advances) issued to parties for construction / completion of assets.

2.16 Inventory

Inventories comprise of tablets and SD cards.

Inventories are valued at lower of Cost and Net realisable value. Cost of inventories is determined on a weighted-average basis. Cost for this purpose includes purchase price, (excluding those subsequently recoverable by the enterprise from the concerned revenue authorities), freight inwards and other expenditure incurred in bringing such inventories to their present location and condition. Net realisable value represents the estimated selling price in the ordinary course of business less all estimated costs of completion and estimated costs necessary to make the sale.

Provision of obsolescence on inventories is made on the basis of management''s estimate based on demand and market of the inventories.

2.17 Goodwill

Goodwill is measured as the excess of the sum of the consideration transferred over the net of acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to each of the Company''s cash generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each assets in the unit. Any impairment loss for goodwill is recognised directly in Statement of Profit and Loss.

An impairment loss recognised for goodwill is not reversed in subsequent periods.

2.18 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.

2.19 Borrowings and borrowing cost

Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of cost of asset, if any. All other borrowing costs are expensed in the period in which they occur.

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

2.20 Business combinations

Business combinations are accounted for using the ''Acquisition Method''. At the acquisition date, identifiable assets acquired and liabilities assumed are measured at fair value. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition date fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. The consideration transferred is measured at fair value at acquisition date and includes the fair value of any contingent consideration. However, deferred tax asset or liability and any liability or asset relating to employee benefit arrangements arising from a business combination are measured and recognized in accordance with the requirements of Ind AS 12 ""Income Taxes"" and Ind AS 19 ""Employee Benefits"", respectively

Where the consideration transferred exceeds the fair value of the net identifiable assets acquired and liabilities assumed, the excess is recorded as ''Goodwill''. Alternatively, in case of a bargain purchase wherein the consideration transferred is lower than the fair value of the net identifiable assets acquired and liabilities assumed, the difference is recorded as a gain in other comprehensive income and accumulated in equity as ''Capital Reserve''. The costs of acquisition excluding those relating to issue of equity or debt securities are charged to the Statement of Profit and Loss in the period in which they are incurred.

In case of business combinations involving entities under common control, the above policy does not apply.

Business combinations involving entities under common control are accounted for using the ''Pooling of Interests Method''. The net assets of the transferor entity or business are accounted at their carrying amounts on the date of the acquisition subject to necessary adjustments required to harmonise accounting policies. Any excess or shortfall of the consideration paid over the share capital of transferor entity or business is recognised as ''Capital Reserve'' under equity.

2.21 Events after the reporting date

Where events occuring after the balance sheet date provide evidence of conditions that existed as at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.

2.22 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Initial recognition and measurement of financial assets and financial liabilities

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. At initial recognition, financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at Fair Value through Profit or Loss are recognised in the Statement of Profit and Loss.

(a) Financial assets

(i) Subsequent measurement

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Debt instruments that meet conditions based on purpose of holding assets and contractual terms of instrument are subsequently measured at amortised cost using effective interest method. All other financial assets are measured at fair value. Income is recognised on an effective interest basis for debt

instruments other than those financial assets classified as Fair Value Through Profit or Loss. Interest income is recognised in profit or loss and is included in the “Other income" line item.

(ii) Impairment of financial asset

The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized cost (other than trade receivables)

iii. Financial assets measured at fair value through other comprehensive income (FVTOCI)

In case of trade receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance.

In case of other assets (listed as ii and iii above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset. 12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the reporting date.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss under the head ''Other expenses''

(b) Financial liabilities and equity instruments

(i) Classification of debt or equity

Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and equity instrument.

(ii) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

(iii) Financial liabilities

All financial liabilities (other than derivative financial instruments) are measured at amortised cost using effective interest method at the end of reporting periods.

Derecognition of financial assets and financial liabilities

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or when the Company transfers the contractual rights to receive the cash flows of the financial asset in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and does not retain control of the financial asset. The Company derecognises a financial liability (or a part of financial liability) when the contractual obligation is discharged, cancelled or expires.

(c) Offsetting financial instruments

Financial assets and liabilities are offset and the net

amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

2.23 Fair value measurement

The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- I n the absence of a principal market, in the most advantageous market for the asset or liability accessible to the Company.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

3 Transition to Ind AS

For the purposes of reporting as set out in Note 2.1, the Company has transitioned basis of accounting from Indian generally accepted accounting principles (“IGAAP") to Ind AS. The accounting policies set out in note 2.1 have been applied in preparing the financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (the "transition date”).

In preparing opening Ind AS balance sheet, Company has adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected the company''s financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under IGAAP except where required by Ind AS.

A. Exemptions availed

Ind AS 101 - First-time adoption of Indian Accounting Standards, allows first-time adopters, exemptions from the retrospective application and exemption from application of certain requirements of other Ind AS. The Company has availed the following exemptions as per Ind AS 101:

1) Past Business Combination

The Company has elected not to apply Ind AS 103 "Business Combination" retrospectively to past business combination that occurred before the transition date of 1 April 2016.

2) Investment in subsidiaries

Ind AS 101 allows a first time adopter to record the carrying value of investment in subsidiaries as per IGAAP at transition date as deemed cost under Ind AS.

Accordingly, the Company has elected to carry its investment in subsidiaries at IGAAP carrying value on transition date.

3) Deemed Cost

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the IGAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their GAAP carrying value.

4) Arrangement containing a lease

I nd AS 101 provides the option to determine whether an arrangement existing at date of transition is, or contains, a lease based on the facts and circumstances at that date and not at lease start date.

Accordingly, the Company has elected to determine arrangement existing at the date of transition and not at lease start date.

3.1 Recent accounting pronouncements

(a) Standards issued but not yet effective

In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, "Revenue from Contract with Customers."

These amendments are in line with recent amendments made by International Accounting Standards Board (IASB). These amendments are applicable to the company from April 1, 2018. The company will be adopting the amendments from their effective date.

Ind AS 115, "Revenue from contract with customers”

Ind AS 115, supersedes Ind AS 11, "Construction contracts" and Ind AS 18, "Revenue". Ind AS 115 requires an entity to follow a five step model to account from revenue arising from contracts with customers. The principles of Ind AS 115 is that an entity should recognise revenue that demonstrates the transfer of promised goods and services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard can be applied either (i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 "Accounting policies, changes in accounting estimates and errors," or (ii) can be applied retrospectively with recognition of cumulative effect of contracts that are not completed contracts at the date of initial application of the standard.


Mar 31, 2016

1 Corporate information

"MT Educare Limited (earlier MT Educare Private Limited) (''MTEL'' or ''the Company'') is an education support and coaching services provider for students in the secondary and higher secondary school and for students pursuing graduation degree in commerce, preparing for various competitive examinations and undertaking chartered accountancy examinations.

The Company is now a public limited company and has received fresh certificate of incorporation dated May 18, 2011. Thereon, it has changed its name from MT Educare Private Limited to MT Educare Limited.

The Company came out with its Initial Public Offer (IPO) on March 27, 2012 and the IPO closed on March 29, 2012. The Company was listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on April 12, 2012.

2 Significant accounting policies

2.1 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 liabilities 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 noncurrent."

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 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.

2.5 Depreciation and amortization

"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 furniture’s and fixtures (which includes leasehold improvements) is provided on useful life of 8 years. During the year ended March, 2015, the company has reassessed 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-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.

(v) A period of 3 years for content."

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 Gross fees (inclusive of Robomate CRF) received is recognized equally over the period of service rendered (course duration) except CRF & Robomate. 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 recognizes the same on admission. Revenue from Gross Fees include fees from classroom coaching and government projects.

The Company has entered into agreements / arrangements with PU Colleges on revenue sharing basis where the same is recognized 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 / answers) 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 accounted on accrual basis.

2.8 Other income

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

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 March 31, 2016. 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."

2.10 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."

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.

2.12 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."

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."

2.14 Employee benefits


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.

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