a. Basis for preparation of statements
The financial statements have been prepared under the historical cost
convention in accordance with the Generally Accepted Accounting P
principles (GAPP) in India and the relevant provisions of the Companies
Act, 1956. All income and expenditure having a material bearing on
the financial statements are recognized on accrual basis. GAAP
comprises mandatory accounting standards issued by the Institute of
Chartered Accountants of India (ICAI) and the provisions of the
Companies Act, 1956 , to the extent applicable
b. Revenue Recognition
The Company follows the Mercantile System of Accounting and recognizes
Income and Expenditure on an accrual basis. Sales are recognized when
services are rendered. Interest income is recognized on a time
proportion basis taking into account the amount outstanding and the
rate applicable. Sign up Fees are accounted in the year of sign up.
c. Fixed Assets
Fixed Assets are stated at original cost less depreciation. Fixed
Assets are stated at cost of acquisition inclusive of inward freight,
duties and taxes and incidental expenses related to acquisition. In
respect of major projects involving construction related pre- operative
expenses form part of the value of the assets capitalized.
d. Capitalization and Am- ordination of Software Product
Acquisition and Product Development Costs Costs incurred towards
acquisition and development t of Computer Software products meant for
sale, lease or otherwise marketed, are capitalized until the product is
available for release to the customers. Capitalized Software Costs are
amortized on a product by product basis based on straight-line method
over the estimated economic life of the product. The carrying value of
Capitalized Software Costs is reviewed at each Balance Sheet date and
adjusted for any changes to the estimated economic life of the product.
Depreciation is charged for those assets which have been put into use
during the year under straight line method on pro rata basis at the
rates specified in Schedule XIV to the Companies Act, 1956 as amended
by the Government of India, Ministry of Law, Justice & Company Affairs
rs vide notification No. GSR 756 (E) dated 16.12.1993.
Depreciation on additions/deletions for the period is provided pro
rata with reference to the month of addition/deletion. Depreciation on
Intangible Assets (Computer Software) are provided based on the
management s estimate of useful lives and at the rate of 16.21% pro
rata with reference to the month of addition/deletion.
Investments are valued at cost price. Any temporary diminution in the
value of investment meant to be held for a long term is not recognized.
There is no impairment perceived in investments as on date.
The current charge for Income Tax and Fringe Benefit Tax is based on
the tax liability computed after considering tax allowances and
Deferred tax is provided using the liability method in respect of
taxation effect arising from all material timing difference between the
accounting and Tax treatment of Income and Expenditure which are
expected with reasonable probability to crystallize in the foreseeable
h. Earnings per Share
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of any extra- ordinary /
exceptional item. The number of shares used in computing basic earnings
per share is the weighted average number of shares outstanding during
the period. The number of shares used in computing diluted earnings per
share comprises the weighted average shares considered for deriving
basic earnings per share, and also the weighted average number of
equity shares that could have been issued on the conversion of all
dilutive potential equity shares.
i. Deferred Revenue Expenditure
The expenses relating to Brand Building and development of Course
Content is deferred and the amount is written off over a period of 5
years from the year in which the expenditure is
j. Public Issue Expenses
Expenses related to Initial Public Offering (IPO) ar e written off in 5
equal installments starting from the year of public issue.
k. Cash Flow statement
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, investing and
financing activities of the Company are segregated.
l. Employee Benefits
Expenses and Liabilities in respect of Employee benefits are recorded
in accordance with Revised Accounting Standard 15 -
Employee Benefits (Revised 2005)
Gratuity is a post employment benefit and is in the nature of a defined
benefit plan. The liability recognized in the Balance Sheet in respect
of Gratuity is the present value of the defined benefit obligation at
the Balance Sheet date less the fair value of plan assets, together
with adjustments for recognized actuarial gains or losses and past
service costs. . The defined benefit obligation is calculated at or
near the Balance Sheet date by an independent actuary using the
projected unit credit method. Actuarial gains and losses arising from
past experience and changes in actuarial assumptions are charged or
credited to the Profit and Loss Account in the year in which such gains
or losses are determined.
ii. Provident Fund
The Company makes contribution to statutory provident fund in
accordance with Employees Provident Fund and Miscellaneous provision
Act, 1952 which is a defined contribution plan and contribution payable
is recognized as an expense in the period in which services are rendered
by the employee.
Leases of assets under which significant risks and rewards of ownership
are effectively retained by the lesser are classified as operating
leases. Lease payments under an operating lease are recognized as
expense in the Profit and Loss Account on a straight tine basis over
the lease term. n. Impairment of Assets
The Company assesses at each Balance Shetdate whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the Balance Sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
o. Foreign Exchange Transactions
The Revenue earnings are accounted on estimated basis at the date of
the transaction and the Exchange Fluctuation is accounted separately on
p. Segment Reporting The Company operates in the same segment which
are subject to same risks and returns.
q. Miscellaneous Expenditure
Preliminary Expenses is amortized over a period of 10 years.
r. Interim Financial Reporting
Quarterly Financial results are published in accordance with the
guidelines given by SEBI. The recognition admeasurements and
measurement principles are laid down in the Standard are followed with
respect to such results. The Quarterly results are also subjected to a
limited review by the auditors as required by SEBI.
s. Consolidated Financial Statements
Consolidated Financial Statement of the Company and its subsidiary
Vidhyadhana Education Services Private Limited are annexed.
t. Contingent Liabilities
Depending upon the facts of each case and after due evaluation of legal
aspect, claims against the Company not acknowledged as debts are
treated as contingent liabilities. In respect of statutory dues
disputed and contested by the Company, contingent liabilities are
provided for and disclosed as per original demand without taking into
account any interest or penalty that may accrue thereafter.