Educomp Solutions

(i) Contingent Liabilities
 
                                                   (Rupees in million)
 
 SI. No.  Particulars                             As at 31st March 2009
 
 (a) Claims against the company not 
     acknowledged as debt                                  2.02
                                                          (2.02)
 (b) Guarantees issued by banks on behalf of the company 525.13
                                                        (281.55)
 (c) Corporate guarantee given to bank for 
     secured loan to third party related party)          170.00
                                                        (170.00)
 (d) Corporate guarantee given to bank for secured 
     loan to Subsidiary (related party)                 3722.80
                                                        (120.36)
 (e) Premium on redemption of US$ 80 million 
     Zero Coupon Foreign
     Currency 1643.31 Convertible Bonds Due 2012      (1294.10)
 
 Notes:
 
 1.  The loan outstanding by bank against the corporate guarantee in
 point no. (c) above as on 31 st March 2009 is Rs.42.59 million
 (previous year 54.40 million).
 
 2.  The loan outstanding by bank against the corporate guarantee in
 point no. (d) above as on 31 st March 2009 is Rs. 3593.80 million
 (previous year Rs. 93.43 million).
 
 3.  Future outflows in respect of (a) above are determinable on
 settlement of claims with the party, in respect of (b), (c) & (d) on
 crystallization and demand made by bank, in respect of (e) on
 redemption of the bonds on the maturity date, if not converted before
 the maturity date as per the terms of issue of FCCB.
 
 (Previous year figures are given in parenthesis.)
 
 (ii) Capital Commitments
 
 Estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances) Rs. Nil (Previous Year
 Rs. Nil).
 
 (iii) Employees Stock Option Scheme
 
 (a) Pursuant to shareholder resolution dated 24th August 2006, the
 Company introduced Educomp Employees Stock Option Scheme 2006 which
 provides for the issue of 625,000 equity shares to employees of the
 company and its subsidiaries.The option vesting period was initially
 for five years from the date of award of option to employees at an
 exercise price approved by the remuneration committee. However the
 vesting period was increased to seven years as per the shareholders
 approval dated 13th September, 2007.Till date 5,72,460 Stock options
 have been granted under this scheme.
 
 All the above options are planned to be settled in equity at the time
 of exercise and have maximum period of 7 years from the date of
 respective grants.
 
 (b) Pursuant to shareholder resolution dated 13th September 2007, the
 Company introduced Educomp Employees Stock Option Scheme 2007 which
 provides for the issue of 200,000 equity shares to employees of the
 company and its subsidiaries.The option vesting period was initially
 for seven years from the date of award of option to employees at an
 exercise price approved by the remuneration committee.. However the
 vesting period was increased to ten years as per the shareholders
 approval dated 11 th February, 2008.TilI date 1,56,071 Stock options
 have been granted.
 
 (c) Pursuant to shareholder resolution dated 25th November 2008, the
 Company introduced Educomp Employees Stock Option Scheme 2008 which
 provides for the issue of 250,000 equity shares to employees of the
 company and its subsidiaries.The option vesting period is Ten Years
 from the date of award of option to employees at an exercise price
 approved by the remuneration committee. Till date 171,728 stock options
 (Nil upto 31st March, 2009) have been granted.
 
 All the above options are planned to be settled in equity at the time
 of exercise and have maximum period of 10 years from the date of
 respective grants.
 
 (iv) Provision for Current tax includes provision for earlier years
 amounting to Rs 33.52 million (Previous year Rs. 2.68 million).
 Provision for Fringe benefit tax includes provision for earlier years
 amounting to Rs. 0.13 million (Previous year Rs. 0.61 million).
 
 (v) Operating lease
 
 a.  General description of lease terms:
 
 i) Assets are taken on lease over a period of 2 to 10 years.
 
 ii) Lease rentals are charged on the basis of agreed terms.
 
 c.  Assets given on lease:
 
 i) General description of lease terms:
 
 (a) Assets are given on lease over a period of 2 to 3 years
 
 (b) Lease rentals are charged on the basis of agreed terms.
 
 ii) The company has given office space on sub lease. The future minimum
 Sublease payment expected to be received as on March 31, 2009 Rs. 7.62
 million (previous year Rs 12.11).
 
 Other Income includes income from operating lease of Rs. 6.04 million
 (previous year Rs. 5.52 million) under lease and hire income.
 
 (vi) Related party Disclosures:
 
 As per Accounting Standard 18, the disclosures of transactions with
 related parties as defined in Accounting Standard are given as below:
 
 i) List of related parties & relationships:
 
 S. No.  Name of Related Party Relationship
 
 1 Educomp Learning Private Limited Subsidiary
 2 Wheitstone Productions Private Limited Companies
 3 Edumatics Corporation, Inc (Direct & Indirect
 4 Educomp Infrastructure & School Management Ltd.* holding)
 5 Educomp School Management Limited
 6 Educomp Professional Education Limited
 7 Educomp Software Limited
 8 Educomp Asia Pacific Pte. Ltd.
 9 Educomp Learning Hour Pvt. Ltd.**
 10 Authrorgen Technologies Pvt. Ltd.
 11 Educomp Infrastructure Services Pvt. Ltd.
 12 AsknLearn Pte Ltd.
 13 Wiz Learn Pte Ltd.
 14 Pave Education Pte Ltd.
 15 Singapore leaming.Com Pte Ltd.
 16 Shikhya Solutions Inc.
 17 Sawica Inc
 18 Learning Internet Inc
 19 Educomp APAC Services Ltd.
 20 A - Plus Education Solutions Pvt. Ltd.
 21 EuroKids International Limited
 22 EuroKids India Limited
 23 Educomp Higher Initiatives Pte Ltd.
 24 Educomp Raffles Higher Education Ltd.  Joint Venture of Subsidiary
 25 Mr. Shantanu Prakash Key Managerial
 26 Mr. Jagdish Prakash Personnel
 27 Learning leadership foundation Others
 28 Learning Links foundation
 29 Richmond Education society
 30 Education Quality Foundation of India
 31 Lakshya Digital Private Limited
 32 SEI Technology Private Limited
 33 Eduloans Corporation Limited
 
 *Formerly Educomp Infrastructure Private Limited **Formerly Threebrix
 E-Services Pvt. Ltd.
 
 8.  Includes transaction for the year mainly with:
 
 - Mr. Shantanu Prakash Rs. 8.40 million (Previous year Rs. 8.40
 million).
 
 - Mr. Jagdish Prakash Rs. 0.60 million (Previous year Rs. 0.60
 million).
 
 9.  Represents corporate Guarantee given to:
 
 - Educomp Asia Pacific Pte. Limited Rs. 1069.95 million (previous year
 Rs. 120.36 million). However, the loan outstanding against the
 guarantee of Rs. 1069.95 million is Rs. 999.64 million (Previous Year
 Rs. 93.43 million)
 
 - Educomp Infrastructure & School Management Ltd. Rs. 2500.00 million
 (previous year Rs. Nil). However, the loan outstanding against the
 guarantee of Rs. 2500.00 million is Rs. 2500.00 million (Previous Year
 Rs.  Nil)
 
 10.  Includes Donation given to:
 
 - Education Quality Foundation of India Rs. 1.45 million (Previous year
 Rs. 0.50 million).
 
 11.  Includes Rent paid to:
 
 - Educomp Learning Pvt. Ltd Rs. 0.29 million (Previous year Rs. 0.29
 million).
 
 - Educomp Learning Hour Pvt. Ltd. Rs. 0.17 million (Previous year Rs.
 Nil).
 
 (vii) Segment Reporting
 
 In accordance with the provision of AS 17, the company has business
 segment as primary segment. As its Secondary Segment, the company has
 only one geographical segment having 10 per cent or more of enterprise
 revenue from sales to external customers based on the geographical
 location of its customers.
 
 Revenue and expenses directly attributable to segments are reported
 under each reportable segment.AII other expenses, which are not
 attributable or allocable to segments, have been disclosed as
 un-alfocable expenses
 
 Assets and liabilities that are directly attributable to segments are
 disclosed under each reportable segment. All other assets and
 liabilities are disclosed as un-aliocable.
 
 (viii) The Company had no amounts payable to Micro, Small and Medium
 Enterprise Suppliers as defined under Section 7 of the Micro, Small and
 Medium Enterprises Development Act, 2006. The identification of Micro,
 Small and Medium Enterprise Suppliers is based on managements
 knowledge of their status.
 
 (ix) Pursuant to the notification of the Companies (Accounting
 Standards) Amendment Rules 2006 on 31 st March, 2009, the following
 changes in accounting policy / estimate have been made during the year
 :-
 
 i) Exchange differences relating to long-term monetary items, arising
 during the year, in so far as they relate to the acquisition of a
 depreciable capital asset are added to / deducted from the cost of the
 asset and depreciated over the balance life of the asset. Accordingly
 an amount of Rs.463.71 million has been added to the cost of fixed
 assets, and profit for the year is higher by this amount.
 
 ii) Exchange differences pertaining to previous accounting year, which
 were recognised in the profit & loss account, have now been reversed to
 the General Reserve, as prescribed. Accordingly Rs. 6.56 million has
 been added to the cost of fixed assets alongwith accumulated
 depreciation of Rs. (0.30) million, Rs. 26.79 million credited to the
 FCMITD Account resulting into adjustment of Rs. 19.93 through General
 Reserve.
 
 iii) Exchange differences relating to iong-term foreign currency
 monetary items, arising during the year not relating to the acquisition
 of a fixed depreciable capital asset are accumulated in Foreign
 Currency Monetary Item Translation Difference Account and amortised as
 prescribed. Accordingly an amount of Rs. 386.45 million has been
 debited to Foreign Currency Monetary Item Translation Difference
 Account and Rs. 95.08 million has been amortized during the current
 year.
 
 (x) The previous year figures have been regrouped, rearranged and
 reclassified wherever necessary to conform to current year
 classification.