Notes to Financial Account

58 First Time Adoption of Ind AS

As stated in note 2, these are the Company's first standalone financial statements prepared in accordance with Ind AS

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS statement of financial position at April 1, 2016 (the Company's date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company's financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions (i) 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 previous GAAP and use that as its deemed cost as at the date of transition after taking necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

(ii) Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.

(iii) Decommissioning liabilities included in the cost of property, plant and equipments

Ind AS 101 permits a first-time adopter to account for the asset retirement obligations as on date of transition in accordance with the Ind AS requirements. The Company has elected and make the assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.

(iv) Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company has elected to apply Ind AS 103 retrospectively to business combinations occurring after September 2011. Business combinations occurring prior to that date have not been restated.

(v) Share based payment

Ind AS 101 permits a first time adopter to elect not to apply principles of Ind AS 102 to liabilities arising from share based payment transactions that were vested before the date of transition. The Company has elected not to apply Ind AS 102-"Share based payment" on stock options that vested before date of transition.

B. Ind AS mandatory exceptions (i) Estimates

An entity's estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

(ii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

(iii) Dereognition of financial assets and liabilities

As per Ind AS 101 an entity should apply derecognition requirements in Ind AS 109 prospectively for transaction occuring on or after the date of transition to Ind AS.

C. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

C. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

*The previous 6AAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

C. Reconciliation of total comprehensive income for the year ended March 31, 2017:

The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

C. Reconciliation of total equity as at March 31, 2017 and April 1, 2016

C. Reconciliation of total comprehensive income/ (expense)

Impact of Ind AS adoption on the statements of cash flows for the year ended March 31, 2017

There were no material differences between the statement of cash flows presented under Ind AS and the Previous GAAP except due to various re-classification adjustments recorded under Ind AS and difference in the definition of cash and cash equivalents under these two GAAPs.

C. Notes to first-time adoption: 1. Financial guarantee

Under the previous GAAP, no accounting treatment was done for financial guarantee received by the company and guarantees given to its subsidiary companies. However under Ind AS, company has to recognise the guarantee at fair value with a corresponding impact under other equity.

The impact of the above change is as follows: Financial guarantee received

Financial guarantee given

2 Remeasurements of post-employment benefit obligations

Under the previous GAAP, remeasurements i.e acturial gains and Losses on the net defined Liability were forming part of the profit or Loss for the year. Under Ind AS, actuarial gains and Losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. As a result, profit for the year ended March 31, 2017 decreased by Rs. 6.85 lacs and is reclassified to other comprehensive income. There is no impact on the total equity as at March 31, 2017.

3 Deferred tax

Under previous GAAP, deferred tax accounting was done using income statement approach, which focuses on difference between taxable profits and accounting profits for the period. Ind AS requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Transition to Ind AS has resulted in increase of net deferred tax asset by Rs. 782.97 lacs as at April 1, 2016 and Rs. 910.30 lacs as at March 31, 2017

4 Other equity

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

5 Trade Receivables

As per Ind AS, the Company is required to apply expected credit loss model for recognising the allowance for doubtful debts. The impact of the above change is as follows:

6 Security deposits

Under previous GAAP, interest free security deposits (that are refundable in cash on completion of the term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly the Company has fair valued these security deposits. Difference between the fair value and transaction value of the security deposits has been recognised as deferred rent. The impact of the above change is as follows:

7. Borrowings

Ind AS requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. The impact of the above change is as follows:

8. Revenue

Under previous GAAP admission fees and initial start-up fees was recognised upfront in statement of profit and Loss. However under Ind AS the company is required to recognise the admission fees as per the duration of the underlying course and recognise the initial start-up fees on a straight basis over the tenure of franchisee agreement. The impact of the above change is as follows:

9. Finance lease obligations

Under previous GAAP, leasehold land was capitalized at an amount equal to the upfront payments made at the time lease. However, under Ind AS, such leases are capitalised at the present value of the total minimum lease payments to be paid over the lease term. Accordingly, future lease rentals have been recognised as 'finance lease obligation' at their present values. The effect of the adjustment has resulted in reduction in retained earnings by Rs. 17.29 lacs with corresponding increase in non current borrowings by Rs. 26.80 lacs (April 1, 2016: Rs. 26.80 lacs) and current financial liabilities by Rs.19.13 lacs (April 1, 2016: Rs. 12.75 lacs). During financial year 2016-17 there was increase in PPE by Rs. 21.85 lacs (April 1, 2016: Rs. 22.26 lacs) and increase in finance cost was Rs. 6.38 lacs. The impact of the above change is as follows:

10 Other comprehensive income

Under previous GAAP, there was no requirement to disclose any item of statement of profit and loss in other comprehensive income. However as per requirement of Ind AS certain items of profit or loss are to be reclassified to other comprehensive income. Consequent to this, the Company has reclassified remeasurement of defined benefit plans from the statement of profit and loss to other comprehensive income.

11 Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

59 There are no borrowing cost have been capitalised for the year ended March 31, 2018 and March 31, 2017.

60 Previous year's figures have been regrouped / reclassified as per the current year's presentation for the purpose of comparability.