bs 08 mam - Educomp Solutions Ltd.

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The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset will be realized. (xiv) Provision, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. (xv) Earning per share Basic Earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders after tax (and including post tax effect of any extra-ordinary item) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period, are adjusted for events of bonus issue to existing shareholders. For the purpose of calculating diluted earning per share, the net profits or loss attributable to equity shareholders and the weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares, if any. (xvi) Cash Flow Statement Cash flows are reported using the indirect method, whereby net profits before tax is adjusted for the effect of transaction of 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 are segregated. 2). Notes to accounts (i) Contingent Liabilities Sl. No. Particulars (Rupees in millions) As at 31 st March 2008 a. Claims against the company not acknowledged as debt 2.02 (2.02) b. c. d. e. f. g. Guarantees issued by banks on behalf of the company Corporate guarantee given to bank for secured loan to third party (related party) Corporate guarantee given to bank for secured loan to Subsidiary (related party) Uncalled liability on partly paid shares held in subsidiaries Premium on redemption of ‘US$ 13.5 million 1% Foreign Currency Convertible Bonds Due 2011” Premium on redemption of ‘US$ 80 million Zero Coupon Foreign Currency Convertible Bonds Due 2012” 331.55 (29.07) 170.00 (170.00) 120.36 (-) - (287.50) - (21.08) 1294.10 (-) Notes: 1. The loan outstanding by bank against the corporate guarantee in point no. (c) above as on 31 st March 2008 is Rs. 54.40 million (previous year 87.09 million).
2. The loan outstanding by bank against the corporate guarantee in point no. (d) above as on 31 st March 2008 is Rs. 93.43 million (previous year Nil). 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 making of calls by company and in respect of (f) & (g) 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. 7.47 million). (iii) Foreign Currency Convertible Bonds (FCCB) (a) US$ 80 Million Zero Coupon Foreign Currency Convertible Bonds (i) During the year, the company issued at par 5-year, Zero Coupon Foreign Currency Convertible Bonds (FCCB) at an exercise price of Rs. 2949.83 per share aggregating to US $ 80 million (Rs. 3,237.60 million as on the date of issue) for financing overseas acquisition, capital expenditure and other expenditure as per RBI regulation. As per terms and condition of the Offering Circular issued by the company for FCCB, the Bond are convertible by holders of the Bonds (the “Bondholders”) into fully paid equity shares of the company with full voting rights with par value Rs. 10 per share of the Company (the “Shares”) at any time on or after 4 th September 2007 (or such earlier date as is notified to the Bondholders by the Company) and prior to the close of business on 19 th July 2012, unless previously redeemed, converted or repurchased and cancelled. (ii) The Bonds may be redeemed in cash in whole, but not in part, at their Early Redemption Amount, at the option of the Company at any time on or after 25 th July 2009 and on and prior to 19 th July 2012, subject to satisfaction of certain conditions. These bonds are redeemable at 141.087% of the principal amount on July 26, 2012 unless previously converted, redeemed or purchased and cancelled. (iii) The company has incurred an expenditure of Rs. 55.05 million towards issue expenses of these bonds. These expenses have been charged to securities premium account as provided under section 78 of the Companies Act, 1956. (iv) Out of the proceeds of the bond issue, Rs. 2207.57 million (equivalent to US$ 55.04 million) is lying in fixed deposits at March 31, 2008 in foreign currency with State Bank of India, London. (b) US$ 25 Million 1% Foreign Currency Convertible Bonds In 2006 , the company had issued at par 5-year, 1% Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 25 million (Rs. 1135.25 million as on the date of issue) for financing overseas acquisition, capital expenditure and other expenditure as per RBI regulation. All outstanding 1% Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 25 million have been converted into equity shares during the year leading to the capital base by 1240750 Equity Shares and all the proceeds out of US$ 25 million bonds have been utilized as on 31.03.2008 as per the terms of the offering of FCCB. (iv) Employees Stock Option Scheme (a) Pursuant to shareholder resolution dated 24 th 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 13 th September, 2007.Till date 6,25,000 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.
Page 1 and 2: ANUPAM BANSAL & CO. CHARTERED ACCOU
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Page 9 and 10: Educomp Solutions Limited Schedules
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