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CL Educate Ltd.

BSE: 540403 Sector: Others
NSE: CLEDUCATE ISIN Code: INE201M01011
BSE LIVE 15:40 | 17 Aug 400.10 9.90
(2.54%)
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395.05

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NSE 15:31 | 17 Aug 400.50 10.45
(2.68%)
OPEN

394.30

HIGH

402.95

LOW

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OPEN 395.05
PREVIOUS CLOSE 390.20
VOLUME 708
52-Week high 474.00
52-Week low 349.55
P/E 78.14
Mkt Cap.(Rs cr) 567
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 395.05
CLOSE 390.20
VOLUME 708
52-Week high 474.00
52-Week low 349.55
P/E 78.14
Mkt Cap.(Rs cr) 567
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CL Educate Ltd. (CLEDUCATE) - Auditors Report

Company auditors report

To

The Members of

CL Educate Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of CL Educate Limited("the Company") which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls and ensuring their operating effectiveness and the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2016 its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

(2) As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164(2) of theAct;

f. With respect to the adequacy of the internal financial controls over financialreporting of the

Company and the operating effectiveness of such controls refer to our separate Reportin "Annexure 2";

g. With respect to the other matters to be included in the Auditor's Report inaccordance with

Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us: i. The standalonefinancial statements disclose the impact of pending litigations on the standalonefinancial position of the Company Refer Note 31 to the standalone financial statements inrespect of contingent liabilities and Note 45 in respect of other pending litigations;

ii. The Company did not have any long-term contracts including derivative contractsHence the question of any material foreseeable losses does not arise;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No.103523W/W100048

Pranav Jain

Partner

Membership No. 098308

Date: July 28 2016

Place: New Delhi

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of CLEducate Limited on the standalone financial statements for the year ended March 31 2016]

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) During the year the fixed assets of the Company have been physically verified bythe management and as informed no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable having regard tothe size of the Company and the nature of its assets.

(c) The title deeds of immovable properties recorded in the books of account of theCompany are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. As informed no materialdiscrepancies were noticed on physical verification carried out during the year.

(iii) The Company has granted unsecured loans to companies and other parties covered inthe register maintained under Section 189 of the Act.

(a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the terms and conditions of loansgranted by the Company to 2 parties covered in the register maintained under Section 189of the Act (total loan amount granted during the year Rs. 10000 and balance outstandingas at balance sheet date Rs. 61472802) are prejudicial to the Company's interest onaccount of the fact that the

Company is not charging any interest on such loans.

(b) The schedule of repayment of principal and payment of interest in respect of suchloans has not been stipulated and thus we are unable to comment whether the repayments orreceipts are regular and report amounts overdue for more than ninety days if any asrequired under paragraph 3(iii)(c) of the Order.

(c) In respect of the aforesaid loans as the schedule of repayment of principal hasnot been stipulated we are unable to comment whether there is any overdue amount of loansgranted to company and other parties listed in the register maintained under Section 189of the Act..

(iv) According to the information and explanation given to us in respect of loansinvestments guarantees and securities the Company has complied with the provisions ofSection 185 and 186 of the Act.

NATURE OF NON COMPLIANCE NAME OF COMPANY/PARTY AMOUNT INVOLVED BALANCE AS AT MARCH 31 2016
Loan Given at rate of interest lower than prescribed Kestone Asia Hub Pte Ltd Nil 8570231
Career Launcher
Education Foundation 10000 52902571

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof services where the maintenance of cost records has been specified by the CentralGovernment under sub-section (1) of Section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax value added tax customs duty excise duty cess and anyother material statutory dues applicable to it however there have been significantdelays in few cases.

According to the information and explanations given to us undisputed dues in respectof provident fund employees' state insurance income tax sales tax service tax valueadded tax customs duty excise duty cess and any other material statutory duesapplicable to it which were outstanding at the year-end for a period of more than sixmonths from the date they became payable are as follows:

(Figures in )
Name of the statute Nature of the dues Amount ` Period to which the amount relates Due Date Date of Payment
Income Tax Act 1961 Advance Tax 2724334 April 1 2015 to June 30 2015 June 15 2015 Not yet paid
Income Tax Act 1961 Advance Tax 8173001 July 1 2015 to Septemeber 30 2015 September 15 2015 Not yet paid

(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax service tax value added tax customs duty excise dutyon account of any dispute are as follows:

(Figures in ? )
Name of the statute Nature of dues Amount Disputed Amount paid under protest Period to which the amount relates Forum where dispute is pending
Finance Act 1994 Service Tax 120711412 - July 2003 to September 2008 Central Excise and Service Tax Appellate Tribunal New Delhi
Finance Act 1994 Service Tax 7372308 - October 2008 to March 2009 Central Excise and Service Tax Appellate Tribunal New Delhi
Finance Act 1994 Service Tax 10664476 - April 2009 to September 2009 Central Excise and Service Tax Appellate Tribunal New Delhi
Finance Act 1994 Service Tax 71756945 21302000 October 2009 to September 2010 Central Excise and Service Tax Appellate Tribunal New Delhi
Finance Act 1994 Service Tax 16635768 - October 2010 to September 2011 Commissioner of Service Tax (Appeals) New Delhi
Finance Act 1994 Service Tax 12553238 - October 2011 to June 2012 Commissioner of Service Tax (Appeals) New Delhi
Finance Act 1994 Cenvat credit reversal 4648826 - September 2004 to March 2007 Central Excise and Service Tax Appellate Tribunal New Delhi
Finance Act 1994 Cenvat credit reversal 1569481 - October 2007 to March 2008 Central Excise and Service Tax Appellate Tribunal New Delhi
Finance Act 1994 Cenvat credit reversal 40097178 - April 2008 to March 2012 Central Excise and Service Tax Appellate Tribunal New Delhi
Income Tax Act 1961 Tax deducted at Source 35557912 - FY 2002-03 to FY 2005-06 Income Tax Appellate Tribunal New Delhi
Income Tax Act 1961 Tax deducted at Source 27330519 - FY 2006-07 to 2008-09 Income Tax Appellate Tribunal New Delhi
Income Tax Act 1961 Tax deducted at Source 38064894 - FY 2009-10 Income Tax Appellate Tribunal New Delhi
Income Tax Act 1961 Tax deducted at Source 15716776 - FY 2010-11 Commissioner of Income Tax (Appeals) New Delhi
Income Tax Act 1961 Tax deducted at Source 87668910 - FY 2011-12 Income Tax Appellate Tribunal New Delhi

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institution and banks. Thereare no debenture holders.

(ix) In our opinion and according to the information and explanations given tous the Company has utilized the money raised by way of term loans during the year for thepurposes for which they were raised. The Company has not raised money by way of publicissue offer during the year.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have not come across anyinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such cases by the Management except for:

- inappropriate actions by an employee of the Company that involved unauthorizedpayment of personal utility bills like electricity water telephone etc. and embezzlementof funds of the Company by transferring to personal bank accounts including familymembers. Total amount misappropriated was ` 3600788.

- Embezzlement of cash by center manager in collusion with 3 other employees of theCompany aggregating Rs. 1100000 at its Connaught Place New Delhi center.

According to the information and explanation given to us management has takenappropriate actions in respect of these matters. Refer note 46 of the financialstatements..

(xi) According to the information and explanations given to us managerial remunerationhas been paid/provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards.

(xiv) The Company has made preferential allotment of shares during the year under auditand in our opinion and according to the information and explanations given to us therequirement of Section 42 of the Act have been complied with and the amount raised havebeen used for the purposes for which the funds were raised.

(xv) According to the information and explanations given to us the Company hasnot entered into any non-cash transactions with directors or persons connected with him.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 103523W/W100048

Sd/-

Pranav Jain

Partner

Membership No. 098308

Date: July 28 2016

Place: New Delhi

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of CLEducate Limited on the standalone financial statements for the year ended March 31 2016]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of CL EducateLimited ("the Company") as of March 31 2016 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on

Auditing specified under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company;(2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified as at March 31 2016:

The Company does not have a comprehensive procurement policy for purchase of goods andservices which could potentially result in the Company procuring unnecessary goods andservices or procuring goods of lower quality or procure goods and services atunreasonable prices.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the Company's annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion except for the possible effects of the material weakness describedabove on the achievement of the objectives of the control criteria the Company hasmaintained in all material respects adequate internal financial controls over financialreporting and such internal financial controls over financial reporting were operatingeffectively as of March 31 2016 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the ICAI.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2016standalone financial statements of the Company and the material weakness does not affectour opinion on the standalone financial statements of the Company.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No.103523W/W100048

Pranav Jain

Partner

Membership No.098308

Place: New Delhi

Date: July 28 2016.