You are here » Home » Companies » Company Overview » CL Educate Ltd

CL Educate Ltd.

BSE: 540403 Sector: Others
NSE: CLEDUCATE ISIN Code: INE201M01011
BSE LIVE 19:40 | 19 Oct 347.05 -13.80
(-3.82%)
OPEN

346.95

HIGH

357.25

LOW

346.00

NSE 19:31 | 19 Oct 348.35 -6.55
(-1.85%)
OPEN

350.00

HIGH

356.25

LOW

345.00

OPEN 346.95
PREVIOUS CLOSE 360.85
VOLUME 619
52-Week high 474.00
52-Week low 314.00
P/E 64.27
Mkt Cap.(Rs cr) 491
Buy Price 0.00
Buy Qty 0.00
Sell Price 347.05
Sell Qty 30.00
OPEN 346.95
CLOSE 360.85
VOLUME 619
52-Week high 474.00
52-Week low 314.00
P/E 64.27
Mkt Cap.(Rs cr) 491
Buy Price 0.00
Buy Qty 0.00
Sell Price 347.05
Sell Qty 30.00

CL Educate Ltd. (CLEDUCATE) - Director Report

Company director report

Dear Member(s)

Your Directors are pleased to present the Twenty First Annual Report on the businessand operations together with the Company's Audited Financial Statements and the Auditor'sReport thereon for the Financial Year ended March 31 2017. The results of operations forthe year under review are given below:

1. Results of Our Operations

Standalone Consolidated
FY2017 FY2016 FY2017 FY2016
Revenue from Operations 14783.60 16435.40 26986.79 27388.68
Other Income 849.42 859.74 918.74 840.31
Total Revenue (1+2) 15633.01 17295.14 27905.54 28228.99
Expenditure
Cost of Raw Material Consumed - - 869.31 649.60
Cost of Services 6257.96 7191.36 13265.30 11798.70
Purchase of Traded Goods 1218.92 1537.40 158.31 343.71
(Increase)/Decrease in Inventory of Traded Goods (65.96) 27.88 (207.70) 184.37
Employee Benefit Expenses 2404.53 2480.05 5059.41 6109.54
Other Expenses 3737.84 4272.43 4872.57 5162.60
Total Expenditure 13553.29 15509.12 24017.21 24248.53
EBIDTA (4-5) 2079.72 1786.01 3888.33 3980.46
Finance Cost 525.08 518.17 788.08 711.28
Depreciation / Amortization 478.86 621.95 641.83 796.15
Profit from Continuing Operations before Tax and minority interest (5-6-7) 1075.79 645.89 2458.42 2473.03
Tax Expenses 351.39 204.22 796.76 572.01
Profit from Continuing Operations after tax before minority interest (8-9) 724.39 441.67 1661.66 1901.03
Share of minority in profit/(loss) for the year - - - -
Profit after Tax 724.39 441.67 1661.66 1901.03
Discontinued Operations
Profit From discontinued Operations before Tax N.A. N.A. 393.67 424.19
Tax Expense of Discontinued Operations N.A. N.A. 159.66 179.08
Profit from Discontinued Operations N.A. N.A. 234.01 245.11
Profit for the year (10+15) 724.39 441.67 1895.66 2146.14

2. Financial Review

Our total revenue from operations on standalone basis de-grew by 10.05% from Rs.16435.40 lakhs in fiscal 2016 to Rs. 14783.60 lakhs in fiscal 2017 primarily on accountof a conscious decision by the management to reduce its exposure to the working capitalintensive Vocational Training business. The total revenue for the year 2017 reduced by9.61 % from Rs. 17295.14 lakhs in fiscal 2016 to Rs. 15633.01 lakhs in fiscal 2017. OurEBIDTA on standalone basis increased by 16.45% from Rs. 1786.01 lakhs in fiscal 2016 toRs. 2079.72 lakhs in fiscal 2017. This increase is primarily due to decrease in cost ofservices by 12.98% decrease in purchase of traded goods by 20.72% and decrease in otherexpenses by 12.51%. Consequently EBITDA margin increased from 10.33% in fiscal 2016 to13.30% in fiscal 2017.

Our Profit After Tax on standalone basis increased by 64.01% from Rs. 441.67 in fiscal2016 to Rs. 724.39 lakhs in fiscal 2017.

Our total revenue from operations on a consolidated basis decreased by 1.47% from Rs.27388.68 lakhs in fiscal 2016 to Rs. 26986.79 lakhs in fiscal 2017 primarily on accountof an increase in sale of products by 12.62% from Rs. 4252.31 lakhs in fiscal 2016 to Rs.4788.91 lakhs in fiscal 2017.

Our EBIDTA on consolidated basis decreased by 2.31% from Rs. 3980.46 lakhs in fiscal2016 to Rs. 3888.33 lakhs in fiscal 2017. This decrease is primarily due to increase incost of raw material and components consumed by 33.82% and cost of services by 12.43%.Consequently EBITDA margin decreased from 14.10% in fiscal 2016 to 13.93% in fiscal 2017

Our Profit after tax for the year on consolidated basis decreased by 11.67% fromRs.2146.14 lakhs in fiscal 2016 to Rs.1895.66 lakhs in fiscal 2017.

3. Dividend

Your Directors do not recommend any dividend for the Financial Year 2016-17.

4. Transfer to reserves

The Company did not transfer any amount to reserves during the year.

5. Capital and Finance

Issue of equity share capital during the Financial Year 2016-17:

(Figures in Rs..)
S. No. Date of Allotment Number of Equity Shares Face Value (Rs.) Issue Price (Rs.) Nature of Consideration Nature Of Allotment
1 October 27 2016 285711 10 350 Cash Allotment against exercise of options granted under CL ESOP Plan 2008
2 October 27 2016 150002 10 210 Cash Allotment against exercise of options granted under CL ESOP Plan 2008
3 March 29 2017 2180119 10 502 Cash Allotment Pursuant to the Initial Public Offer of the Company

1 Allotment of 28571 Equity Shares to Shantanu Prakash. 2Allotment of 15000 EquityShares to Sanjeev Srivastava.

The issued subscribed and paid up capital of the Company increased from Rs.119395880as on March 31 2016 to Rs.141632780 as on March 31 2017.

Pursuant to Section 43(a)(ii) of the Act read with Sub-rule 4 of Rule 4 of theCompanies (Share and Capital Debentures) Rules 2014 the Company has not issued anyEquity shares with differential rights during the period under review.

LISTING OF SHARES

The Company's shares got listed on National Stock Exchange of India Ltd.("NSE") & BSE Limited ("BSE") on March 31 2017. The annuallisting fee for the Financial Year 2016-17 has been paid to NSE & BSE.

6. SEGMENT REPORTING & OPERATIONAL OVERVIEW

Of the total revenues for the year ended March 31 2017 on a standalone basis approx.95% came from Operations while just 5% came from Other Income.

The company has identified two reportable business segments as primary segments:Education and training programme (including sale of study material) and Vocationaltraining. The segment have been identified and reported taking into account the nature ofproducts the differing risks and returns the organization structure and the internalfinancial reporting systems.

Education and training programme (including sale of study material) mainly includecoaching for higher education entrances. Vocational training includes specific projectsundertaken (including government projects).

Out of the Revenues from operations approx. 98.0% came from the Test Preparation andtraining segment (including sale of study material) and only 2.0% came from the VocationalTraining segment.

The segmentation of revenues by business segments on a standalone basis is as follows:

(Figures in Rs. lakhs)

FY 2017 % of total FY 2016 % of total
Education and training programme (including sale of study material) 14545.67 98.39% 12825.83 78.04%
Vocational Training 237.93 1.61% 3609.57 21.96%
Total Revenue from Operations 14783.60 100.0% 16435.40 100.0%

Our revenue from Education and Training Programme segment increased by 13.41% from Rs.12825.83 lakhs in fiscal 2016 to 14545.67 lakhs in fiscal 2017 primarily on the accountof increase in sale of study material given the increase in the average pricing across ourTest Preparation and Training course offerings over the previous year.

Our revenue from Vocational training segment decreased by 93.41% from Rs. 3609.57lakhs in fiscal 2016 to Rs. 237.93 lakhs in fiscal 2017 due to a conscious descaling ofvocational training operations by the management given the working capital intensivenature of the business The Company has identified Geographical Segment as SecondarySegment. The segmentation of revenues by geographical segment on a standalone basis is asfollows:

(Figures in Rs. lakhs)

FY 2017 % of total FY 2016 % of total
Within India 14286.10 96.63% 16051.85 97.67%
Overseas 497.50 3.37% 383.55 2.33%
Total Revenue from Operations 14783.60 100.00% 16435.40 100.00%

Of the total revenues for the year ended March 31 2016 on a consolidated basisapprox. 97% came from Operations while just 3% came from Other Income.

The group has identified six reportable business segments as primary segments:Education & training programme (including sale of study material) Sale of educationalbooks Manpower management services Marketing and sales services K - 12 and Vocationaltraining. The segments have been identified and reported taking into account the nature ofproducts the differing risks and returns the organization structure and the internalfinancial reporting system.

Education & training programme (including sale of study material) mainlyincludes coaching for higher education entrance exams.

Sale of educational books mainly includes publishing and sale of educational booksto related and third parties.

The group provides extended skilled manpower services to clients across locationsmarkets and roles ranging from managing enterprise customers to channel relationshipsto retail through Manpower management services. On the basis of clientrequirements group not only provide manpower but also equip support and manage theseskilled teams to meet the business objectives.

The group also helps its clients to conduct very large conferences combined withexhibitions and trade shows attended by thousands of persons too much targeted seminarsfor focused exclusive audiences to unique experiential activities through its Marketingand sales services.

Under the K-12 segment the group provides soft skills infrastructurefacilities and other support services to schools involved in Kindergarten to seniorsecondary studies.

Vocational training segment includes specific projects undertaken (includinggovernment projects). And Others segment includes revenue from integrated solutions toeducational institutions.

On March 16 2017 we entered into a Business Transfer Agreement (BTA) with B&SStrategy Services Private Limited and I-Take Care Private Limited to sale our K-12business of running & operating pre-schools providing school management services andInfrastructure Services business respectively on a slump sale basis. The proposed sale ofbusiness is consistent with our long term strategy of following an Asset- Light Model andhence decided to discontinue our K-12 business.

The segmentation of revenues by business segments on a consolidated basis is asfollows:

(Figures in Rs. lakhs)

FY 2017 % of total FY 2016 % of total
Education and training programme (including sale of study material) 14724.10 53.25% 12876.73 45.56%
Vocational Training 237.93 0.86% 3609.57 12.77%
Sale of educational books 4595.62 16.62% 3794.80 13.43%
Manpower Management services 1348.11 4.88% 2688.46 9.51%
Marketing and Sales Services 8094.76 29.27% 6226.15 22.03%
Others 1080.85 3.91% 1312.89 4.65%
Eliminations (3094.57) -11.19% (3119.92) -11.04%
Total Revenue from Continuing Operations 26986.79 97.60% 27388.68 96.90%
K-12 – Discontinued Operations 664.14 2.40% 875.46 3.10%
Total Revenue 27650.94 100.00% 28264.13 100.00%

Our revenue from Education and Training Programme segment increased by 14.35% from Rs.12876.73 lakhs in fiscal 2016 to

Rs. 14724.10 lakhs in fiscal 2017 primarily on the account of increase in sale ofstudy material given the increase in the average pricing across our Test Preparation andTraining course offerings over the previous year.

Our revenue from Vocational training segment decreased by 93.41% from Rs. 3609.57 lakhsin fiscal 2016 to Rs. 237.93 lakhs in fiscal 2017 due to a conscious descaling ofvocational training operations by the management given the working capital intensivenature of the business Our revenue from Manpower Management Services decreased by 49.86%from Rs. 2688.46 lakhs in fiscal 2016 to Rs. 1348.11 lakhs in fiscal 2016 given that anongoing engagement with one of our clients was not renewed during fiscal 2016 and it had aspillover effect in fiscal 2017 as well.

Our revenue from Marketing and Sales Services increased by 30.01% from Rs. 6226.15lakhs in fiscal 2016 to Rs. 8094.76 lakhs in fiscal 2017 due to an increase in bothnumber of events organized as well as an increase in average revenue earned per event. Ourrevenue from discontinued operations of K-12 segment stood at Rs. 664.14 lakhs for thefiscal 2017 vis--vis Rs. 875.46 lakhs for the fiscal 2016 During the year CL divestedits School chain comprising of its K-12 schools under the brand Indus World Schools (IWS)for an aggregate consideration ofRs. 8500 lakhs. The divestment is in line with thecompany's strategy to focus on asset-light & technology led knowledge and careerservices. The proceeds from the transaction would be used to fund growth and inorganicexpansion in asset light businesses. In fiscal 2016 Indus World School (IWS – Chainof K-12 Schools) had ~27% share of total asset but had a very small contribution torevenue and EBITDA dragging the overall profitability of the organization. Thisdivestment would help increase the overall profitability of CL Educate.

The Company has identified Geographical Segment as Secondary Segment. The segmentationof revenues by geographical segment on a consolidated basis is as follows:

(Figures in Rs. lakhs)

FY 2017 % of total FY 2016 % of total
Within India 26989.42 97.61% 27880.58 98.64%
Overseas 661.52 2.39% 383.55 1.36%
Total Revenue 27650.94 100.00% 28264.13 100.00%

Detailed analysis of performance of the company and its businesses has been presentedin the Management Discussion and Analysis section which forms a part of this report

7. Material changes

(The following Material Changes have occurred between the end of the Financial Year(March 31 2017) and the date of the report July 24 2017).

i. The Company purchased the balance 49% i.e. 5880 no. of equity shares of AccendereKnowledge Management Services Private Limited on April 12 2017 for an aggregate purchaseprice of Rs. 132300000/- (Rupees Thirteen Crore Twenty Three Lakh Only). Consequentlythe Company now holds the entire 100% equity shares of Accendere Knowledge ManagementServices Private Limited making it a wholly-owned subsidiary of the Company.

ii. The Company has entered into a Business Transfer Agreement dated April 18 2017with IndiaCan Education Private Limited pursuant to which the Company acquired all theassets and liabilities of ETEN a business division of India Can Education PrivateLimited currently running CA and Civil Services preparatory courses delivered throughVSAT.

iv. CLEIS executed a Business transfer agreement dated March 16 2017 ("CLEISBusiness Transfer Agreement") with B&S Strategy Services Private Limited("Eduvisors") with CL as a confirming party and a shareholders' agreementdated March 16 2017 ("SHA") executed among CLEIS Eduvisors and the promotersand other shareholders of Eduvisors. Pursuant to the CLEIS Business Transfer AgreementCLEIS has agreed to sell its business in relation to four pre-schools one each situatedat Indore and Gurgaon and two situated at Raipur and infrastructure and managementservices contracts of CLEIS in relation to six K-12 schools one each situated at RaipurGurgaon Bhiwani and Ludhiana and two situated at Indore including all related assets(which includes all intellectual property) liabilities rights obligations etc. of suchbusiness (collectively the "Pre-schools Business and Services Contracts") on aslump sale basis to Eduvisors. The proposed sale of Pre-schools Business and ServicesContracts was agreed to be undertaken for a lump sum consideration of Rs. 4000.00 lakhs tobe paid by Eduvisors to CLEIS in tranches including Rs. 3400.00 lakhs through issuance ofEquity Shares and Compulsorily Convertible Debentures of Eduvisors to be subscribed to byCLEIS. Pursuant to the acquisition of such securities of Eduvisors our Company throughCLEIS will indirectly hold a minority interest in Eduvisors on the Completion Date.Further the parties have also entered into the SHA for the purpose of regulating theirinter-se relationship as shareholders of Eduvisors and for certain matters including thosein relation to the restrictions on transfer of securities of Eduvisors and management andoperations of Eduvisors. The closing of the proposed sale of Pre-schools Business andServices Contracts is subject to fulfilment of certain conditions provided in the CLEISBusiness Transfer Agreement which include receipt of all corporate resolutions of CLEISand Eduvisors receipt of third party consents and execution of certain software andservice agreements by our Company or any affiliates nominated by us with Eduvisors. Thetransaction of disinvestment of the business is likely to close in Q1 2017.

v. CLIP executed a Business transfer agreement dated March 16 2017 ("CLIPBusiness Transfer Agreement") with CLEIS and I-Takecare Private Limited("I-Takecare"). Pursuant to the CLIP Business Transfer Agreement CLIP hasagreed to transfer its business of providing leasing and infrastructural services requiredfor operating K-12 schools which are run by Nalanda Foundation and all assetsliabilities rights obligations etc. thereof including land and buildings situated atRaipur and Indore and movable assets receivables and contracts in connection withoperation of the K-12 schools situated at the aforementioned locations ("SchoolInfrastructure") on a slump sale basis to I-Takecare. The proposed sale of SchoolInfrastructure is being undertaken for a lump sum consideration of Rs. 4500.00 lakhs to bepaid by I-Takecare to CLIP out of which Rs. 4000.00 lakhs is payable prior to the closingof such transaction and balance in tranches. Further under the terms of the CLIP BusinessTransfer Agreement CLIP is required to pay a monthly interest amount calculated at 11%p.a. on advance sale consideration of Rs. 100.00 lakhs received from I-Takecare from thedate of the CLIP Business Transfer Agreement until the date of closing of the transaction.The closing of the proposed sale of School Infrastructure is subject to fulfilment ofcertain conditions provided in the CLIP Business Transfer Agreement which includeexecution of sale deeds for sale of land execution of assignment deed by CLIP in relationto the infrastructure contracts entered into between CLIP and Nalanda Foundation andreceipt of all requisite consents and approvals by CLIP. The transaction of disinvestmentof the business is likely to close in Q2 2017.

vi. The Board of Directors of the Company at its meeting held on July 02 2017 gave itsin-principle approval to the acquisition of a majority stake in the shareholding of ICEGATE Educational Institute Private Limited an entity that provides testprep services forGATE subject to Financial Business & Legal Due-Diligence.

vii. The Board of Directors of the Company at its meeting held on July 24 2017approved Amendment Agreements to the Business transfer agreement (BTA) & Shareholders'Agreement (SHA) dated March 16 2017executed with B&S Strategy Services PrivateLimited ("Eduvisors") pursuant to which the following amendments were approvedby the Board of Directors with respect to the sale of four pre-schools and infrastructureand management services contracts of CLEIS in relation to six K-12 schools including allrelated assets (which includes all intellectual property) liabilities rightsobligations etc. of such business on a slump sale basis to Eduvisors:

Particulars Original Agreement dated March 16 2017 Amended Agreement approved by the Board dated July 24 2017
Total Consideration (Out of which) Rs. 4000 lakhs Rs. 4650 lakhs
Cash advance Rs. 200 lakhs Rs. 200 lakhs
Deferred Cash Rs. 400 lakhs Rs. 400 lakhs
Balance non cash – Equity 5174 shares equivalent to 26% power voting 7526 shares equivalent to 40.32% voting power
Balance non cash –Compulsorily Convertible Debentures ("CCD") 859003 CCD convertible at 8.79% power voting NIL
Effective date of the transaction April 01 2017 July 01 2017
Infrastructure contracts and related assets Included contracts other than Jhalaria and now Raipur which would have been transferred by CLIP to CLEIS and then sold by CLEIS to Eduvisors Remains in CLIP

8. Material and Significant Orders Passed By Regulators & Courts

No significant and material orders have been passed by any Regulators or Courts orTribunals against the Company impacting the going concern status and company's operationsin future.

9. Internal Financial Control Systems

CL has aligned its current systems of internal financial control with the requirementof the Companies Act 2013. The Internal Control systems are intended to increasetransparency and accountability in an organisation's process of designing and implementinga system of internal control. The framework requires a company to identify and analyserisks and manage appropriate responses. The Company has successfully laid down theframework and ensured its effectiveness. CL's internal controls are commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthoriseduse executing transactions with proper authorisation and ensuring compliance of corporatepolicies. CL has a well-defined delegation of power with authority limits for approvingrevenue as well as expenditure. Processes for formulating and reviewing annual and longterm business plans have been laid down. CL uses a state-of-the-art enterprise resourceplanning (ERP) system to record data for accounting consolidation and managementinformation purposes and connects to different locations for efficient exchange ofinformation. It has continued its efforts to align all its processes and controls withbest practices.

Our management assessed the effectiveness of the Company's internal control overfinancial reporting as of March 31 2017. The assessment involved self review peer reviewand external audit.

CL has re-appointed Axis Risk Consulting Services Pvt. Ltd. (now Genpact EnterpriseRisk Consulting LLP ) to oversee and carry out internal audit of its activities. The auditis based on an internal audit plan which is reviewed each year in consultation with thestatutory auditors (Haribhakti& Co. LLP) and the Audit Committee. The conduct ofinternal audit is oriented towards the review of internal controls and risks in itsoperations such as IT processes and general controls accounting and finance procurementemployee engagement including most of the subsidiaries. The Audit Committee reviewsreports submitted by the management and audit reports submitted by internal auditors andstatutory auditors. Suggestions for improvement are considered and the Audit Committeefollows up on corrective action. The Audit Committee also meets CL's statutory auditors toascertain inter alia their views on the adequacy of internal control systems and keepsthe Board of Directors informed of its major observations periodically.

During the year 2016-17 the Company has appointed Manchanda & ManchandaChartered Accountants in order to check upon the adequacy and effectiveness of as well asto report on the gaps in the Internal Financial Control Systems and processes within theorganization with respect to revenue procurement payroll Inventory Finance &Accounts and Statutory Compliance (Taxation) along with its recommendations. The Firmreviewed the processes and transactions and issued its summary report which was consideredby the Audit Committee.

Haribhakti & Co. LLP the statutory auditors of the Company has audited thefinancial statements included in this annual report and has issued an attestation reporton our internal controls over financial reporting (as defined in section 143 of CompaniesAct 2013).

Qualified opinion by Statutory Auditors on adequacy and therefore operatingeffectiveness of Internal Financial Controls over Financial Reporting for CL on aStandalone basis :

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting as at March 31 2017: a)The procurement policy implemented for purchase of goods and services was not operatingeffectively which could potentially result in the Company procuring unnecessary goods andservices or procuring goods of lower quality or procure goods and services at higherprices.

Management's response:

Last year the Company had formulated a comprehensive procurement policy however itwas felt that the policy was not fully and effectively being implemented on the ground. Inthe coming year Company would further tighten the implementation of the policyspecifically covering:

Periodic vendor master review

Restricted access to vendor master

Compulsory Vendor Registration Forms for vendor code creation

Requirement of at least three vendor quotations and exception approvals

Qualified opinion by Statutory Auditors on adequacy and therefore operatingeffectiveness of Internal Financial Controls over Financial Reporting for CL on aconsolidated basis :

I. According to the information and explanations given to us and based on ouraudit the following material weaknesses have been identified on the adequacy (andtherefore operating effectiveness) of the Group's Internal Financial Controls OverFinancial Reporting as at March 31 2017: a) In case of one of the subsidiary KestoneIntegrated Marketing Services Private Limited comprehensive procurement policies forpurchase of goods and services have not been documented which could potentially result inthe aforesaid company procuring unnecessary goods and services or procuring goods oflower quality or procure goods and services at higher prices. b) In case of one of thesubsidiary Kestone Integrated Marketing Services Private Limited it has not maintainedadequate documentation for ‘partially completed events' in the Event ManagementServices at any given point of time. This could potentially result in incorrect recordingof provisional revenue and corresponding provisional expenses in respect of suchincomplete services as at the reporting date. c) In case of one of the subsidiary CareerLauncher Education Infrastructure and Services Limited comprehensive policy forperiodical review and reconciliation of students and fee income recorded in the books ofaccount has not been documented. This could potentially result in incorrect recording ofrevenue.

II. According to the information and explanations given to us and based on ouraudit the following material weakness has been identified in the operating effectivenessof the Group's internal financial controls over financial reporting as at March 31 2017:a) In case of one of the Company and one of the subsidiary CL Media Private Limited theprocurement policy implemented for purchase of goods and services was not operatingeffectively which could potentially result in the Company procuring unnecessary goods andservices or procuring goods of lower quality or procure goods and services at higherprices.

Management's response:

During the course of the previous year the Company had defined and documented theprocurement related policy however the effective execution was not 100% and would befurther tightened. Further documentation related to policies in those areas is beingfurther tightened. Necessary processes related to documentation of policies/procedures andperiodical review of the policies have now been put in place or are in the process ofbeing put in place.

10. Details of Subsidiaries/Joint Ventures/Associate Companies

Our Company has seven subsidiaries (including two indirect subsidiaries) to carry outactivities in various streams of education and other educational training. A brief profileof our subsidiaries is given hereunder:

a. Kestone Integrated Marketing Services Private Limited (Kestone)

Our Company acquired Kestone on the 1st day of April 2008 and it is a wholly ownedsubsidiary. Under our brand Kestone we enjoy strong relationships with corporates to whomwe provide our integrated business marketing and sales services. Kestone focuses on awide variety of Corporates across various segments and industries.

Kestone provides integrated business marketing and sales services to our corporatecustomers including event management marketing support (including digital marketingsupport in the form of online marketing initiatives to support offline marketingcampaigns) customer engagement (including audience generation lead generation loyaltyand reward programs and contest management) managed manpower and training services. Thebusiness has shown extremely robust growth not only in top line but also in its bottomline.

The total income of Kestone was Rs. 9639.31 lakhsin Financial Year 2017 as against Rs.9735.84 Lakhs in Financial Year 2016 thereby decreasing marginally by almost 1% over theprevious year.

a.1. Kestone Asia Hub PTE. Ltd. Singapore

Kestone Asia Hub Pte. Ltd. (Previously Known as ‘Career Launcher Asia EducationalHub Pte. Ltd.' Singapore - an indirect subsidiary of CL Educate Limited) now asubsidiary company of Kestone and hence an indirect subsidiary of CL was incorporated inthe year 2008. It is currently engaged in providing integrated marketing solutions forproducts and services for and on behalf of inland and overseas clients and customers.However Kestone Asia actually started doing business in Singapore from last FinancialYear.

b. CL Media Private Limited (CL Media)

CL Media as a subsidiary of CL was incorporated on February 1 2008. CL holds 100% ofthe issued and paid-up equity capital in this company. CL Media provides integratedsolutions to educational institutions and universities including business advisory andoutreach support services.

CL Media is currently engaged in the business of content development for studymaterial publishing study material and books and providing sales & marketing servicesand research related services to Institutions and Universities.

The business has shown growth and the total income of CL Media was Rs. 3757.58 lakhs inFinancial Year 2017 as against Rs. 2988.69 lakhs in Financial Year 2016 recordingincrease by 25.73% over the previous year.

c. GK Publications Private Limited (GKP)

GK Publications Private Limited became a subsidiary of CL Educate Limited on November12 2011. As on date CL holds 100% stake in the Company. GKP is currently engaged in thebusiness of distribution of test preparation guides books and other academic material.

The business of GKP has shown substantial growth and the total income has increasedfrom about Rs. 1487.20 lakhs in 2016 to about Rs. 1893.34 lakhs in 2017 thus reflecting a27.31% increase.

d. Accendere Knowledge Management Services Private Limited (AKMS)

Accendere Knowledge Management Services Private Limited became a wholly ownedsubsidiary of the Company pursuant to the purchase of balance 49% i.e. 5880 no. of equityshares of Accendere Knowledge Management Services Private Limited by the Company on April12 2017.

Accendere was incorporated under the Companies Act 1956 on September 19 2008.Accendere is currently engaged in the business of facilitating educational institutionsand establishing their institutional credibility international presence and thoughtleadership by improving their research output in terms of both the quality and quantity ofresearch articles published by them.

The business of AKMS has shown substantial growth and the total income has increasedfrom about Rs. 131.32 lakhs in 2016 to about Rs. 178.43 lakhs in 2017 thus reflecting35.87% increase.

e. Career Launcher Education Infrastructure and Services Limited (CLEIS)

CLEIS is a wholly owned subsidiary of CL incorporated on June 16 2005. CLEIS iscurrently engaged in the business of providing educational services for K-12 schoolsincluding brand licensing and providing education soft skills under the brand Indus WorldSchool. The Company owns brand names "Indus World School" and"Ananda". As on March 31 2017 CLEIS operated 8 (eight) K-12 schools acrossIndia under the IWS brand of which two K-12 schools are owned five schools are operatedthrough an infrastructure partnership model & one school is operated througheducational partnership model.

During the year under review CLEIS executed a Business transfer agreement dated March16 2017 ("CLEIS Business Transfer Agreement") with B&S Strategy ServicesPrivate Limited ("Eduvisors") with CL as a confirming party and ashareholders' agreement dated March 16 2017 ("SHA") executed among CLEISEduvisors and the promoters and other shareholders of Eduvisors: Pursuant to the CLEISBusiness Transfer Agreement CLEIS has agreed to sell its business in relation to fourpre-schools one each situated at Indore and Gurgaon and two situated at Raipur andinfrastructure and management services contracts of CLEIS in relation to six K-12 schoolsone each situated at Raipur Gurgaon Bhiwani and Ludhiana and two situated at Indoreincluding all related assets (which includes all intellectual property) liabilitiesrights obligations etc. of such business (collectively the "Pre-schools Businessand Services Contracts") on a slump sale basis to Eduvisors.

The proposed sale of Pre-schools Business and Services Contracts was agreed to beundertaken for a lump sum consideration of Rs. 4000.00 lakhs to be paid by Eduvisors toCLEIS in tranches including Rs. 3400.00 lakhs through issuance of Equity Shares andCompulsorily Convertible Debentures of Eduvisors to be subscribed to by CLEIS. Pursuant tothe acquisition of such securities of Eduvisors our Company through CLEIS willindirectly hold a minority interest in Eduvisors on the Completion Date. Further theparties have also entered into the SHA for the purpose of regulating their inter-serelationship as shareholders of Eduvisors and for certain matters including those inrelation to the restrictions on transfer of securities of Eduvisors and management andoperations of Eduvisors. The closing of the proposed sale of Pre-schools Business andServices Contracts is subject to fulfilment of certain conditions provided in the CLEISBusiness Transfer Agreement which include receipt of all corporate resolutions of CLEISand Eduvisors receipt of third party consents and execution of certain software andservice agreements by our Company or any affiliates nominated by us with Eduvisors. Thetransaction of disinvestment of the business is likely to close in Q1 2017. The amendmentsrelated to the above transaction is mentioned in Point no. 7 (vii) in Material Changes.

e.1. Career Launcher Infrastructure Private Limited (CLIP)

CLIP a wholly owned subsidiary of CLEIS and hence a subsidiary of CL wasincorporated in the year 2008. CLIP is currently engaged in the business of providinginfrastructure facilities for K-12 schools operating under the brand Indus World School.During the year under review CLIP executed a Business transfer agreement dated March 162017 ("CLIP Business Transfer Agreement") with CLEIS and I-Takecare PrivateLimited ("I-Takecare"):

Pursuant to the CLIP Business Transfer Agreement CLIP has agreed to transfer itsbusiness of providing leasing and infrastructural services required for operating K-12schools which are run by Nalanda Foundation and all assets liabilities rightsobligations etc. thereof including land and buildings situated at Raipur and Indore andmovable assets receivables and contracts in connection with operation of the K-12 schoolssituated at the a fore mentioned locations ("School Infrastructure")on as lumpsale basistoI-Takecare.The proposed sale of School Infrastructure is being undertaken fora lump sum consideration of Rs. 4500.00 lakhs to be paid by I-Takecare to CLIP out ofwhich Rs. 4000.00 lakhs is payable prior to the closing of such transaction and balance intranches. Further under the terms of the CLIP Business Transfer Agreement CLIP isrequired to pay a monthly interest amount calculated at 11% p.a. on advance saleconsideration of Rs. 100.00 lakhs received from I-Takecare from the date of the CLIPBusiness Transfer Agreement until the date of closing of the transaction. The closing ofthe proposed sale of School Infrastructure is subject to fulfilment of certain conditionsprovided in the CLIP Business Transfer Agreement which include execution of sale deedsfor sale of land execution of assignment deed by CLIP in relation to the infrastructurecontracts entered into between CLIP and Nalanda Foundation and receipt of all requisiteconsents and approvals by CLIP. The transaction of disinvestment of the business is likelyto close in Q2 2017.

Change in the status of subsidiaries/associate companies/joint venture during theyear:

There are no associate companies or joint venture companies within the meaning ofsection 2(6) of the Companies Act 2013 ("Act").

There has been no material change in the nature of the business of the subsidiariesexcept that CLEIS & CLIP have agreed to transfer their respective (school) businessesto outside parties as has been detailed above.

Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the FinancialStatements of the Company's Subsidiaries' in Form AOC-1 is attached to the FinancialStatements (attached to this report as Annexure-I).

Further pursuant to the provisions of section 136 of the Act the Financial Statementsof the Company including the Consolidated Financial Statements along with relevantdocuments and separate audited accounts in respect of subsidiaries are available on thewebsite of the Company (www.cleducate.com).

Equity Investment in Subsidiaries

As on March 31 2017 the Company's holding in its various direct subsidiaries were asfollows: a) 1000000 Equity Shares of Rs. 10 each comprising of 100% Equity Capital inKestone Integrated Marketing Services Private Limited; b) 190000 Equity Shares of Rs. 10each comprising of 100% Equity Capital in GK Publications Private Limited; c) 10000Equity Shares of Rs. 10 each comprising of 100% Equity Capital in CL Media PrivateLimited; d) 6120 equity shares of Rs. 10 each comprising of 51% Equity Capital inAccendere Knowledge Management Services Private Limited* e) 9447606 Equity Shares of Rs.10 each comprising of 100% Equity Capital in Career Launcher Education Infrastructure andServices Limited;

*Accendere Knowledge Management Services Private Limited became a wholly ownedsubsidiary of the Company pursuant to the purchase of balance 49% i.e. 5880 no. of equityshares of Accendere Knowledge Management Services Private Limited by the Company on April12 2017.

11. Fixed Deposits

During the year under review your Company has not invited or accepted any depositsfrom the public/members pursuant to the provisions of Sections 73 and 76 of the CompaniesAct 2013 read together with the Companies (Acceptance of Deposits) Rules 2014.

12. Auditors and Auditors' Report

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Company(Audit and Auditors) Rules 2014 M/s. Haribhakti & Co. LLP Chartered AccountantsStatutory Auditors ( ICAI Firm Registration No. 103523W) holds the office till theconclusion of the Annual General Meeting for the Financial Year 2018-19 subject toratification at every Annual General Meeting. The Company has received written consent anda certificate stating that they satisfy the criteria provided under Section 141 of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 and that theappointment if ratified shall be in accordance with the applicable provisions of theCompanies Act 2013 and rules issued thereunder. As required under Clause 33 (1) (d) ofthe SEBI (LODR) Regulations 2015 M/s. Haribhakti& Co. LLP Chartered Accountantshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.

The members are requested to ratify the appointment of the Auditors as well as toauthorize the Board to fix the Auditor's remuneration.

In this connection the attention of the members is invited to item number 3 of theNotice convening the Annual General Meeting.

Statutory Auditors' Report

The auditor's qualifications in the Statutory Auditor's report/CARO Report and themanagement response thereon are as under:

Clause (iii) (a) and Clause (iv) of Annexure I to the Independent Auditor's Report:

‘The Company has granted unsecured loans to companies and other parties covered inthe register maintained under Section 189 of the Act.' (iii) (a) According to theinformation and explanations given to us and based on the audit procedures conducted byus we are of the opinion that the terms and conditions of loans granted by the Company to2 parties covered in the register maintained under

Section 189 of the Act (total loan amount granted during the year Rs. 1.10lakhs and balance outstanding as at balance sheet date Rs. 538.46 lakhs) areprejudicial to the Company's interest on account of the fact that the Company is notcharging any interest on such loans.

(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 except for the details given below:

Nature of non-compliance Name of Company/party

Amount granted during the year in Rs.

Balance as at March 31 2016 in Rs.

Loan given at rate of interest lower than prescribed Kestone Asia Hub Pte Ltd.

Nil

8.34 lakhs

Loan given at rate of interest lower than prescribed Career Launcher Education Foundation

1.10 lakhs

530.13 lakhs

Managements' response:

In view of the Business operations of CLEF (one Party) the loan amount remaineddormant during this Financial Year and for the interest of CL the outstanding loanamount has been guaranteed by Bilakes Consulting Private Limited a promoter controlledentity with the payment falling due under term of the guarantee in case of non-repaymenton or after March 31 2018.

Kestone Asia Hub Pte. Ltd. (other party) is the wholly owned subsidiary company ofKestone (wholly owned subsidiary company of CL) hence charging of interest at lower ratewill not impact the overall viability of CL Group. And as the Kestone Asia has juststarted its business in Singapore it is expected that Foreign Subsidiary will be able torepay the outstanding amount in near future.

Clause (vii) (a) of Annexure I to the Independent Auditor's Report:

(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 slight delays infew 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:

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

34.33 lakhs

April 1 2016 to June 30 2016 June 15 2016 Not yet paid
Income Tax Act 1961 Advance Tax

68.66 lakhs

July 1 2016 to September 30 2016 September 15 2016 Not yet paid

Managements' response:

Due to unpredictability of business it is slightly difficult to estimate the net taxliability to be deposited so early in the year and hence generally the Company waits tillend of the year when its liability estimates is much clear to deposit advance tax withappropriate interest

There is no instance of fraud reported by auditors under sub section (12) of section143.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company based onthe recommendation of the Audit Committee appointed M/s. S. Anantha & Ved LLPCompany Secretaries Mumbai (LLP IN: AAH-8229) as the Secretarial Auditors of the Companyon May 17 2017 for the Financial Year 2017-18.

Since the equity shares of the Company got listed on the stock exchange(s) i.e.National Stock Exchange of India Limited ("NSE") and BSE Limited("BSE") on March 31 2017 the appointment of Secretarial Auditor for theFinancial Year 2016-17 was not applicable.

Internal Auditor

Pursuant to section 138 of the Companies Act 2013 read with Companies (Accounts)Rules 2014 the Company has based on the recommendation of the Audit Committee on May17 2017 extended the existing term of M/s Axis Risk Consulting Services Private Limited(now ‘Genpact Enterprise Risk Consulting LLP') as the Internal Auditor of the Companyupto March 31 2018.

The Internal Auditor presents its audit report before the Audit Committee on aquarterly basis. The Audit Committee sets out the scope and timelines with respect to theservices rendered by the Internal Auditor as well as the fee payable against the same.

Cost Auditor

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 and Notification issued by Ministry of Corporate Affairsdated December 31 2014 on and from the Financial Year commencing April 1 2014 theCompanies in Education Sector are required to get their cost records audited.

The Company has based on the recommendation of the Audit Committee re-appointed M/sSunny Chhabra & Co. Cost Accountants as the Cost Auditor of the Company for theFinancial Year 2017-18 at the Board Meeting dated May 17 2017.

13. Directors and Key Managerial Personnel

Appointments & Resignations during the Financial Year 2016-17:

There was no change in Directors and Key Managerial Personnel during the Financial Year2016-17. However the following changes occurred in the composition of the Board ofDirectors and Key Managerial Personnel of the Company between the end of the FinancialYear (March 31 2017) and the date of the report (July 24 2017). a. Mr. Kamil HasanNon-Executive Independent Director of the Company has resigned from the Board of theCompany on and with effect from May 01 2017. b. Ms. Madhumita Ganguli has been appointedas Additional (Non-Executive Independent) Director on the Board of the Company on and witheffect from July 02 2017. c. Mr. Paresh Surendra Thakker has been appointed as Additional(Non-Executive Independent) Director on the Board of the Company on and with effect fromJuly 02 2017. d. Mr. Sudhir Bhargava has been appointed as the Chief Financial Officerand a Key Managerial Personnel of the Company on and with effect from July 02 2017. e.The Designation of Mr. Nikhil Mahajan has been changed from Executive Director & CFOto Executive Director & Group CEO Enterprise Business on and with effect from July 022017. f. Ms. Sangeeta Modi Non-Executive Independent Director of the Company has resignedfrom the Board of the Company on and with effect from July 03 2017. g. Ms. MadhumitaGanguli Additional (Non-Executive Independent) Director of the Company was appointed asMember of the Audit Committee on July 24 2017. h. Mr. Paresh Surendra Thakker Additional(Non-Executive Independent) Director of the Company was appointed as Member of the NRCCommittee on July 24 2017. i. The Designation of Mr. Gopal Jain*(DIN: 00032308) has beenchanged from Non-Executive Nominee Director to Non-Executive Non Independent Director onBoard of the Company on and with effect from July 24 2017.

* The Company has received the letter from the pre-IPO investors for withdrawing thenomination of Mr. Gopal Jain (DIN: 00032308) who was holding the office as NomineeDirector of the Company on account of which he ceased to be a Nominee (of Gaja) Directoron the Board of the Company. However taking into consideration his contribution towardsthe growth of the Company the Board of Directors at its meeting held on 24th July 2017re-designated him as a Non-Executive & Non-Independent Director liable to retire byrotation. Your Directors recommends his re-designation as Non-Executive Non-IndependentDirector of the Company.

The Directors place on record their appreciation of the valuable contribution of Ms.Sangeeta Modi & Mr. Kamil Hasan as Independent Director on the Board of the Company.

Separate resolutions seeking members' approval to the appointment of Ms. MadhumitaGanguli & Mr. Paresh Surendra Thakker as Non-Executive Independent Directors on Boardof the Company have been incorporated in the notice of the 21st Annual GeneralMeeting of the Company.

Retirement by Rotation:

Mr. Satya Narayanan .R Chairman & Whole Time Director retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment. Thebrief resume of Mr. Satya Narayanan .R and other information under Regulation 36 of theSEBI (LODR) 2015 and Secretarial Standard-2 (SS-2) with respect to his re-appointment hasbeen incorporated in the notice of the 21st Annual General Meeting of theCompany. Your Directors recommend his re-appointment.

Declaration by Independent Directors

Pursuant to sub-section (7) of Section 149 of the Companies Act 2013 the IndependentDirectors of the Company declared that they meet the criteria of independence in terms ofSection 149(6) of the Companies Act 2013 and that there was no change in their status asIndependence Directors. The Company has received the declaration of Independence from allthe Independent Directors of the Company at its Board Meeting held on April 12 2017.

Earlier pursuant to sub-section (10) & (11) of section 149 of the Companies Act2013 the board had at its Meeting held on July 22 2014 formalized the appointment ofall Independent Directors for an initial period of 5 years w.e.f April 1 2014 Furtherdetail pertaining to Independent Directors forms part of the Corporate Governance Report.

The profiles of Directors and the terms and conditions of appointment of IndependentDirectors are disclosed on the Company's website (www.cleducate.com).

Separate Meeting of Independent Director

In terms of requirements of Schedule IV of the Companies Act 2013 the IndependentDirectors of the Company met separately on March 23 2017 without the attendance ofNon-Independent Directors or any other official of the Company or members of itsmanagement to review the performance of Non-Independent Directors (including theChairman) the entire Board and the quality quantity and timeliness of the flow ofinformation between the Management and the Board.

All Directors disclosed their Directorship and Interest in other Companies in specifiedformats prescribed in Companies Act 2013.

Details of Board (& Committee) Meetings held during Financial Year 2016-17

The detail pertaining to the Number of Board (& Committee) Meetings held duringFinancial Year 2016-17 forms part of the Corporate Governance Report.

Annual Evaluation by the Board

Pursuant to the provisions of the Companies Act 2013 the Board has adopted amethodology for evaluating the performance of every individual Director of theChairperson of the Company of the Board as a whole of the Independent as well as of theNon - Independent Directors of the Company and of the functioning of the committees.

During the year 2016-17 the Board Of Directors carried out an annual evaluation of itsown performance board committees and individual directors for the year 2015-16 pursuantto the provisions of the Act and the corporate governance requirements. The performance ofthe Board as well as Committees was evaluated by the Independent Directors after seekinginputs from all the Non-Executive Directors on the basis of criteria such as the Boardcomposition and structure effectiveness of board processes information and functioningetc.

The Board and the ‘Nomination Remuneration and Compensation committee' reviewedthe performance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman of the Company was also evaluated onthe key aspects of his role.

In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the board its committees andIndividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated.

Key Managerial Personnel

As on the date of this report the following persons have been designated as KeyManagerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Actread with the Rules framed thereunder: a. Mr. Satya Narayanan .R Chairman & WholeTime Director b. Mr. Gautam Puri Vice Chairman & Managing Director c. Mr. NikhilMahajan Executive Director and Group CEO Enterprise Business (change in designation fromExecutive Director & CFO with effect from July 02 2017.) d. Ms. Rachna SharmaCompany Secretary and Compliance Officer e. Mr. Sudhir Bhargava Chief Financial Officer(with effect from July 02 2017)

14.Corporate Governance

A Report on the Corporate Governance is voluntarily disclosed and annexed for theFinancial Year under review considering SEBI (LODR) Regulations 2015 is not applicablefor the year under review on account of the listing of the shares of the Company on andfrom March 31 2017.

15. Management Discussion & Analysis

Management's Discussion and Analysis Report for the Financial Year under review asstipulated under Regulation 34 of SEBI (LODR) Regulations 2015 is presented in a separatesection forming part of the Annual Report.

17. Number of Meetings of the Board of Directors & Committees thereof

The Board of Directors of the Company met 11 (Eleven) times during the year underreview. In addition to this one meeting of Independent Directors was also held. Thedetails of the meetings of the Board including those of its Committees and IndependentDirectors' meeting are given in the Report on Corporate Governance section forming part ofthis Annual Report.

17. Composition of Audit Committee

The Audit Committee of the Board of Directors of the Company is duly constituted inaccordance with the provisions of Sections 177 (8) of the Companies Act 2013 read withRule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules 2013 andRegulation 18 of SEBI (LODR) Regulations 2015. The details of the composition powersfunctions meetings of the Committee held during the year are given in the Report toCorporate Governance section forming part of this Annual Report.

All the recommendations of the Audit Committee during the year were accepted by theBoard of Directors of the Company.

18. Vigil Mechanism / Whistle Blower Policy

Your Company has established a Vigil Mechanism/ Whistle Blower Policy in compliancewith the provisions of section 177(9) and (10) of the Companies Act 2013 and Regulation22 of SEBI (LODR) 2015 to enable stakeholders (including Directors Employees retainersfranchisees) to report unethical behavior actual or suspected fraud or violation of theCompany's Code of Conduct. The Policy provides adequate safeguards against victimizationof Director(s)/ employee(s) and direct access to the Chairman of the Audit Committee inexceptional cases. The Protected Disclosures if any reported under this Policy are to beappropriately and expeditiously investigated by the Ethics Committee. Your Company herebyaffirms that no Director/ employee has been denied access to the Chairman of the AuditCommittee and that no complaints were received during the year. The VigilMechanism/Whistle Blower Policy is available on the website of the Company(www.cleducate.com).

19. Corporate Social Responsibility

Pursuant to Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 your Company has constituted a Corporate SocialResponsibility Committee ("CSR Committee"). The Composition and the terms ofreference of the CSR Committee are provided in Corporate Governance Report. Further theCompany at the Board Meeting held on February 16 2015 approved of a Policy on CSR. ThePolicy has been hosted on the website of the Company (www.cleducate.com).

CSR Funds (Past & Present):

A table showing accumulated CSR Funds till date to be spent on CSR activities by theCompany is set out below:

Particulars 2014-15 (In Rs. ) Cumulative Amount for Financial Year 2015-16 (In Rs. ) Cumulative Amount for Financial Year 2016-17 (In Rs. )
CL Educate Limited 2.24 lakhs 16.76 lakhs 28.88 lakhs

CSR activities/projects contemplated to be taken up by the Company:

As part of CSR initiative your Company during the Financial Years 2014-15 2015-16& 2016-17 has amongst other activities earmarked the funds to be invested in the CSRactivities/ projects. It intends to spend the said amount in the following areas: (a)Driving research and innovation and funding technology incubators located within academicinstitutions which are approved by the Central Government and/or (b) Training to promoterural sports nationally recognized sports Paralympics sports and Olympic Sports; and/or(c) Protection of national heritage art and culture including restoration of buildingsand sites of historical importance and works of art setting up public librariespromotion and development of traditional arts and handicrafts. These projects are asprescribed under the Schedule VII of the Companies Act 2013.(d) Promoting educationincluding special education and employment enhancing vocation skills especially amongchildren women elderly and the differently abled and livelihood enhancement projects.

CSR Spend

Though the Company has earmarked the funds for specific CSR activities and hasdetermined target CSR activities/ projects in the education space and in research andInnovation area to be undertaken the Company has not been able to spend the mandatedamounts on the said activities till date as the capacities to spend the sanctioned amountwere being built and are now broadly in place and specific projects have been identifiedThe implementation of the planned activities has thus spilled over to the next FinancialYear the execution of which is expected to be initiated in the Financial Year 2017-18 andshould happen over the coming multiple years.

As a socially responsible Company the Company is committed to increase its CSR impactand spend over the coming years with the aim of playing a larger role in India'ssustainable development and thereby fulfill its Corporate Social Responsibility. TheAnnual report on CSR Activities is attached as Annexure- II.

20. Risk Management Policy

Your Company has a robust Risk Management policy. The Company through a steeringcommittee oversees the Risk Management process including risk identification impactassessment effective implementation of mitigation plans and risk reporting.. The RiskManagement Policy is available on the website of the Company (www.cleducate.com).

21. Directors' Nomination and Remuneration Policy

The process of determining the Remuneration of the Directors is initiated with thegeneral body of shareholders approving the overall maximum managerial remuneration thatmay be paid to the Directors generally over a period of 3 years. Within this overalllimit the actual payout is decided by the Board on the specific recommendation of theNomination Remuneration and Compensation Committee (comprising of all Non-ExecutiveDirectors with majority of them being independent) while also keeping the provisions ofCompanies Act 2013 in mind. The document evidencing the process of determination ofremuneration of Directors i.e. the latest Recommendation Report issued by the NominationRemuneration and Compensation Committee is attached as Annexure- III to thisReport.

Details of the Remuneration Recommended by NRC Committee vis a vis the Remunerationactually paid to WTDs for the Financial Year 2016-17:

(Figures in Rs. lakhs)

S. No. Whole Time Director Fixed Compensation Variable Compensation Total Compensation#
Recommended Actually Paid Recommended Actually Paid Recommended Actually Paid
1 Mr. Satya Narayanan .R 75.20 69.83 37.60 0 112.80 69.83
2 Mr. Gautam Puri 75.20 69.83 37.60 0 112.80 69.83
3 Mr. Nikhil Mahajan* 73.10 69.28 36.40 0 109.50 69.28

* This includes an amount equivalent to 10000 AED per month which is paid toMr. Nikhil Mahajan from the Company's Dubai business operations.

# This does not include Rs. 24.24 lakhspaid each to Mr. Satya Narayanan .R andMr. Gautam Puri and Rs. 23.52 lakhs to Mr Nikhil Mahajan being the variablecompensation pertaining to Financial Year 2014-15 paid out in Financial Year 2016-17.

Commission paid to Non Executive Directors for 2016-17:

(Figures in Rs. lakhs)
S. No. Non-Executive Independent Directors Commission Recommended Amount to be Paid
(% of Net Profits) (in ` Lakh)
1 Mr. Sridar Iyengar 0.25% of the net profits 3.04
2 Mr. Safir Anand 0.15% of the net profits 1.82
3 Mr. Viraj Tyagi 0.15% of the net profits 1.82
4 Mr. Kamil Hasan1 0.15% of the net profits 1.82
5 Ms. Sangeeta Modi2 0.15% of the net profits 1.82

1Mr. Kamil Hasan Non-Executive Independent Director of the Company hasresigned from the Board of the Company on and with effect from May 01 2017. 2Ms.Sangeeta Modi Non-Executive Independent Director of the Company hasresigned from theBoard of the Company on and with effect from July 03 2017.

22. Particulars of Employees

People are our most valuable asset and your Company places the engagement developmentand retention of talent as its highest priority to enable achievement of organizationalvision.

In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the relevant information as on March 31 2017 is given in Annexure - IV. In termsof the provisions of Section 197(12) of the Companies Act 2013 read with Rules 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) AmendmentRules 2016 the names of the top ten employees in terms of remuneration drawn as onMarch 31 2017 along with the relevant information thereon is given in Annexure - V.Further during the Financial Year 2016-17 there was no employee who: (i) if employedthroughout the Financial Year was in receipt of remuneration for that year which in theaggregate was not less than one crore and two lakh rupees; (ii) if employed for a part ofthe Financial Year was in receipt of remuneration for any part of that year at a ratewhich in the aggregate was not less than eight lakhs and fifty thousand rupees permonth; (iii) if employed throughout the Financial Year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the company.

23. Particulars of Loans Guarantees and Investments

Details of loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

24. Particulars of Contracts or Arrangements with Related Parties

All transactions entered by the Company with Related Parties during the Financial Year2016-17 as defined under section 2 (76) of the Companies Act 2013 read with the Companies(Specification of Definitions Details) Rules 2014 were in the Ordinary Course of Businessand were at Arm's Length pricing basis and in accordance with the provisions of theCompanies Act 2013 Rules issued thereunder and Regulation 23 of SEBI (LODR) 2015. TheAudit Committee granted omnibus approval for the transactions (which were all routine andrepetitive in nature) and the same was reviewed and approved by the Board of Directors.There were no materially significant transactions with Related Parties during theFinancial Year 2016-17 which were in conflict with the interest of the Company. Suitabledisclosures as required under AS-18 have been made in the Notes to the financialstatements.

Pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule 8(2) of theCompanies (Accounts) Rules 2014 in respect of the particulars of contracts orarrangements with related parties under section 188 in prescribed form AOC-2 is annexed asAnnexure-VI to this report.

The policy on Related Party Transactions as approved by the Board is hosted on thewebsite of the Company (www.cleducate.com)

25. Extract of Annual Return

Pursuant to Section 92 of the Companies Act 2013 read with the Rule 12 of theCompanies (Management and Administration) Rules 2014 the extract of the Annual Return inprescribed Form MGT-9 is attached as Annexure - VII to this Report.

26. Details of CL ESOP 2008 Scheme:

Particulars Details of the extant CL ESOP Scheme as on March 31 2017 (on a Cumulative basis)
(a) Options granted 312468
(b) Options vested (excluding the options that have been exercised) 108257
(c) Options exercised 80075
(d) The total number of shares arising as a result of exercise of option; 80075
The total number of options exercisable at the end of the year 108257
(e) Options forfeited/lapsed/cancelled 75636
(f) Exercise Price of outstanding ESOPs `210 – 430
(g) Variation of terms of options (The Company has adopted the Amended and Restated Career Launcher Employee Stock Options Plan 2014 in its Board Meeting held on January 29 2016 and the same has been approved by the shareholders of the Company in their EGM held on March 22 2016) There is no variation in the terms of options except: Extension of exercise period with respect to options granted to Mr. Shantanu Prakash from 36 months to 60 months at the Board meeting dated September 22 2014.
Extension of exercise period with respect to the 2nd vested options granted to independent directors of the Company was extended upto August 31 2014 at the Board meeting dated August 11 2014. Extension of exercise period with respect to options granted to independent directors of the Company from 36 months to 60 months at the Board meeting dated January 24 2013.
(h) Money realized by exercise of options Rs. 243.51 lakhs
(i) Total number of options in force 156757
(j) Employee wise details of options granted to Directors/ Key management personnel (as on date)
I. Name of Director and Key (Senior) No. of options granted under ESOP Scheme
Management Personnel
Sridar Iyengar 4000
Safir Anand 4000
Viraj Tyagi 4000
Shantanu Prakash (Ceased to be a director on Board of CLEIS on and with effect from April 1 2015) 142857
Sanjeev Srivastava 25000
Ajit Kumar 6500
Himanshu Jain 4100
Piyush Gupta 46500
Ruchika Govila 2500
Rachna Sharma 3000
Soumya Dutta Gupta 5000
Total 247457
II. Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year Name of Employee No. of options granted under ESOP Scheme
Year 2011-12 Total No. of grants: 37500
More than 5%
Sanjay Shivnani# 12000 (32.00%)
Dipanjan Das # 6000 (16.00%)
Saaket Arora # 4000 (10.67%)
Vinod V V# 2500 (6.67%)
Year 2013-14 Total No. of grants 5000
More than 5%
Vivek Garg # 5000 (100%)
Year 2014-15total no. of grants: 23500
More than 5% :
Niharika Mittal# 2500 (10.64%)
Vivek Garg# 2000 (8.51%)
Manav Agarwal# 2000 (8.51%)
Year 2016-17 Total No. of grants: 40000
More than 5%
Piyush Gupta 35000 (87.50%)
Soumya Dutta Gupta 5000 (12.50%)
#As on date these are no more the employees of the Company
III. Identified employees who were granted options during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of our Company at the time of grant. Mr. Shantanu Prakash (then director on the board of CLEIS) was granted 142857 options on January 28 2009 which was approximately 1.63% of the issued capital at the time of the grant.

Shares issued under ESOP during Financial Year 2016-17

Details of options exercised during the Financial Year 2016-17

S.No. Date of Allotment Name of the Allottee No. of Options Exercised Price per Share (`)
1 October 27 2016 Mr. Shantanu Prakash 28571 350
2 October 27 2016 Mr. Sanjeev Srivastava 15000 210

A certificate from M/s. Haribhakti & Co. LLP Chartered Accountants with regardsto the implementation of the Company's Employee Stock Option Scheme in line with SEBI(Share Based Employees Benefits) Regulations 2014 would be placed in the ensuing AnnualGeneral Meeting.

27. Disclosure of Energy conservation Technology Absorption & Foreign ExchangeInflows & Outflows

The Information on conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 are given hereunder.

a) Conservation of Energy

(i) Steps taken or impact on conservation of energy:

The planning and installation of equipment of the Company is done in a manner such thatmaximum energy is conserved. To the extent possible energy efficient equipment andinstruments are used.

(ii) The Steps taken by the Company for Utilising alternate sources of energy

The Company continuously uses its best endeavors for identifying and utilizingalternate sources of energy.

(iii) Capital Investment on energy conservation equipments: Nil

b) Technology absorption

(i) The efforts made towards technology absorption: No efforts have been made duringthe year

(ii) The benefits derived like production improvement cost reduction productdevelopment or import substitution: Nil

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the Financial Year)

(a) The details of technology imported: Nil

(b) The year of import: N.A.

(c) Whether the technology been fully absorbed: N.A.

c) Your Company does not carry out any manufacturing activity the particularsregarding technology absorption and other particulars as required to be stated by theCompanies Act 2013 and rules made thereunder are not applicable.

d) The foreign exchange earnings and outflows (on Standalone basis) are detailedbelow:-

(Figures in Rs. lakhs)
Particulars FY 2017 FY 2016
Test preparation training services 275.84 180.35
Sale of study material 221.65 203.20
Total 497.45 383.55

Expenditure in Foreign Currency (on accrual basis) (on a Standalone basis):

(Figures in Rs. lakhs)
Particulars FY 2017 FY 2016
Travelling and conveyance 6.20 8.27
Bank charges 5.52 1.06
Rent 54.94 28.62
Salary and wages 128.88 25.85
Faculty expenses 80.48 9.52
Others 553.35 294.30
Total 829.37 367.62

28. Transfer of unclaimed dividend to Investor Education and Protection Fund

There is no amount which is required to be transferred to the Investor Education andProtection Fund (IEPF) as per the provisions of Section 125(2) of the Companies Act 2013.

29. Buy Back of Securities

Your Company did not carry out buy back of any securities during the year under review.

30. Initial Public Offer (IPO)

The Company came out with Initial Public offer (IPO) of 4760000 Equity Shares of FaceValue of Rs. 10 Each for cash at a price of Rs. 502 per Equity Share aggregating to Rs.23895.2 Lakhs comprising a fresh issue of 2180119 Equity Shares by the Company and anoffer for sale of 2579881 Equity Shares by the selling shareholders.

Subsequent to the Completion of the IPO the paid up Equity Share capital of theCompany has increased from Rs. 119831590 to Rs. 141632780.

The Company's Equity Share got listed on NSE and BSE on March 31 2017. The objects ofthe Net Proceeds of the Fresh Issue were: a. Funding working capital requirements of ourCompany and our Subsidiaries GKP and Kestone; b. Pre-payment of outstanding amount of adebt facility availed of by our Subsidiary CLIP; c. Acquisitions and other strategicinitiatives; and d. General corporate purposes.

The Company had not received any proceeds of the Offer for sale by the sellingshareholders.

There has been no deviation in the utilization of the IPO proceeds by the Company.

31. Statement of Deviation(s) or Variation(s) in the Projected Utilization of NetProceeds (if any)

The Quarterly and Annual Statement of Deviation(s) or Variation(s) pursuant toRegulation 32(1) & 32(5) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 for the Quarter and Year ended March 31 2017

(Figures in Rs. lakhs)
S. No. Particulars Projected utilization of Net proceeds Actual utilization of Funds during Quarter and Financial Year ended March 31 2017
1. Meeting working capital requirements of CL Educate and its subsidiaries namely Kestone Integrated Marketing Services Private Limited and GK Publications Private Limited 5250 -
2. Repayment of loan taken by Career Launcher Infrastructure Private Limited(A step down subsidiary) from HDFC Bank Limited 1860.41 1860.41
3. Acquisitions and other strategic initiatives 2000 -
4. General corporate purposes 1006.29 -

The aforesaid statement as reviewed by the Audit Committee of the Company isalso available on the website of the Stock Exchange(s) at www.bseindia.com &www.nseindia.com and the Company at www.cleducate.com. The Company expects toutilize bulk of the remaining funds in Financial Year 2017-18. Pending utilization theamounts have been parked into the current account of the Company and would be deployedin Bank FDs till full amounts are utilized.

32. Directors Responsibility Statement

To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013: a) in the preparation of the Annual Accountsfor the year ended March 31 2017 the applicable accounting standards have been followedalong with proper explanation relating to material departures if any; b) the Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the c)state of affairs of the Company as at end of Financial Year ended March 31 2017 and ofthe Profit and Loss of the Company for that period; d) the Directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; e) the Directors have prepared the AnnualFinancial Statements on a 'going concern' basis; f) the Directors have laid down internalfinancial controls to be followed by the Company and that such internal financial controlsare adequate and are operating efficiently; and g) the Directors have devised propersystems to ensure compliance with the provisions of all applicable laws and such systemsare adequate and operating effectively.

33. Acknowledgement

Your Directors take this opportunity to thank the Company's customers shareholdersvendors and bankers for their support and look forward to their continued support in thefuture.

Your Directors also place on record their appreciation for the excellent contributionmade by all employees who are committed to strong work ethics excellence in performanceand commendable teamwork and have thrived in a challenging environment.

For and on behalf of Board of Directors of CL Educate Limited
sd/- sd/-
Gautam Puri Nikhil Mahajan
Vice Chairman & MD Executive Director & Group CEO Enterprise Business
DIN: 00033548 DIN: 00033404
Address: R-90 Greater Kailash-I Address: House No. 457 Sector – 30
New Delhi – 110 048 Faridabad - 121 003 Haryana
Place: New Delhi
Date: July 24 2017

Annexures to Directors' Report 2017

Annexure I: Form AOC – I Features of Financial Statement of Subsidiaries

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014) Statement containing salient features of the financialstatement of subsidiaries/ associate companies/ joint ventures PART "A":Subsidiaries

(Figures in Rs. lakhs)

S. No. Particulars (1) (2) (3) (4) (5) (6) (7)
1 Name of the Subsidiary Kestone Integrated Marketing Services Private Limited Kestone Ltd. Singapore1 Asia Hub Pte G K Publications Private Limited CL Media Private Limited Accendere Knowledge Management Services Private Limited2 Career Launcher Education Infrastructure and Services Limited Career Launcher Infrastructure Private Limited3
2 Financial Period Ended 31.03. 2017 31.03. 2017 31.03. 2017 31.03. 2017 31.03. 2017 31.03. 2017 31.03. 2017
3 Reporting Currency and Exchange Rate INR SGD INR INR INR INR INR INR
4 Share Capital (Nos. of Equity &Preference shares) (In No.) 1000000 14001 14001 190000 10000 12000 9447606 248468
98468 Equity
150000 Preference
5 Reserves &Surplus 2890.01 (3.80) (181.72) 64.69 4032.88 (88.30) 7685.15 1873.43
6 Total Assets 6087.21 1.32 63.03 3374.94 6837.83 214.40 9975.53 4788.44
7 Total Liabilities 6087.21 (3.66) (175.03) 3374.94 6837.83 214.40 9975.53 4788.44
8 Investments 6.66 - - - - 3372.64 -
9 Turnover 9639.31 3.43 164.02 1893.34 3757.58 178.43 109.80 35.25
10 Profit / (Loss) Before Taxation (PBT) 548.30 (0.53) (25.18) 4.36 967.27 (49.97) (39.76) 24.93
11 Provisions for Taxation 213.57 - - 249.86 - - 0.01
12 Profit/ Loss from Discontinued operations - - - - - - 615.59 (221.92)
13 Tax expenes of Discontinued operations - - - - - - 159.66 -
14 Profit for the Year from discontinuing operations - - - - - - 455.93 (221.92)
15 Profit / (Loss) After Taxation (PAT) 353.46 (0.53) (25.18) 5.37 716.65 (50.88) 416.17 (197.00)
16 Dividend Nil Nil Nil Nil Nil Nil Nil
17 % of share holding 100% 100% 100% 100% 51%3 100% 100%

1subsidiary of Kestone Integrated Marketing Services Private Limited

2Accendere Knowledge Management Services Private Limited became a wholly ownedsubsidiary of the Company pursuant to the purchase of balance 49% i.e. 5880 no. of equityshares of

Accendere Knowledge Management Services Private Limited by the Company on April 122017. 3Wholly owned subsidiary of Career Launcher Education Infrastructure& Services Limited

Notes:

1. Names of subsidiaries which are yet to commence operations : None

2. Names of subsidiaries which have been liquidated or sold during the year: None.

Part "B": Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures (Figures in Rs. lakhs)

NAME OF THE ASSOCIATES/JOINT VENTURES NONE
1. Latest audited Balance Sheet Date NA
2. Shares of Associate / Joint Ventures held by the Company on the year end NA
No.
Amount of Investment in Associate/Joint Venture
Extend of Holding %
3. Description of how there is significant influence NA
4. Reason why the associate/joint Venture is not consolidated NA
5. Net worth attributable to Shareholding as per latest audited Balance Sheet NA
6. Profit / Loss for the year NA
i. Considered in Consolidation
ii. Not Considered in Consolidation

Notes:

1. Names of associates or joint ventures which are yet to commence operations: None

2. Names of associates or joint ventures which have been liquidated or sold during theyear: None