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CL Educate Ltd.

BSE: 540403 Sector: Others
NSE: CLEDUCATE ISIN Code: INE201M01011
BSE 00:00 | 16 Nov 116.00 -6.00
(-4.92%)
OPEN

118.00

HIGH

118.00

LOW

116.00

NSE 00:00 | 16 Nov 116.05 -5.70
(-4.68%)
OPEN

122.95

HIGH

122.95

LOW

115.20

OPEN 118.00
PREVIOUS CLOSE 122.00
VOLUME 1399
52-Week high 330.95
52-Week low 106.60
P/E 53.70
Mkt Cap.(Rs cr) 164
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 118.00
CLOSE 122.00
VOLUME 1399
52-Week high 330.95
52-Week low 106.60
P/E 53.70
Mkt Cap.(Rs cr) 164
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 Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statementsof CL Educate Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then ended anda summary of significant accounting policies and other explanatory information(hereinafter referred to as "Ind AS Financial Statements").

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Standalone Ind AS financial statements that give a true and fairview of the (state of affairs) financial position profit or loss (financial performanceincluding other comprehensive income) cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read withrelevant rules issued thereunder. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls and ensuring their operatingeffectiveness and the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Ind ASfinancial statements based on our audit.

We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the Standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the Standalone Ind AS financial statements. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the Standalone Ind AS financial statements whether due to fraudor error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the Standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the StandaloneInd AS financial statements.

We are also responsible to conclude on the appropriateness ofmanagement's use of the going concern basis of accounting and based on the auditevidence obtained whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in the auditor's report to the related disclosures in the Standalone Ind ASfinancial statements or if such disclosures are inadequate to modify the opinion. Ourconclusions are based on the audit evidence obtained up to the date of the auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Standalone Ind AS financialstatements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including the IndAS of the state of affairs of the Company as at March 31 2018 its loss including othercomprehensive income its cash flows and changes in equity for the year ended on thatdate.

Emphasis of Matter

We draw attention to Note 50 of accompanying Standalone Ind ASfinancial statements wherein the Management has explained the reasons for consideringcertain old vocational outstanding receivables as recoverable.

Our opinion is not modified in respect of this matter

Other Matter

The comparative financial information of the Company for the year endedMarch 31 2017 and the transition date opening balance sheet as at April 01 2016 includedin these Standalone Ind AS financial statements are based on the previously issuedstatutory financial statements prepared in accordance with the Companies (AccountingStandards) Rules 2006 which were audited by us on which we expressed an unmodifiedopinion dated May 29 2017 and July 28 2016 respectively. The adjustments to thosefinancial statements for the differences in accounting principles adopted by the Companyon transition to the Ind AS have been audited by us.

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 of the Act we give in "Annexure 1" a statement on thematters specified in paragraphs 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss Cash FlowStatement and the Statement of Changes in Equity dealt with by this Report are inagreement with the books of account; d. In our opinion the aforesaid Standalone Ind ASfinancial statements comply with the Indian Accounting Standards specified under Section133 of the Act read with relevant rules issued thereunder;

e. On the basis of written representations received from the directorsas on March 31 2018 and taken on record by the Board of Directors none of the directorsis disqualified as on March 31 2018 from being appointed as a director in terms ofSection 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls wegive our separate Report in "Annexure 2";

g. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: (i) The Company has disclosed the impact of pending litigationson its financial position in its standalone Ind AS financial statements – Refer Note43 on Contingent Liabilities and Note 43 on Contingent Assets to the standalone Ind ASfinancial statements; (ii) The Company did not have any long-term contracts includingderivative contracts. Hence the question of any material foreseeable losses does notarise; (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

sd/-

Raj Kumar Agarwal

Partner

Membership No.:074715

Place: New Delhi

Date : May 23 2018

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditor's Report of even date to theMembers of CL Educate Limited ("the Company") on the financial statements forthe year ended March 31 2018] (i) (a) The Company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets. (b) Duringthe year the fixed assets of the Company have been physically verified by the managementand as informed no material discrepancies were noticed on such verification. In ouropinion the frequency of verification is reasonable having regard to the size of theCompany and the nature of its assets.

(c) It was informed to us that the title deeds of immovable propertiesrecorded as fixed assets in the books of account of the Company are mortgaged with thebanks/ financial institutions for availing the secured loan. Hence we are unable toverify the original deed of immovable property held in the name of the Company.

(ii) The inventory has been physically verified by the managementduring the year. In our opinion the frequency of verification is reasonable. As informedno material discrepancies were noticed on physical verification carried out during theyear. (iii) The Company has granted unsecured loans to companies and other parties coveredin the register maintained under Section 189 of the Act.

(a) According to the information and explanations given to us and basedon the audit procedures conducted by us we are of the opinion that the terms andconditions of loans granted by the Company to 2 parties covered in the register maintainedunder Section 189 of the Act (total loan amount granted Rs.17141 and balance outstandingas at balance sheet date Rs.53863452) are prejudicial to the Company's interest onaccount of the fact that the Company is not charging any interest on such loan. (b) Theschedule of repayment of principal and payment of interest in respect of such loans hasnot been stipulated thus we are unable to comment whether the repayments or receipts areregular and report amounts overdue for more than ninety days if any as required underparagraph 3(iii)(c) of the Order.

(c) In respect of the aforesaid loans as the schedule of repayment ofprincipal has not been stipulated we are unable to comment whether there is any overdueamount of loan granted to company and other parties listed in the register maintainedunder Section 189 of the Act (iv) (d) According to the information and explanations givento us in respect of loans investments guarantees and securities the Company hascomplied with the provisions of Section 185 and 186 of the Act except for the detailsgiven below:

Nature of non-compliance Name of Company/party Amount Involved Balance as at March 31 2018
Loan given at rate of interest Kestone Asia Hub Pte Ltd. Nil 833500
lower than prescribed Career Launcher Education Foundation 17141 53029952

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits from the public within theprovisions of Sections 73 to 76 of the Act and the rules framed there under. (vi) We havebroadly reviewed the books of account maintained by the Company in respect of productswhere the maintenance of cost records has been specified by the Central Government undersub-section (1) of Section 148 of the Act and the rules framed there under and we are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.

(vii) (a) The Company is generally regular in depositing withappropriate authorities undisputed statutory dues including provident fundemployees' state insurance income tax sales tax service tax value added taxgoods and service tax customs duty excise duty cess and any other material statutorydues applicable to it however there have been slight delays in few cases.: According tothe information and explanations given to us no undisputed dues in respect of providentfund employees' state insurance income tax sales tax service tax value addedtax goods and service tax customs duty excise duty cess and any other materialstatutory dues applicable to it which were outstanding at the year end for a period ofmore than six months from the date they became payable.

(b) According to the information and explanation given to us the duesoutstanding with respect to income tax sales tax service tax value added tax goodsand service tax customs duty excise duty on account of any dispute are as follows:

Name of the statute Nature of dues Amount Rs.(in Lacs) Amount paid under protest Period to which the amount re- lates Forum where dispute is pending
Finance Act 1994 Service tax 166.36 - October 2010 to September 2011 Commissioner of Service Tax New Delhi
Finance Act 1994 Service tax 125.53 - October 2011 to June 2012 Commissioner of Service Tax New Delhi
Finance Act 1994 Cenvat Credit reversal 46.54 - September 2004 to March 2007 Central Excise and Service Tax Appellate Tribunal New Delhi
Finance Act 1994 Cenvat Credit reversal 15.69 - October 2007 to March 2008 Commissioner of Service Tax New Delhi
Finance Act 1994 Cenvat Credit reversal 400.97 - April 2008 to March 2012 Commissioner of Service Tax New Delhi
Income Tax Act 1961 Income Tax 46.18 - AY 2010-11 Commissioner of Income tax (Appeals) New Delhi
Income Tax Act 1961 Income Tax 607.47 - AY 2013-14 Commissioner of Income tax (Appeals) New Delhi
Income Tax Act 1961 Income Tax 718.32 - AY 2011-12 Income tax Appellate Tribunal New Delhi
Income Tax Act 1961 Income Tax 501.44 - AY 2012-13 Income tax Appellate Tribunal New Delhi
Income Tax Act 1961 Income Tax 48.75 - AY 2014-15 Income tax Appellate Tribunal New Delhi

(viii) According to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to financial institution andbank. The Company has neither taken any loans or borrowings from Government nor has itissued any debentures.

(ix) The Company had during the previous financial year made an InitialPublic Offer (IPO). The net proceeds of the IPO were received on 31 March 2017. Thematerial portion of IPO proceeds were primarily utilised in current financial year. In ouropinion and according to the information and explanations given to us the Company hasutilized the money raised by way of IPO and the term loans during the year for thepurposes for which they were raised by way of IPO and the term loan during the year forthe purpose for which they raised (refer note no. 51 of the financial statements fordetails of issue size utilisation and unutilised portion of IPO proceeds). The details ofunutilised portion of the IPO proceeds as on March 31 2018 are detailed here under:

Nature of the fund raised Details of funds pending utilisation Amount (Rs.In Lacs) Remarks
Initial public offer Meeting working capital requirement of Company and its subsidiaries 606.87 The unutilized funds have been temporarily deployed in bank fixed deposits.
Funding acquisition and other strategic initiatives 164.89
General corporate purpose 1010.25
Total 1782.01

(x) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of fraud by the Company or any fraud on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any suchinstance by the management.

(xi) According to the information and explanations given to usmanagerial remuneration has been paid in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Act. (xii) In our opinion andaccording to the information and explanations given to us the Company is not a NidhiCompany. Therefore paragraph 3(xii) of the Order is not applicable to the Company.

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

(xiv) The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Therefore paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him during the year. (xvi) According to the information and explanation given to usthe Company is not required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No.:103523W/W100048

sd/-

Raj Kumar Agarwal

Partner

Membership No.:074715

Place: New Delhi

Date : May 23 2018

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditor's Report of even date to themembers of CL Educate Limited on the standalone Ind AS financial statements for the yearended March 31 2018]

Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of CL Educate Limited ("the Company") as of March 31 2018 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing specified undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both issued by the ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.

Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that: (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Qualified opinion

According to the information and explanations given to us and based onour audit the following material weaknesses have been identified as at March 31 2018: a)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. b) Policy of periodic balance confirmations and reconciliations of receivables /payables were not operating effectively during the year which may result in unwarranteddisputes and over/ understatement of party balances.

A ‘material weakness' is a deficiency or a combination ofdeficiencies in internal financial control over financial reporting such that there is areasonable possibility that a material misstatement of the company's annual or interimfinancial statements will not be prevented or detected on a timely basis.

In our opinion except for the possible effects of the materialweakness described above on the achievement of the objectives of the control criteria theCompany has maintained in all material respects adequate internal financial controlsover financial reporting and such internal financial controls over financial reportingwere operating effectively as of March 31 2018 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the ICAI.

We have considered the material weakness identified and reported abovein determining the nature timing and extent of audit tests applied in our audit of theMarch 31 2018 standalone Ind AS financial statements of the Company and the materialweakness does not affect our opinion on the standalone Ind AS financial statements of theCompany.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No.:103523W/W100048

sd/-Raj Kumar Agarwal

Partner

Membership No.:074715

Place: New Delhi

Date : May 23 2018

Amount in Rupees lacs