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CL Educate Ltd.

BSE: 540403 Sector: Others
NSE: CLEDUCATE ISIN Code: INE201M01029
BSE 00:00 | 17 Aug 148.05 13.45
(9.99%)
OPEN

134.40

HIGH

148.05

LOW

128.10

NSE 16:04 | 17 Aug 147.25 13.35
(9.97%)
OPEN

137.50

HIGH

147.25

LOW

135.20

OPEN 134.40
PREVIOUS CLOSE 134.60
VOLUME 23923
52-Week high 170.30
52-Week low 58.05
P/E 40.79
Mkt Cap.(Rs cr) 420
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 134.40
CLOSE 134.60
VOLUME 23923
52-Week high 170.30
52-Week low 58.05
P/E 40.79
Mkt Cap.(Rs cr) 420
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CL Educate Ltd. (CLEDUCATE) - Director Report

Company director report

Dear Member(s)

The Board of Directors of your Company takes pleasure in presenting the Twenty FifthBoard Report on the business and operations of CL Educate Limited (hereinafter referred toas the "Company" or "CL") together with the Company's AuditedStandalone & Consolidated Financial Statements and the Independent Auditor's Reportthereon for the Financial Year ended March 31 2021.

1. Financial Summary and Highlights

(Rs in Lakhs)

S Particulars Standalone Consolidated
No. FY 2021 FY 2020 FY 2021 FY 2020
I Revenue from operations 9986.49 16334.73 18449.94 30868.33
II Other income 837.50 1234.38 959.67 1529.70
III Total Income (I+II) 10823.99 17569.11 19409.61 32398.03
IV Expenses
a) Cost of material consumed - - 269.17 941.34
b) Purchase of stock in trade 444.33 1095.31 18.82 81.06
c) Changes in inventories of finished goods stock-in trade and work in progress 75.29 (56.76) 30.54 (557.26)
d) Employee benefits expenses 1738.85 2203.60 3963.97 5303.93
e) Franchisee expenses 3383.42 6633.30 3574.51 7142.51
f) Other expenses 4829.33 7186.17 11629.22 18616.91
V Total Operating Expenses 10471.21 17061.62 19486.22 31528.49
EBITDA (III-V) 352.76 507.49 (76.62) 869.54
g) Finance costs 369.94 528.24 563.11 830.96
h) Depreciation and amortization expenses 608.18 1112.72 835.17 1401.50
VI Total Expenses 11449.34 18.702.58 20884.51 33.760.95
VII Profit / (Loss) Before Tax (III - VI) (625.35) (1133.47) (1474.90) (1362.92)
VIII Exceptional Items - 4150.05 - 4150.05
IX Profit / (Loss) Before Tax after Exceptional Items (VII+VIII) (625.35) (5283.52) (1474.90) (5512.97)
X Share of net profit of associates accounted - - (4.94) (14.71)
XI Profit / (Loss) Before Tax from Continuing Operations (IX+X) (625.35) (5283.52) (1479.84) (5527.68)
XII Tax Expenses (112.55) 33.83 (281.57) (102.96)
XIII Profit / (Loss) After Tax from Continuing Operations (512.80) (5317.35) (1198.27) (5424.71)
XIV Profit Before Tax from Discontinuing Operations - - 16.23 118.92
XV Tax Expenses for Discontinuing Operations - - - -
XVI Net Profit / (Loss) for the Period (XIII+XIV-XV) (512.80) (5317.35) (1182.04) (5305.79)
XVII Other Comprehensive Income 3.22 6.50 44.03 42.89
XVIII Total Comprehensive Income for the Period (XVI + XVII) (509.58) (5310.85) (1138.01) (5262.90)
XIX Earnings per Equity Share - Continued Operations
Basic (3.62) (37.54) (8.46) (38.29)
Diluted (3.62) (37.54) (8.46) (38.29)

2. Review of Market Business and Operations

An in-depth analysis of markets in which CL operates along with its businesses is apart of the Management Discussion & Analysis section.

3. Segment Reporting & Operational Overview

Standalone:

Of the total revenue for the year ended March 31 2021 on a standalone basis approx.92.0% came from Revenue from Operations while the remaining 8.0% came from Other Income.

The Company primarily operates in three segments: Digital Partner & Vocational.The segments have been identified based on the nature of products the differing risks andreturns the organizational structure and the internal financial reporting systems. Thisis a distinct change from the previous financial year wherein there were two segments -Consumer Test Prep and Vocational - with the former having been broken down further intotwo aforementioned segments.

The Consumer Services business mainly consists of Test-Prep which includes coachingfor higher-education entrance exams like MBA BBA Law Bank SSC Civil Services GATEetc.; and non-Test-preparation coaching namely for technology-driven Data Scienceprograms (Python Machine Learning and Artificial Intelligence) and Financial Skillsprograms like CFA FRM and NCFM.

Vocational training meanwhile included specific state- and central-government projectsundertaken in the past. The revenue from operations this year was solely earned from theConsumer Test-Prep business. This was primarily due to the conscious decision of theCompany to reduce its exposure to government vocational projects owing to its workingcapital-intensive nature and the slow recovery of receivables from the government. TheCompany at present is taking up no new projects in the Vocational training space.

Given the significant shift that the Company has made towards Digital sales anddelivery in its Consumer Test Prep business it felt that this was the appropriate yearto rework the Segments and break down the business into two new segments - Digital andPartner. The Digital business predominantly contains business sourced and / or servicedonline by company personnel. This includes personnel deployed at Company Owned CompanyOperated (CoCo) Test Prep locations. The Partner business solely contains all businesssourced and serviced by the Company's large Business Partner or Franchisee network acrossIndia and the Middle East.

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

(Rs in Lakhs)

FY 2021 % of Total FY 2020 % of Total
Partner 5432.73 54.4% 10396.55 63.6%
Digital 4553.76 45.6% 5938.18 36.4%
Vocational - 0.0% - 0.0%
Total 9986.49 100.0% 16334.73 100.0%

Our revenue from Partner segment decreased by 47.7%—from Rs 10396.55 in FY 2020to Rs 5432.73 in FY 2021 while the Digital segment decreased by 23.3%-from Rs 5938.18in FY 2020 to Rs 4533.76 in FY 2021; due to what was practically a year-long lockdown onall physical businesses run by the company due to the COVID-19 pandemic.

In terms of business strategy the Company increased its focus on pouch andsachet-sized products this year predominantly selling

them online; which has enabled the organization to retain and increase market share incritical markets despite the Lockdown.

The second segment classification done by the company is by geography which isoutlined below. Despite the global nature of the pandemic our overseas business basedpredominantly out of the UAE had a better year in comparison to the domestic businessand grew its overall share of our business from 5.0% to 5.8%.

(Rs in Lakhs)

FY 2021 % of Total FY 2020 % of Total
Within India 9406.64 94.2% 15515.82 95.0%
Overseas 579.85 5.8% 818.91 5.0%
Total 9989.49 100.0% 16334.73 100.0%

Consolidated:

Of the total revenues for the year ended March 31 2021 on a consolidated basisapprox. 95.1% came from Operations while 4.9% came from Other Income.

The group has identified the following reportable business segments as primarysegments:

1. Consumer Business

a. Partner - Includes coaching for higher education entrance exams like MBALaw BBA RBI Grade-B GRE GMAT (under the brand ‘Career Launcher') and GATEcoaching (under the brand ‘ICE GATE Institute Pvt. Ltd.') through our BusinessPartner (Franchisee) network.

b. Digital - Includes coaching for higher education entrance exams like MBALaw BBA RBI Grade-B GRE GMAT (under the brand ‘Career Launcher') and GATEcoaching (under the brand ‘ICE GATE Institute Pvt. Ltd.') through the digital /online mode and offline counselling-cum-service centres owned and operated by the company.

c. Consumer Publishing - Includes publishing & sale of educational books torelated and third parties under the brand ‘GK Publications'.

2. Enterprise Business

a. Enterprise Corporate - The Company provides the following services to corporateclients under the brand ‘Kestone'

i. Experiential Marketing and Event Management

ii. Digital & MarComm Services

iii. Customized Engagement Programs (CEPs)

iv. Manpower Management & Training

v. Strategic Business Solutions

b. Enterprise Institutional - The Company provides the following services toinstitutional clients under the brand ‘CL Media Pvt. Ltd' and ‘AccendereKnowledge Management Services Pvt. Ltd'

i. Integrated Solutions to Universities

ii. Student Enrollment Services

iii. Research & Incubation Services

iv. Career Development Center

3. Others

Other business segments include Vocational Training and our discontinued K-12Operations.

FY 2021 % of Total FY 2020 % of Total
Partner 5432.73 29.5% 10396.55 33.6%
Digital 5009.07 27.1% 7062.03 22.9%
Consumer Publishing (399.66) -2.2% (156.28) -0.5%
Enterprise Corporate 7562.10 41.0% 11535.06 37.4%
Enterprise Institutional 845.70 4.6% 2001.78 6.5%
Others - 29.19 0.1%
Total 18449.94 100.0% 30868.33 100.0%

Our Revenue from Operations on a consolidated basis decreased by 40.2%—from Rs30868.33 lakh in FY 2020 to Rs 18449.94 lakh in FY 2021; due to the impact of COVID-19.The management has estimated the following loss of business due to the global pandemic:

(i) Partner: The Partner business saw a decline of 47.7% — from Rs10396.55 lakh in FY 2020 to Rs 5432.73 lakh in FY 2021. The Company has recorded nearly53% decline—from 44099 paid enrollments in FY 2020 to 20696 paid enrollments in FY2021. The decline was prevalent across product categories due to physical study centersbeing shut for most of the year.

(ii) Digital: The Digital business saw a decline of 29.1%—from Rs 7062.03lakh in FY 2020 to Rs 5009.07 lakh in FY 2021. Our non-partner business for FYRs 20includes physical centers which were Company Owned and Company Operated that were fullyfunctional for at least 11 months of the year therefore on a comparative basis therevenues predictably witnessed the aforementioned decline. However in terms of paidenrolments in FY21 the numbers were 85132 against 71692 in FY20 which is about 19%higher. Given the shift in consumer behavior on account of the pandemic the organizationdid a fantastic job of increasing market share despite the shift away from physicalclasses in key markets.

(iii) Consumer Publishing: The revenues from the consumer publishing businesswere also heavily impacted by the pandemic primarily due to the inability to transportbooks. Further for most of the year distributors retailers and wholesalers — whichcontribute the lion share of the business were all closed due to the lockdown.

(iv) Enterprise Corporate: The revenue from Enterprise Corporate (operatingunder the Kestone brand) witnessed a decline of 34.4%—from Rs 11535.06 lakh in FY2020 to Rs 7562.10 lakh in FY 2021. The impact of COVID-19 was felt massively in thisbusiness segment resulting in the better part of a Rs 50-60 Cr physical events businessbeing wiped out overnight by the pandemic. Due to the lockdown and social distancing normsin India and abroad this line of business was completely impossible in FY 2021. TheCompany was quick to respond to the new challenges posed by COVID; and has successfullyshifted its mode of business to online servicing by introducing a Virtual Events Platform(VEP) whose production and implementation was accelerated considerably on account of thepandemic. The platform which was developed inhouse has been globally recognized amongstthe best in the world and was used for more than 200 events in FY 2021.

(v) Enterprise Institutional: The revenue from this segment also witnesseddecline of 57.8%—from Rs 2001.78 lakh in FY 2020 to Rs 845.70 lakh in FY 2021 - dueto the pandemic. With universities and colleges operating remotely and their cash inflowsreduced drastically due to the prevalent UGC norms most institutions were significantlycash strapped and didn't spend the usual amount on either customer acquisition or onresearch.

(Rs in Lakhs)

FY 2021 % of Total FY 2020 % of Total
Within India 17168.84 93.1% 28480.59 92.3%
Overseas 1281.10 6.9% 2387.74 7.7%
Total 18449.94 100.0% 30868.33 100.0%

4. Change in the nature of business if any

There was no change in the nature of business of the Company during the year underreview.

5. Scheme of Amalgamation

Pursuant to the recommendation of the Audit Committee and approval of the Board ofDirectors of the Company both dated November 27 2018 an application under Regulation 37of the SEBI (LODR) Regulations 2015 was filed with the National Stock Exchange of IndiaLimited ("NSE") and BSE Limited ("BSE") for the proposed Amalgamationof 5 wholly owned subsidiary Companies of CL Educate Limited (CL Educate)- Career LauncherEducation Infrastructure and Services Limited (CLEIS) CL Media Private Limited (CLM)Accendere Knowledge Management Services Private Limited (AKMS) G.K. Publications PrivateLimited (GKP) and Kestone Integrated Marketing Services Private Limited (Kestone) with CLEducate Limited (CL Educate). The scheme has been approved by the NSE & BSE.

The First Motion Petition with respect to the proposed Amalgamation was filed by theCompany with the Hon'ble NCLT Chandigarh on August 28 2019. NCLT Chandigarh heard theFirst Motion Application filed by the Company on November 14 2019 and issued its 1stMotion Order dated December 11 2019.

As per the directions given by the NCLT Chandigarh in its 1st Motion Order themeetings of Equity Shareholders of CL Educate and of the Unsecured Creditors with value ofINR 1 lakh or more of Kestone were held on February 01 2020 at 10:00 AM and 12:00 Noonrespectively.

The proposed scheme of Amalgamation was duly approved by the Shareholders of CL Educateand Unsecured Creditors of Kestone.

The 2nd Motion Petition with respect to the proposed Amalgamation was filed by theCompany with the Hon'ble NCLT Chandigarh on February 14 2020 which was heard by the NCLTon March 05 2020. While NCLT was satisfied with the Petition it directed the CompaniesCL Educate Limited and Kestone to file respective affidavits that no objections had beenreceived from any stakeholder against the Scheme. These Affidavits were filed by therespective Companies on March 17 2020.

However on account of the nationwide lockdown and limited functioning of the NCLTBench the hearing of the 2nd Motion Petition of CL Educate Limited has been adjourned bythe NCLT Chandigarh Bench each time it was scheduled.

On August 12 2020 the Company filed an application for early hearing of its 2ndMotion Petition with the Hon'ble NCLT Chandigarh Bench. The NCLT Bench heard thisapplication on October 27 2020 and passed an Order which was pronounced on November 252020 in which the Companies were directed to issue notices to the regulatory authoritiesand publish the same in two newspapers. Further the Scheme was listed for hearing onJanuary 28 2021. As per the directions contained in the Order the notices were issuedand advertisements were published by the Companies and Affidavits to this extent werefiled with the NCLT Bench.

The 2nd Motion Petition filed by the Company was heard by the NCLT Bench on July 302021. It has vide its order dated July 30 2021 directed the Petitioner Companies toissue fresh notices to the Regional Director and Registrar of Companies. The next date ofhearing has been fixed as October 29 2021.

6. Details of Subsidiaries/Joint Ventures/Associate Companies as on the date of thisReport

As on date CL Educate Limited has 12 (Twelve) subsidiaries (including 4 (four)indirect subsidiaries) and 1 (one) associate company to carry on its business activitiesof imparting education and training programmes publishing digital marketing providingresearch related services to Institutions and Universities etc. A brief profile of oursubsidiaries and associate companies is given hereunder:

i. Kestone Integrated Marketing Services Private Limited (Kestone):

Kestone was acquired as a wholly owned subsidiary of the Company on April 01 2008.Under our brand Kestone we enjoy strong relationships with corporates to whom we provideour integrated business marketing and sales services. Kestone focuses on a wide varietyof corporates across various segments and industries.

Kestone provides services including event management marketing support (includingdigital marketing support in the form of online marketing initiatives) customerengagement (including audience generation lead generation loyalty and reward programsand contest management) managed manpower and training services.

The total income of Kestone was Rs 7628.66 lakh in FY 2021 as against Rs 10915.74lakh in FY 2020 recording a decrease by 30.1% over the previous Financial Year. Thedecrease is mainly attributed to the spread of global pandemic during the last year of theFY 2021. The management estimates- Rs 40-50 crore of loss of business due to COVID-19.

a.1. Kestone CL Asia Hub Pte. Ltd. Singapore (Kestone CL Asia)

Kestone CL Asia Hub Pte. Ltd. (Previously Known as ‘Kestone Asia Hub Pte. Ltd')Singapore is a Step-Down Subsidiary of the Company. Kestone CL Asia started doing businessin Singapore from Financial Year 2016-17. It is currently engaged in providing integratedmarketing solutions for products and services to conduct educational & consultingprograms research related services etc. for and on behalf of inland and overseascustomers. Kestone CL Asia has also started a branch office in Dubai inter alia toprovide integrated sales & marketing service to corporate & institutions in theMiddle East.

The total income of Kestone CL Asia Hub Pte. Ltd. decreased by 9.9 % to Rs 1252.00lakh in FY 2021 from Rs 1385.93 lakh in FY 2020 due to COVID.

a.2. Kestone CL US Limited Delaware USA (Kestone CL US):

Kestone CL Asia has incorporated a wholly owned subsidiary in USA on March 22 2018 bythe name of Kestone CL US Limited with an objective to provide integrated sales &marketing services to corporate & institutions in the Americas especially USA. Duringthe year Kestone CL US had a total income of US$ 402900 .

a.3. CL Educate (Africa) Limited Mauritius:

Kestone CL Asia has incorporated a 90% subsidiary in Mauritius on January 13 2020 bythe name of CL Educate (Africa) Limited with an objective to take its product and servicesofferings to the African market. Due to COVID-19 pandemic the business operations of thisventure are still at a very nascent stage.

ii. CL Media Private Limited (CL Media)

CL Media was incorporated as a wholly owned subsidiary of CL on February 01 2008. CLMedia provides integrated solutions to educational institutions and universities includingbusiness advisory and outreach support services.

The total income from CL Media was Rs 1374.42 lakh in FY 2021 as compared to Rs3828.42 lakh in FY 2020. The significant decrease in the business of CL Media is on twoaccounts firstly due to the decision to cease the publishing business that used to run inthis entity and move those operations to another wholly owned subsidiary of CL Educate -CLIP. This happened with effect from 1st April 2021 and hence there is no material impactof this shift at a Consolidated level for the company. Secondly due to the COVID-19pandemic a large number of CL Media's clients had to deal with changing examinationcycles / academic calendars lower fees collection due to non-campus based education anda decline in student admission. This has had a cascading effect on CL Media's businessoperations resulting in a dip in revenues.

CL Media has responded to the challenge by reworking its services offerings andadapting to the digital world by changing its digital inventory to continue to remaincompetitive in these times.

iii. G.K. Publications Private Limited (GKP)

GKP was acquired as a subsidiary of the Company on November 12 2011 and is now awholly owned subsidiary. GKP is currently engaged in the business of distribution of testpreparation guides books and other academic material.

The total income of GK Publications decreased by 89.5%—to Rs 40.35 lakh in FY 2021from Rs 385.91 lakh in FY 2020. A more accurate depiction of business performance thoughcan be ascertained by comparing the gross sales in the two aforementioned years whichstood at Rs 1154.31 Lakh (FY 2021) as against Rs 2026.38 Lakhs (FY 2020) .

The nationwide lockdown imposed by the COVID-19 pandemic has meant that theorganization has been forced to take an enormous amount of sales return during the yearwhich have brought down the net revenue figures dramatically. The sales returns hasresulted in a lot of reusable inventory of books coming back to the company which theorganization will refurbish and sell in the coming months. The publishing industry hadalso been reeling the previous year due to several policy changes done by the Governmentwith respect to online distributors and the pandemic only accentuated the situation. Tocombat the abovementioned environmental factors the organization has made significantchanges to its distribution network title list and payment processes and believes thatthese will start giving returns in the coming years.

iv. Accendere Knowledge Management Services Private Limited (AKMS)

AKMS was incorporated on September 19 2008 and became a wholly owned subsidiary of theCompany on April 12 2017. AKMS is engaged in the business of improving the research andinnovation output of educational institutions and establishing their institutionalcredibility international presence and thought leadership. However as the COVID-19pandemic severely curtailed access to students and funds for institutions the totalincome of Accendere decreased by 49.6% to Rs 145.74 lakh in FY 2021 from Rs 289.25 lakh inFY 2020.

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

Incorporated on June 16 2005 CLEIS is a wholly owned subsidiary of the Company as ondate. Engaged in the business of providing various infrastructure facilities soft skillseducational and consulting programs the business of CLEIS has since been transferreddetails of which are given below:

Pursuant to a Business Transfer Agreement dated March 16 2017 amended on July 182017 executed amongst CLEIS and B&S Strategy Services Private Limited with CL as aconfirming party the business of running and operating pre-schools and providing schoolmanagement services carried on by CLEIS has since been sold.

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

CLIP a wholly owned subsidiary of CLEIS and hence a stepdown subsidiary of CL wasincorporated on February 20 2008. CLIP's lines of business include providinginfrastructure facilities for K-12 schools printing and publishing of education contentin the form of books tests analyses etc. and printing competitive books and TestPreparation material.

The total income of CLIP increased to Rs. 1040.11 Lakhs in FY 2021 from Rs 6559.00Lakhs in FY 2020. This was mainly due to publishing business which was shifted at thebeginning of the year from CL Media Pvt Ltd. to CLIP.

vi. ICE GATE Educational Institute Private Limited (ICE GATE)

ICE GATE was incorporated under the Companies Act 2013 on August 12 2015. ICE GATE isengaged in the business of providing education for students preparing for GraduateAptitude Test in Engineering (GATE) and related exams. Pursuant to the Share Purchase cumShareholders Agreement entered into amongst CL ICE GATE and its Promoters dated October18 2017 CL acquired a 50.70% stake (5070 equity shares) in ICE GATE. ICE GATE became asubsidiary of the Company with effect from October 31 2017. As on March 31 2021 CLEducate Limited had increased its shareholding to 58.95% in ICE GATE.

The total income of ICE GATE decreased by 65.2% to Rs 466.68 lakh in FY 2021 from Rs1339.26 lakh in FY 2020.

vii. Career Launcher Foundation (CLF) Section 8 Company

CLF was incorporated on November 06 2020 under Section 8 of the Companies Act 2013as a wholly owned subsidiary of CL to undertake CSR related activities permissible underthe Companies Act 2013. CLF acts as an implementing agency of the Company and its groupcompanies to implement their CSR projects / programmes / activities. CLF can also act asthe implementing agency for companies other than CL group companies in the future.

The CSR funds that were made available to CLF to spend in FY 2021 were Rs 57.58 Lakhs.

viii. Career Launcher Private Limited (CLPL)

CLPL was incorporated on March 15 2021 under the Companies Act 2013 as a wholly ownedsubsidiary of CL with the objective of becoming the digital arm of the Career Launcherbrand. Subject to the approval of the shareholders by way of a Special Resolution it isproposed to transfer the existing Digital Business of CL Educate Limited to CLPL to giveit an opportunity to chart its own journey towards becoming a premier brand in the EdTechspace.

ix. Threesixtyone Degree Minds Consulting Private Limited (361DM) Associate Company

361DM incorporated under the Companies Act 1956 on July 06 2006 delivers largescale yet effective learning and education solutions to individuals organizations andeducational institutions. Pursuant to the Investment cum Shareholders Agreement datedAugust 03 2017 entered into amongst the Company 361DM and its Promoters the Companyholds 500000 5% Compulsorily Convertible Preference Shares of 361DM of INR 10 eachissued at a premium of INR 90/- per share. The Company also holds 909 Equity shares of361DM aggregating to 4.41% of paid-up equity share capital of 361DM.

The total Income of 361DM decreased by 8.7% to Rs 581.06 lakh in FY 2021 from Rs 636.34lakh in FY 2020.

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

There was no change in the status of subsidiaries/associate companies/joint venturesduring the Financial Year 2020-21 except as mentioned below:

S. No. Name of the Company Date of becoming subsidiaries/Associate Subsidiaries/Associate
1. Career Launcher Foundation (Section 8 Company) November 06 2020 Subsidiary
2. Career Launcher Private Limited March 15 2021 Subsidiary

Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts)Rules 2014 a statement containing salient features of the Financial Statements of theCompany's Subsidiaries and Associate companies in Form AOC-1 is attached to thisreport as Annexure I.

Pursuant to the provisions of Section 136 of the Act the Audited Standalone &Consolidated Financial Statements of the Company along with the Audited FinancialStatements of its Subsidiaries are available on the website of the Company at the web linkwww.cleducate.com/financial.html.

Shareholding in Subsidiary Companies

As on March 31 2021 the Company's shareholding in its direct subsidiaries was asfollows:

a. 1000000 Equity Shares of Face Value of Rs 10/- each comprising of 100% EquityShare Capital in Kestone Integrated Marketing Services Private Limited;

b. 190000 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity ShareCapital in G. K. Publications Private Limited;

c. 10000 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity ShareCapital in CL Media Private Limited;

d. 12000 Equity shares of Face Value of Rs 10/- each comprising of 100% Equity ShareCapital in Accendere Knowledge Management Services Private Limited;

e. 9447606 Equity Shares of Face Value of Rs 10/- each comprising of 100% EquityShare Capital in Career Launcher Education Infrastructure and Services Limited;

f. 5895 Equity Shares of Face Value of Rs 10/- each comprising of 58.95% Equity ShareCapital in ICE GATE Educational Institute Private Limited;

g. 5000 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity ShareCapital in Career Launcher Foundation (Section 8 Company); and

h. 100001 Equity Shares of Face Value of Rs 10/- each comprising of 100%Equity Share Capital in Career Launcher Private Limited.

As on date of this report the Company's shareholding in the Equity Share Capital ofCareer Launcher Private Limited is comprising of 100000 Equity Shares of Face Value ofRs 1/- each constituting 100% of Equity Share Capital.

Shareholding in Associate Companies

As on March 31 2021 the Company's holding in its Associate Companies was as follows:

a. 500000 5% Convertible Preference Shares of Face Value of Rs 10 each comprising of78.62% of Preference Share Capital in Threesixtyone Degree Minds Consulting PrivateLimited; and

b. 909 Equity shares of Face Value of Rs 10 each comprising of 4.41% of Equity ShareCapital in Threesixtyone Degree Minds Consulting Private Limited.

7. Corporate Governance

Pursuant to the applicable provisions of the SEBI (LODR) Regulations 2015 a detailedreport on Corporate Governance forms part of this Annual Report. A certificate from M/s.S. Anantha & Ved LLP Company Secretaries (LLP IN: AAH-8229) confirming compliancewith the conditions of Corporate Governance for the Financial Year 2020-21 as stipulatedunder the Listing Regulations forms part of this Report.

8. Management Discussion & Analysis

Management Discussion and Analysis (MDA) Report for the Financial Year 2020-21 on theoperations and state of affairs of your Company as stipulated under Regulation 34 of SEBI(LODR) Regulations 2015 is given in a separate section forming part of this AnnualReport.

9. Dividend

Owing to the losses incurred during the year the Board of Directors does not recommendany Dividend for the Financial Year 2020-21.

The Dividend policy of the Company (voluntarily adopted by the Board of Directors) isavailable on the website of the Company at the web linkwww.cleducate.com/policies/Dividend-Policy.pdf.

10. 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 as per the provisions of Section 125(2) of the Act.

11. Transfer to Reserves

In view of the losses incurred by the Company during the Financial Year 2020-21 noamount has been transferred to reserves during this Year.

12. Capital and Finance

The paid up Equity Share Capital of the Company as on March 31 2021 was INR 1416.57Lakhs. During the year under review the Company has not issued any shares. The Companyhas not issued shares with differential voting rights. It has neither issued employeestock options nor sweat equity shares and does not have any scheme to fund its employeesto purchase shares of the Company.

During the Financial year the company took advantage of the Guaranteed Emergency CreditLine (GECL) offered by the government on account of COVID-19. The GECL facility is of thetune of Rs 5 crore has a payback period of 4 years with no payments required to be madeduring the first year. The facility also had a lower interest rate than the company'sexisting loan facilities. Meanwhile the company continued to reduce the limits of theoverdraft facility taken by it through HDFC Bank as per the conditions of the Dropline OD.

13. Material changes and commitments

1. At its meeting held on June 24 2021 the Audit Committee as well as the Board ofDirectors of the Company have subject to the approval of shareholders of the Companyapproved the Transfer/Sale of the Digital Business of CL Educate Limited to its WhollyOwned Subsidiary Company- Career Launcher Private Limited as a going concern through aslump sale for a lump sum consideration based on the Book Value of the Digital BusinessUndertaking rounded off to the nearest higher crore (book value to be determined by anindependent valuer) and the consideration to be fully discharged by way of a mix of issueof debt and/or equity.

2. At its meeting held on August 03 2021 The Board of Directors has subject to theapproval of shareholders of the Company approved the sub-division (split) of the equityshares of the Company from Face Value of Rs.10/- per share to Rs.5/- per share andconsequent alteration of the Memorandum of Association of the Company.

Both the matters have been included in the Notice calling the 25th Annual GeneralMeeting of the Company for the approval of the Shareholders of the Company.

14. Material and Significant Orders Passed by Regulators & Courts

There are no significant material orders passed by any Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.

15. Internal Financial Control Systems

The Company has aligned its current system of Internal Financial Controls with therequirements of the Companies Act 2013. The Internal Control Systems are intended toincrease transparency and accountability in an organisation's process of designing andimplementing a system of internal control. The framework requires a company to identifyand analyse risks and manage appropriate responses. The Company has successfully laid downthe framework and ensured its effectiveness. The Company's internal controls arecommensurate with its size and the nature of its operations. These have been designed toprovide reasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable statutes safeguarding assets fromunauthorised use executing transactions with proper authorisation and ensuring complianceof corporate policies. CL has a well-defined delegation of power with authority limits forapproving revenues as well as expenditures. Processes for formulating and reviewing annualand long-term business plans have been laid down. CL uses a state-of-the-art enterpriseresource planning (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.

Your management assessed the effectiveness of the Company's internal controls overfinancial reporting as of March 31 2021. The assessment involved management reviewinternal audit and statutory audit.

The Internal Controls over Financial Reporting are routinely tested and reported byStatutory as well as Internal Auditors in a process that involves a review of theinternal controls and risks in its operations and processes such as IT and generalcontrols accounting and finance procurement employee engagement etc.

During the year under review the internal audit was conducted based on the risk-basedinternal audit plan approved by the Audit Committee. Significant audit observations andfollow up actions thereon were reported to the Audit Committee.

Pursuant to Section 143 of the Act the Statutory Auditor has issued an attestationreport on our Internal Financial Controls over financial reporting.

16. Public Deposits

Your Company has not invited or accepted any deposits from the public/members and thereare no outstanding deposits as on March 31 2021.

17. Auditors and Auditors' Report

Statutory Auditors

Pursuant to the recommendation of the Audit Committee dated May 12 2020 the Board ofDirectors and Members of the Company at their respective meetings held on May 12 2020and September 30 2020 had approved the appointment of WaLker Chandiok & Co LLPChartered Accountants (Firm Registration No.: 001076N/N500013) as the Statutory Auditorsof the Company for a term of five (5) consecutive years ("First Term")commencing from the Financial Year 2020-2021. Hence Walker Chandiok & Co LLPChartered Accountants shall hold office tiLL the conclusion of the 29th Annual GeneralMeeting of the Company to be held during the Financial Year 2025-26.

Fees paid/payable to Statutory Auditors

The Total Fee (Excluding other expenses and taxes if any) for all services paid/payable by the Company and its subsidiaries on a consolidated basis to the StatutoryAuditor (WaLker Chandiok & Co LLP Chartered Accountants) and all entities in thenetwork firm/network entity of which the Statutory Auditor is a part for the FinancialYear 2020-21 is mentioned below:

(Rs in Lakhs)

S. No. Particulars CL Educate Kestone GKP CL Media CLEIS CLIP AKMS Total
Haribhakti & Co Walker Chandiok & Co. LLP
a. Statutory Audit Fees - 35.00 2.00 1.50 1.50 1.50 3.00 1.50 46.00
b. Audit of Consolidated Financials 3.00 3.00
c. Limited Review Fees 6.00 8.00 - - - - - - 14.00
d. Other assignments Fees (please specify)
Total 6.00 46.00 2.00 1.50 1.50 1.50 3.00 1.50 63.00

Statutory Auditor's Report

The Statutory Auditor's Report/CARO Report does not contain any qualificationreservation adverse remark or disclaimer except as mentioned below:

i. The Company has granted interest bearing unsecured loans to Companies and aninterest free loan given to a party covered in the register maintained under Section 189of the Act; and with respect to the same:

(a) In our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the company's interest except wherein Company has granted interestfree unsecured loan to one party amounting to Nil (year-end balance 462.77 lacs) inrespect of which adequate explanation has not been provided to us of any benefit accruingto the Company for giving such a loan therefore we are unable to comment as to whetherthe terms and conditions of grant of such loans are prima facie prejudicial to theinterest of the Company.

(b) In respect of interest bearing loans given to companies the schedule of repaymentof principal has been stipulated wherein the principal amounts are repayable on demand andsince the repayment of such loans has not been demanded in our opinion repayment of theprincipal amount is regular while in case of interest free loan given to the party theschedule of repayment of the principal has not been stipulated and hence we are unable tocomment as to whether repayments/receipts of the principal amount and the interest areregular;

(c) There is no overdue amount in respect of loans granted to such companies while forinterest free loan given to the party in the absence of stipulated schedule of repaymentof principal and payment of interest we are unable to comment as to whether there is anyamount which is overdue for more than 90 days and whether reasonable steps have been takenby the Company for recovery of the principal amount and interest.

ii. In our opinion the Company has complied with the provisions of Sections 185 of theAct. In our opinion the Company has not complied with the provisions of Section 186 ofthe Act. The details of the non-compliances are given below:

Particulars Name of Party Amount involved (Rs in lacs) Balance as on March 31 2021 (Rs in lacs) Remarks
Loan given at a rate lower than prescribed Career Launcher Education Foundation 462.77 462.77 Interest free loan given to Company

Director's Response: - Rs. 462.77 lakhs loan is outstanding as at 31st March 2021and to ensure that the interests of the Company are protected the outstanding loan amounthas been guaranteed by our Promoter entity Bilakes Consulting Private Limited. Thereforeit is not prejudicial to interest of The Company.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 24A ofthe SEBI (LODR) Regulations 2015 based on the recommendation of the Audit Committeeyour Directors have appointed M/s. S. Anantha & Ved LLP Company Secretaries Mumbai(LLP IN: AAH- 8229) as the Secretarial Auditor of the Company for the Financial Year2021-22.The Secretarial Audit Report for the Financial Year 2020-21 issued by theSecretarial Auditor does not contain any qualification reservation observation oradverse remark.

The Secretarial Audit Report for the FY 2020-21 is annexed as Annexure II (A).

Secretarial Audit of Material Unlisted Subsidiaries:

The Secretarial Audit of the Company's material unlisted subsidiaries i.e. KestoneIntegrated Marketing Services Private Limited (Kestone) Career Launcher EducationInfrastructure and Services Limited (CLEIS) and CL Media Private Limited (CL Media) forthe financial year ended March 31 2021 has been carried out by M/s. Jain D & Co.Company Secretaries (C.P No.: 11434). The Secretarial Audit Reports of the respectiveCompanies for the FY 2020-21 do not contain any qualification reservation observation oradverse remark and are annexed as Annexure II (B).

Internal Auditor

Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts)Rules 2014 and based on the recommendation of the Audit Committee your Directors haveappointed M/s. Value Square Advisors Private Limited Business Advisors and CharteredAccountants as the Internal Auditor of the Company for the Financial Year 2021-22.

Cost Auditor

Pursuant to the provisions of Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 and the Notification dated December 31 2014 issued by theMinistry of Corporate Affairs your Company is required to get its cost records audited bya Cost Auditor.

Based on the recommendation of the Audit Committee your Directors have appointed M/s.Sunny Chhabra & Co. Cost Accountants as the Cost Auditor of the Company for theFinancial Year 2021-22. The Cost Audit Report 2020-21 issued by the Cost Auditor does notcontain any qualification observation or adverse remark. The same shall be placed beforethe members at the ensuing AGM.

The remuneration payable to the cost auditor is subject to ratification/approval by themembers of the Company. Accordingly a resolution seeking members' ratification/ approvalfor the remuneration payable to the Cost auditor is included in the Notice convening the25th Annual General Meeting along with the relevant details including the proposedremuneration.

Reporting of fraud by Auditors

During the year under review no instance of fraud has been reported by the StatutoryAuditor Cost Auditor or the Secretarial Auditor.

18. Directors and Key Managerial Personnel

a. Appointments & Cessations during the Financial Year 2020-21:

Mr. Piyush Sharma (DIN: 08759840)- appointed as a Non-Executive Independent Director onthe Board of the Company on and with effect from July 17 2020.

Mr. Viraj Tyagi (DIN: 01760948)- resigned as an Independent Director with effect fromNovember 02 2020.

b. Appointments & Cessations after the end of Financial Year i.e. March 31 2021till the date of this Report:

Ms. Madhumita Ganguli's current term as a Non- Executive Independent Director on theBoard of the Company will lapse on July 01 2022. The Nomination Remuneration andCompensation Committee and Board has recommended the reappointment of Ms. MadhumitaGanguli as a Non-Executive Independent Director of the Company for a second term of five(5) consecutive years commencing from July 02 2022 up to July 01 2027 subject to theapproval of the shareholders of the Company by way of a Special Resolution.

Resolution seeking Members approval to the reappointment of Ms. Madhumita Ganguli hasbeen incorporated in the notice of 25th Annual General Meeting of the Company.

c. Retirement by Rotation:

Mr. Imran Jafar (DIN: 03485628) Non-Executive Non Independent Director retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. Resolution seeking Members' approval to the re-appointment of Mr. ImranJafar has been incorporated in the notice convening the 25th Annual General Meeting of theCompany.

d. Proposed appointments at the ensuing AGM:

• Mr. Imran Jafar (DIN: 03485628) Non-Executive Non Independent Director retiresby rotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.

• Reappointment of Ms. Madhumita Ganguli (DIN: 00676830) as a Non-ExecutiveIndependent Director of the Company for a second term of five (5) consecutive yearscommencing from July 02 2022 up to July 01 2027.

e. Declaration by Independent Directors

Pursuant to sub-section (7) of Section 149 of the Act the Company has receiveddeclarations from all the Independent Directors on Board that they meet the criteria ofindependence laid down in Section 149(6) of the Act and Regulation 16(1) (b) of SEBI(LODR) Regulations 2015 and that there was no change in their status as IndependentDirectors during the Financial Year 2020-21.

A brief profile of each Independent Director on Board of the Company along with theterms and conditions of appointment of Independent Directors are available on the websiteof the Company at the web link www.cleducate.com/advisory-board.html andwww.cleducate.com/policies/Draft-Appointment-Letter.pdf.

f. Separate Meeting of Independent Directors

Pursuant to the requirements of Schedule IV of the Act during the Financial Year2020-21 the Independent Directors of the Company met separately on July 01 2020 tointer-alia;

a. Review the performance of Non-Independent Directors and the Board as a whole;

b. Review the performance of the Chairperson of the Company; and

c. Assess the quality quantity and timeliness of flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

g. Disclosure of Interest in other concerns:

The Company has received the Annual disclosure(s) from all the Directors disclosingtheir Directorship/Interest in other concerns in the prescribed format for the FinancialYears 2020-21 and 2021-22.

The Company has received confirmation from all the Directors that as on March 31 2021none of the Directors were disqualified to act as Directors by virtue of the provisions ofSection 164(2) of the Act or were debarred from holding the office of Director by virtueof any order of SEBI or any other such authority.

h. Details of Board & Committee Meetings held during the Financial Year 2020-21

The Board of Directors of the Company met 5 (Five) times during the Financial Yearunder review. The details of the meetings of the Board including those of its Committeesand of the Independent Directors are given in the Report on the Corporate Governanceforming part of this Annual Report.

i. Annual Evaluation by the Board

The Nomination Remuneration and Compensation Committee (NRC Committee) and the Boardhas adopted a methodology for carrying out the performance evaluation of the BoardCommittees Independent Directors and Non- Independent Directors of the Company whichincludes criteria manner and process for performance evaluation. Criteria in this respectincludes; the Board composition and structure effectiveness of board processesinformation and functioning contribution of the individual director to the Board andCommittee Meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc.

Evaluation of Performance of the Board its Committees every Director and Chairpersonfor the financial year 2020-21 has been done as per the adopted methodology which includesreview discussion and feedback from directors.

j. Key Managerial Personnel

As on March 31 2021 the following persons were the designated Key ManagerialPersonnel of the Company pursuant to Section 2(51) and Section 203 of the Act read withthe rules made thereunder:

i) Mr. Satya Narayanan R Chairman & Executive Director

ii) Mr. Gautam Puri Vice Chairman & Managing Director

iii) Mr. Nikhil Mahajan Executive Director and Group CEO Enterprise Business

iv) Ms. Rachna Sharma Company Secretary and Compliance Officer and

v) Mr. Arjun Wadhwa Chief Financial Officer.

19. Composition of the Audit Committee

Audit Committee of the Board is duly constituted in accordance with the provisions ofSection 177 (8) of the Act read with Rule 6 of the Companies (Meetings of the Board andits Powers) Rules 2014 and Regulation 18 of the SEBI (LODR) Regulations 2015. Thedetails of its composition powers functions meetings held during the Financial Year2020-21 etc. are given in the Report on Corporate Governance forming part of this AnnualReport. All recommendations of the Audit Committee were accepted by the Board during theFinancial Year 2020-21.

20. 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 Act read with Rule 7 of the Companies (Meetings of the Boardand its Powers) Rules 2014 and Regulation 22 of SEBI (LODR) Regulations 2015 andRegulation 9A of SEBI (Prohibition of Insider Trading) Regulations 2015 to enablestakeholders (including Directors Employees retainers franchisees etc.) to reportunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct or instances of leak of unpublished price sensitive information. The Policyprovides for adequate safeguards against victimization of Director(s)/ employee(s) andprovides for direct access to the Chairman of the Audit Committee in exceptional cases.The Protected Disclosures if any reported under this Policy are to be appropriately andexpeditiously investigated by the Ethics Committee. Your Company hereby affirms that noDirector/ employee has been denied access to the Chairman of the Audit Committee and thatthe complaints received during the Financial Year were promptly addressed and resolvedwith appropriate action taken thereon. The Vigil Mechanism/ Whistle Blower Policy isavailable on the website of the Company at the web linkwww.cleducate.com/policies/Vigil_Mechanism_Policy_CLEducate.pdf

21. Corporate Social Responsibility

Pursuant to Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 your Company has constituted a Corporate SocialResponsibility Committee (the "CSR Committee"). The Composition and the terms ofreference of the CSR Committee are provided in the Report on Corporate Governance formingpart of this Annual Report. The CSR Policy is available on the website of the Company atthe web link www.cleducate.com/policies/CL%20Educate%20Limited_CSR%20Policy.pdf

CSR Funds (Past & Present)

Particulars Amount (Rs in Lakhs)
Accumulated CSR amount pending to be spent (as on March 31 2020) 38.82
Add: CSR amount required to be spent during Financial Year 2020-21 -
Less: CSR amount spent in the Financial Year 2020-21 53.25
Accumulated CSR amount pending to be spent (as on March 31 2021) (excess amount spent) (14.43)

CSR Projects

The Board of Directors has on the recommendation of the CSR Committee approved CSRprojects / programmes / activities to be undertaken by the Company either itself orthrough its implementing Agency Career Launcher Foundation a list of which is availableon the Company's website at www.cleducate.com/policies/CL-CSR-Projects.pdf

CSR Spend 2020-21

Particulars Amount (Rs in Lakhs)
CSR amount required to be spent during Financial Year 2020-21 -
Less: CSR amount spent on ongoing projects during the Financial Year 2020-21 50.00
Less: CSR amount spent on other than ongoing projects during the Financial Year 2020-21 3.25
Less: Administrative overheads relating to CSR Activities carried out during FY 2020-21 -
Closing Balance as on March 31 2021 53.25

During the Financial Year 2020-21 the Company incurred an excess CSR expenditure ofRs. 53.25 Lakhs calculated as per the provisions of Section 135 of the Companies Act2013 and the Companies (Corporate Social Responsibility Policy) Rules 2014. The CSRCommittee as well as the Board of Directors of the Company both approved the set-off ofthe excess amount spent during the Financial Year 2020-21 against the Company's CSRliability over the successive three financial years.

The Annual report on CSR Activities is annexed as Annexure III.

22. Directors' Nomination and Remuneration Policy

The Nomination Remuneration and Compensation Committee (NRC Committee) of the Companyformulates the criteria for determining qualifications positive attributes andindependence of a director and recommends to the Board the criteria for determining theremuneration for the Directors key managerial personnel and/or other senior levelemployees of the Company.

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 keeping the provisions of theCompanies Act 2013 in mind.

Details of the remuneration approved by the NRC Committee as well as the Board ofDirectors for Executive Directors for the Financial Year 2020-21:

(Rs in Lakhs)

S. No. Executive Director Fixed Compensation (Upto) Variable Compensation (Upto) Total Compensation (Upto)
1 Mr. Satya Narayanan R 86.00 43.05 129.05
2 Mr. Gautam Puri 86.00 43.05 129.05
3 Mr. Nikhil Mahajan 83.69 41.69 125.38

Details of the Remuneration actually paid / payable to Executive Directors for theFinancial Year 2020-21:

(Rs in Lakhs)

S. No. Executive Director Fixed Compensation Variable Compensation (Please Refer note 1 below) Total Compensation
1 Mr. Satya Narayanan R 53.61 Nil 53.61
2 Mr. Gautam Puri 53.61 Nil 53.61
3 Mr. Nikhil Mahajan1 60.67 Nil 60.67

includes an amount equivalent to 108000 AED that is the remuneration payable to Mr.Nikhil Mahajan out of Company's Dubai business operations for the Financial Year 2020-21.

Commission paid/payable to Non-Executive Directors for the Financial Year 2020-21:

Commission paid/payable for Financial Year 2020-21
S. No. Non-Executive Independent Directors Recommended (% of Net Profits) Amount payable (Please refer note 1 below)
1 Mr. Girish Shivani Upto 0.15% of the net profits Nil
2 Mr. Viraj Tyagi2 Upto 0.15% of the net profits Nil
3 Ms. Madhumita Ganguli Upto 0.15% of the net profits Nil
4 Mr. Sanjay Tapriya Upto 0.15% of the net profits Nil
5 Mr. Piyush Sharma1 Upto 0.15% of the net profits Nil

 

1 Mr. Piyush Sharma was appointed as a Non-Executive Independent Director on theBoard of the Company on and with effect July 17 2020.

 2 Mr. Viraj Tyagi Non-Executive Independent Director of the Companyresigned from the Board of the Company with effect from November 02 2020.

Note:

1. As the Company has incurred losses during the financial year 2020-21 theNon-Executive Directors of the Company are not entitled to any Commission payment for theFinancial Year 2020-21. For the same reasons the Executive Directors of the Company havevoluntarily decided to waive off their variable payout for the Financial Year 2020-21. TheRemuneration policy (Recommendation report of NRC Committee for the financial year2020-21) is available on the website of the Company at the web Linkwww.cLeducate.com/poLicies/recommendation-report-of-nrc-committee-2020-21.pdf.

Salient features of the process of determination of the Remuneration of Directors arementioned below:

i. Approval of the Shareholders:

The general body of shareholders approves the overall maximum managerial remunerationthat may be paid to the Directors (Executive as well as Non-Executive) generally over aperiod of 3 years.

ii. Recommendation to the Board by the NRC Committee:

Within the overall limit approved by the shareholders the remuneration payable for aparticular year is recommended by the Nomination Remuneration and Compensation (NRC)Committee (comprising of all non-executive Directors with majority of them beingindependent) to the Board taking into account the following key considerations:

a. For Executive Directors:

i) The provisions of Companies Act 2013 and any other law for the time being in forcerelating to Companies;

ii) Market factors;

iii) The executive and operational responsibilities carried out by the Directors forthe Company;

iv) Market salary of people with similar background/educational qualification/experience to ensure that Directors receive a fair compensation and there is"headroom" to pay competitive salaries to the Director's direct reports and forattracting new talent in the Company;

v) Compensation trends for the past years; and

vi) Inflation index.

The NRC Committee recommends the split between fixed and variable salaries payable tothe Executive Directors of the Company for any Financial Year.

For calculating the variable compensation to be actually paid to the ExecutiveDirectors for any Financial Year NRC Committee considers the % achievement vs. budget ontwo metrics- Total Revenue and Total EBIDTA giving equal weightage (50% each) to the twometrics according to a pre-decided formula. Audited results are used for all actualperformance metrics. If audited results are not available then latest interim results areused.

b. For Non-Executive Directors:

i) The provisions of Companies Act 2013 and any other law for the time being in forcerelating to Companies;

ii) number of meetings attended by the director during the year

iii) contribution to the Board and Committees and

iv) participation in the Board matters.

iii. Approval by the Board:

Based on the recommendation of the NRC Committee the Board approves the remunerationin whatever form payable to the Directors for the year.

iv. Ensuring Compliance with the Companies Act 2013

At the year end the Remuneration paid / payable during / for the year is checkedagainst the provisional profitability position of the Company in order to comply with therelevant provisions of the Companies Act 2013 and the Rules made thereunder.

23. 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 theorganizational vision.

The relevant information required to be provided under Section 197(12) of the Act readwith Rule 5(1) of the Companies

The relevant information required to be provided under Section 197(12) of the Act readwith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016 is given in Annexure V.

24. Policy on Prevention Prohibition and Redressal of Sexual Harassment at Workplace

The Company has a policy against sexual harassment at the workplace and has constitutedan Internal Complaints Committee and has complied with the provisions in this respect asare applicable under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. There was no complaint received from any employee during theyear nor is any complaint pending or outstanding for redressal as on March 31 2021. TheCompany conducts awareness programs at regular interval / provide necessary updates /guidance through its website and through other employee communication channels.

The Company's Policy on sexual harassment at the workplace is available on the websiteof the Company at the web linkwww.cleducate.com/policies/Policy-against-Sexual-Harassment.pdf

25. Particulars of Loans Guarantees and Investments

Details of Loans Guarantees and Investments made by the Company covered under theprovisions of Section 186 of the Act are given in the notes to the Financial Statements.

26. Particulars of Contracts or Arrangements with Related Parties

All arrangements or transactions entered by the Company with Related Parties during theFinancial Year 2020-21- were in the Ordinary Course of Business and on an Arm's Lengthbasis. As a matter of practice all Related party transactions are placed for approvalbefore the Audit Committee and are brought to the notice of the Board on a periodic basis.

During the year under review the Company has not entered into any contracts /arrangements / transactions with related parties which could be considered as material inaccordance with the policy of the Company on material related party transactions or underSection 188(1) of the Act. Accordingly there are no particulars to be reported in FormAOC-2.

Details of the Related Party Transactions as required under Listing Regulations andthe relevant Accounting Standards are given in note no. 45 to the Standalone FinancialStatements.

The Company's Policy on Materiality of Related Party Transactions and on dealing withRelated Party Transactions is available on the website of the Company at the web link :www.cleducate.com/policies/Policy_for_Determining_Material_Subsidiary_CLEdcuate.pdf

27. Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 read withRule 12 of the Companies (Management and Administration) Rules 2014 the Annual Returnfor the Financial Year 2020-2021 is available on the website of the Company at the weblink www.cleducate.com/pdf/agm/2021/notices/Annual-Return-March-31-2021.pdf

28. Details of the Amended and Restated CL ESOP Plan 2014 (Formerly known as CL ESOPPlan 2008)

The current validity of the CL ESOP Plan 2014 expires on September 04 2021. The Boardof Directors has on the recommendation of the Nomination Remuneration and CompensationCommittee of the Company approved the extension of the term of the CL ESOP Plan 2014 fora period of 4 years i.e. from September 05 2021 to September 04 2025 subject toapproval of the Shareholders of the Company by way of a Special Resolution. The Resolutionto renew the Amended and Restated Career Launcher Employee Stock Options Plan 2014'(hereinafter "ESOP Scheme") for a period of 4 (four) years forms part of theNotice of the 25th AGM.

The Company's ESOP Plan - Career Launcher Employee Stock Options Plan 2014 ("CLESOP Plan 2014" or "ESOP Scheme") is administered and monitored by theNomination Remuneration & Compensation Committee of the Board.

Status update on CL ESOP Plan 2014 as on the date of this report:

Particulars No. of Options
Options Reserved 250000
Options Exercised 82475
Options Outstanding 167525

A Certificate dated July 26 2021 has been issued by the Statutory Auditor of theCompany certifying that the current ESOP Scheme of the Company is being implemented inaccordance with Regulation 13 of SEBI (Share Based Employee Benefits) Regulations 2014.The same shall be made available by the Company for inspection of the members at the 25thAnnual General Meeting.

The details as required to be disclosed under the Act and SEBI (Share Based EmployeeBenefits) Regulations 2014 are available at the website of the Company at the followingweb link www.cleducate.com/policies/CL-Educate-ESOP-Disclosure-for-year-ended-31-03-2021.pdf

29. Disclosure of Energy conservation Technology Absorption & Foreign ExchangeEarnings & Outgo

The Company does not carry out any manufacturing activity. However wherever possibleand feasible continuous efforts have been made for conservation of energy and to minimizeenergy costs and to upgrade the technology with a view to increase the efficiency and toreduce cost of operations.

At CL our aim is to transform the way students learn. With the advent of artificialintelligence and industry 4.0 technologies which promise to transform our everyday livesit becomes imperative for us to utilize them to significantly impact learning outcomes.

In this pursuit of transforming the way our students learn every year we developed ourAI-enabled platform christened as Aspiration.AI. This platform brings together variousintuitive features that come together to make this a truly smart experience.

1 CAT Percentile Predictor (CAT PP): Take for example the CAT percentilepredictor which has over the years correctly predicted the CAT percentiles of manystudents up to the second digit after the decimal point. CAT PP works on a model thattakes into account a student's performance in their Mock (practice) CATs. That coupledwith the database of students we have accumulated over the years gives the model thedesired accuracy.

2. IIM Profilizer: It is one of our most important efforts to add value to thestudents' preparation. IIM Profilizer helps the students by giving them a true picture ofwhich IIMs and B-schools can they really make it to and at what percentile. This is a toolthat is AI-driven and has been patented by CL a few years ago and has continued to makestudents more focused in their preparation since then.

3. CAT Analytics: Our CAT Analytics tool compares the Mock CATs that are givento the students and superimposes their difficulty level onto the actual CAT paper (foreach of the slots). This gives a ring-side view on how each Mock CAT paper is made closestto the actual CAT not only in the overall level of difficulty but also drilled down tosection wise and topic wise level. This gives the student writing a Mock a simulation ofthe actual exam difficulty much before she encounters the real CAT.

4. Identity Stitching: With the help of a 3rd party tool Snowplow today we areable to stitch the user identity and the behavior coming in from various sources. Theresult of this is our DMP data which gives the complete and exact picture of the userjourney on our digital property. It includes crucial things right from the user source uptill the purchase and post-purchase stages.

5. AI-driven Digital Marketing: While the DMP data gives our marketing efforts abig boost we utilize AI algorithms to deploy the outcomes of the user analysis. Forexample we utilize the user experience (depicted through the Lead Score)

to algorithmically decide which adversarial banner to show to the user on the website.This has taken our marketing to an extremely personalized level.

6. Sales and Academic Nudges: Basis the analysis of the user intent we show ouronline e-store visitor relevant nudges. These nudges improve the users' confidence in theproduct. This is a result of our analysis of the user-intent so that relevant nudges canbe shown to the audience.

7. Lead nurturing using a high-end platform - With the use of Netcore we areable to do automated lead nurturing using emailers web pushes and SMSes to increaseengagement. The platform allows us to do persona-based targeting to visitors on ourwebsite thus allowing us to run personalised campaigns. With Netcore's researchedapproach email ‘inboxing' improved resulting in better Open Rates in addition to60% reduction in the cost of emailing.

8. Analytics tool - We have invested in Matomo as a tool to help us understandonline user behavior. With the help of heatmaps scrolls etc. we are now able to trackuser behavior and journeys. This helps us in better placement of our content and keypointers on important pages.

These and other such efforts continue to serve students who are our paramountimportance.

During the Financial Year under review the Foreign Exchange earnings and outgo were asfollows:

The foreign exchange earnings and outgo (on Standalone basis) are detailed below:

(Rs in Lakhs)

Particulars FY 2021 FY 2020
Test-preparation training services 351.08 420.58
Sale of study material 262.62 426.82
Other income - 17.85
Total 613.70 865.25

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

(Rs in Lakhs)

Particulars FY 2021 FY 2020
Traveling and conveyance - 9.17
Bank charges 11.70 10.72
Rent 99.16 116.26
Salary and wages 23.52 75.52
Faculty expenses 110.73 84.58
Others 493.70 440.32
Total 738.81 736.57

30. Secretarial Standards issued by the Institute of Company Secretaries of India(ICSI)

Your Company complies with the mandatory Secretarial Standards issued by the ICSI.

31. Directors' Responsibility Statement

To the best of our knowledge and belief and according to the information andexplanations obtained by us the Board of Directors makes the following statements interms of Section 134(3)(c) of the Act:

a. in the preparation of the Annual Accounts for the Financial Year ended March 312021 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

b. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the end of the Financial Year endedMarch 31 2021 and of the Losses of the Company for that period;

c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the Annual Financial Statements / Annual Accounts on a'going concern' basis;

e. the Directors have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and are operatingeffectively; and

f. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.

32. 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.

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