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CL Educate Ltd.

BSE: 540403 Sector: Others
NSE: CLEDUCATE ISIN Code: INE201M01011
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VOLUME 96
52-Week high 230.00
52-Week low 106.60
P/E 20.74
Mkt Cap.(Rs cr) 176
Buy Price 120.00
Buy Qty 32.00
Sell Price 127.00
Sell Qty 50.00
OPEN 122.50
CLOSE 124.00
VOLUME 96
52-Week high 230.00
52-Week low 106.60
P/E 20.74
Mkt Cap.(Rs cr) 176
Buy Price 120.00
Buy Qty 32.00
Sell Price 127.00
Sell Qty 50.00

CL Educate Ltd. (CLEDUCATE) - Director Report

Company director report

Dear Member(s)

Your Directors are pleased to present the Twenty Second Annual Reporton the business and operations of the Company together with the Company's AuditedFinancial Statements and the Independent Auditor's Report thereon for the FinancialYear ended March 31 2018. The results of our operations for the year under review aregiven below:

1. Results of Our Operations

S. No. Particulars Standalone Consolidated
FY 2018 FY 2017 FY 2018 FY 2017
I Revenue From operations 15521.39 14285.33 28888.97 26330.09
II Other income 1344.24 960.73 1291.23 1059.93
III Total income (I+II) 16865.63 15246.06 30180.20 27390.02
IV Expenses
(a) Cost of material consumed - - 1286.76 1417.35
(b) Purchases of Stock-in-Trade 1091.87 1065.77 104.22 5.17
(c) Changes in inventories of finished goods Stock-in -Trade and work-in-progress 10.38 (65.96) 13.49 (207.70)
(d) Employee benefits expense 3213.37 2695.12 6109.56 5369.32
(e) Franchisee expenses 5877.89 4865.36 6121.53 4865.36
(f) Other expenses 5778.14 4950.32 14271.32 12522.88
V Total Operating expenses 15971.65 13510.61 27906.88 23972.38
EBITDA (III-V) 893.98 1735.45 2273.32 3417.64
(g) Finance costs 340.10 541.71 642.98 781.48
(h) Depreciation and amortization expense 690.13 479.27 846.53 670.80
VI Total Expenses 17001.88 14531.59 29396.39 25424.66
Profit before tax (III-VI) (136.25) 714.47 783.81 1965.36
Share of profit of equity accounted investees - - 6.80 -
VII Profit before tax (136.25) 714.47 790.61 1965.36
VIII Tax expense: 62.34 221.69 466.25 609.10
IX Profit from continuing operations for the period (VII-VIII) (198.59) 492.78 324.36 1356.26
X Profit from discontinued operations - - 249.58 383.05
XI Tax expenses of discontinued operations - - - 157.93
XII Profit from Discontinued operations (after tax) - - 249.58 225.12
XIII Net Profit for the period (IX+XII) (198.59) 492.78 573.94 1581.38
XIV Other Comprehensive Income 13.34 4.48 18.71 21.73
XVII Total Comprehensive Income for the period (Comprising (185.25) 497.26 592.65 1603.11
Profit and Other comprehensive Income for the period) (XIII+XIV)
XIX Earnings per equity share (for continuing operation) excluding Other Comprehensive Income
(a) Basic (1.40) 4.12 2.29 11.34
(b) Diluted (1.40) 4.11 2.28 11.32
XX Earnings per equity share (for discontinued operation):
(a) Basic - - 1.76 1.88
(b) Diluted - - 1.76 1.88

2. Financial Review Standalone

Our total revenue from operations on standalone basis grew by 8.65%from Rs.14285.33 Lacs in fiscal 2017 to Rs.15521.39 Lacs in fiscal 2018 primarily onaccount of increase in sale of text books by 14.47% from Rs.2818.53 Lacs in fiscal 2017to Rs.3226.40 Lacs in fiscal 2018 and increase in Sale of Services by 9.18% fromRs.11031.56 Lacs in fiscal 2017 to Rs.12044.22 Lacs in fiscal 2018. The total income forthe year 2018 increased by 10.62 % from Rs.15246.06 Lacs in fiscal 2017 to Rs.16865.63Lacs in fiscal 2018.

Our EBITDA on standalone basis decreased by over 48% from Rs.1735.45Lacs in fiscal 2017 to Rs.893.98 Lacs in fiscal 2018. The decrease can primarily beattributed to increase in other expenses by 16.72% from Rs.4950.32 Lacs in fiscal 2017 toRs.5778.14 Lacs in fiscal 2018 and increase in employee benefit expenses by 19.23% fromRs.2695.12 Lacs in fiscal 2017 to Rs.3213.37 Lacs in fiscal 2018. The increase in aboveexpenses can primarily be attributed to the acquisitions which the company has made duringthe year which includes acquisition of ETEN the test preparation business division ofPearson's IndiaCan Education which as per management estimates made a EBITDA levelloss of about Rs.350 Lacs additional provisioning for the vocational receivables of aboutRs.400 Lacs EBITDA level loss of about Rs.100 Lacs on the account of integration ofVistamind and Senior Management hiring of about Rs.250 Lacs.

The management is confident that the acquisitions and investmentsincluding senior management hiring will help company with expansion of product offeringsincrease profitability and margins going forward.

Consequently Company at Net Profit level had a loss of Rs.198.59 Lacsin fiscal 2018 as compared to profit of Rs.492.78 Lacs in fiscal 2017.

Consolidated

Our total revenue from operations on a consolidated basis increased by9.72% from Rs.26330.09 Lacs in fiscal 2017 to Rs.28888.97 Lacs in fiscal 2018 primarilyon account of an increase in sale of products by 6.40% from Rs.4731.73 Lacs in fiscal2017 to

Rs.5034.54 Lacs in fiscal 2018.

Our EBITDA on consolidated basis decreased by ~33% from Rs.3417.64Lacs in fiscal 2017 to Rs.2273.32 Lacs in fiscal 2018. This decrease is primarily due toincrease in employee benefit expenses by 13.79% and other expenses by 13.96%.

The decrease in EBITDA levels of the company can be primarilyattributable to acquisition of ETEN the test preparation business division ofPearson's IndiaCan Education which as per management estimates made a EBITDA levelloss of about Rs.350 Lacs additional provisioning for the vocational receivables of aboutRs.400 Lacs EBITDA level loss of about Rs.100 Lacs on the account of integration ofVistamind Senior Management hiring of about Rs.250 Lacs and Expected Credit Loss (ECL)provisioning done in our subsidiaries.

Consequently EBITDA margin decreased from 12.48% in fiscal 2017 to7.53% in fiscal 2018.

As a result our Net Profit for the year decreased by over 63% fromRs.1581.38 Lacs in fiscal 2017 to Rs.573.94 Lacs in fiscal 2018.

3. Dividend

Your Directors do not recommend any dividend for the Financial Year2017-18.

4. Transfer to Reserves

The Company did not transfer any amount to reserves during theFinancial Year 2017-18.

5. Capital and Finance

Issue of equity share capital during the Financial Year 2017-18:

S. No. Date of Allotment No. of Equity Shares Face Value (Rs.) Issue Price (Rs.) Nature of Consideration Nature of Allotment
1 October 13 2017* 2400 10 300 Cash Allotment against exercise of options granted under CL ESOP Plan 2008

* Allotment of 800 Equity Shares each to Mr. Sridar Iyengar Mr. SafirAnand and Mr. Viraj Tyagi Independent Director(s) of the Company.

The issued subscribed and paid up equity share capital of the Companyincreased from Rs.141632780 as on March 31 2017 to

Rs.n 141656780 as on March 31 2018.

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

6. Segment Reporting & Operational Overview

Of the total revenues for the year ended March 31 2018 on astandalone basis approx. 92.03% came from Operations while 7.97% came from Other Income.

The company has identified two business segments as primary segments:Consumer Test Prep and Vocational training. The segment have been identified and reportedtaking into account the nature of products the differing risks and returns theorganization structure and the internal financial reporting systems.

Consumer division mainly consists of Test Prep which includes coachingfor higher education entrances like MBA BBA Law Bank SSC Civil Services GATE CA-CPTetc. Vocational training includes specific projects undertaken (including governmentprojects). The revenue of operations came only from Consumer Test Prep. This was primarilydue to conscious decision of the company to reduce its exposure to government vocationalprojects due to its working capital intensive nature and slow recovery of receivables fromthe government The segmentation of revenues by business segments on a standalone basis isas follows:

(Rs.in Lacs)
Segment FY 2018 % of total FY 2017 % of total
Consumer Test Prep 15521.39 100.00% 14047.40 98.33%
Vocational Training - 0.00% 237.93 1.67%
Total Revenue from Operations 15521.39 100.00% 14285.33 100.00%

Our revenue from Consumer Test Prep segment increased by 10.49% fromRs.14047.40 Lacs in fiscal 2017 to Rs.15521.39 Lacs in fiscal 2018 primarily on theaccount of increase in sale of study material given the increase in the average pricingacross our Test Preparation and Training course offerings over the previous year.

The company has made a conscious decision to reduce its exposure togovernment projects (Vocational training) due to its high working capital nature and slowrecovery of receivables from the government. As a result company has no revenue fromvocational segment in fiscal 2018 as compared to Rs.237.93 Lacs in fiscal 2017.

The Company has identified Geographical Segment as Secondary Segment.The segmentation of revenues by geographical segment on a standalone basis is as follows :

(Rs.in Lacs)
Segment FY 2018 % of total FY 2017 % of total
Within India 15000.10 96.64% 13854.88 96.99%
Overseas 521.29 3.36% 430.45 3.01%
Total Revenue from Operations 15521.39 100.00% 14285.33 100.00%

Of the total revenues for the year ended March 31 2018 on aconsolidated basis approx. 95.72% came from Operations while just 4.28% came from OtherIncome.

The group has identified the following reportable business segments asprimary segments: Consumer Business comprising of Test Prep & Publishing andEnterprise Business comprising of Corporate & Institutional. The segments have beenidentified and reported taking into account the nature of products the differing risksand returns the organization structure and the internal financial reporting system.

Consumer Business:

?Test Prep mainly includes coaching for higher educationentrance exams under the brand Career Launcher.

??Publishing mainly includes publishing and sale of educationalbooks to related and third parties under the brand GK Publications .

Enterprise Business:

??Corporate - The company provides the following services toCorporate clients under the brand Kestone Integrated Marketing Services:

• Integrated Sales & Marketing Services

• Digital & MarComm Services

• Customized Engagement Programs (CEP)

• Manpower Management & Training

• Strategic Business Solutions

?Institutional - The company provides the following services toInstitutional clients:

• Integrated solutions to educational institutions anduniversities across India.

• Student recruitment services

• Research & Incubations services through its brands CL Mediaand Accendere

• Career Development Center

??Others include now reduced Vocational training and discontinuedK-12 Operations.

??The segmentation of revenues by business segments on aconsolidated basis is as follows:

Segments FY 2018 % of total FY 2017 % of total
Consumer Test Prep 15826.82 54.78% 14047.41 53.35%
Consumer Publishing 4382.47 15.17% 4538.44 17.24%
Enterprise Corporate 10196.43 35.30% 9404.37 35.72%
Enterprise Institutional 1767.13 6.12% 1072.55 4.07%
Others 13.09 0.05% 361.89 1.37%
Inter-Segment Revenue (3296.97) -11.41% (3094.57) -11.75%
Total Revenue from 28888.97 100.00% 26330.09 100.00%
Operations

• Our revenue from Consumer Test Prep segment increased by 12.67%from Rs.14047.41 Lacs in fiscal 2017 to Rs.15826.82 Lacs in fiscal 2018 primarily on theaccount of increase in sale of study material given the increase in the average pricingacross our Test Preparation and Training course offerings over the previous year.

• Our revenue from Consumer Publishing segment decreased by 3.44%from Rs.4538.44 Lacs in fiscal 2017 to Rs.4382.47 Lacs in fiscal 2018 due to defermentof certain exams resulting in lower book sales which got deferred till the dates ofexamination.

• Our revenue from Enterprise Corporate segment increased by 8.42%from Rs.9404.37 Lacs in fiscal 2017 to Rs.10196.43 Lacs in fiscal 2018 due to anincrease in number of events organized increase in number of clients and average ofrevenue per customer.

• Our revenue from Enterprise Institutional segment increased by64.76% from Rs.1072.55 Lacs in fiscal 2017 to Rs.1767.13 Lacs in fiscal 2018 primarilydue to increase in number of clients.

• Others includes revenue from discontinued operations andvocational training.

• The Company has identified Geographical Segment as SecondarySegment. The segmentation of revenues by geographical segment on a consolidated basis isas follows:

(Rs.in Lacs)
Segment FY 2018 % of total FY 2017 % of total
Within India 27674.43 95.80% 25832.59 98.11%
Overseas 1214.54 4.20% 497.50 1.89%
Total Revenue from 28888.97 100.00% 26330.09 100.00%
Operations

• Detailed analysis of performance of the company and itsbusinesses has been presented in the Management Discussion and Analysis section whichforms a part of this report.

7. Material changes

The following Material Change has occurred between the end of theFinancial Year (March 31 2018) and the date of the report (July 06 2018).

Pursuant to the provisions of Section 12 and Section 13 and any otherapplicable provisions if any of the Companies Act 2013 (including any statutorymodification or re-enactment for the time being in force) read with Rule 30 of Companies(Incorporation) Rules 2014 and subject to the approval of members of the Company by aSpecial Resolution and approval of the Hon'ble Regional Director Northern RegionNew Delhi or any other Government Authority in this regard and subject to suchpermissions sanctions or approvals as may be required under the provisions of the saidAct or under any other law for the time being in force the Board has provided itsapproval for shifting of the Registered Office from the "National Capital Territoryof Delhi" to the "State of Haryana" and substitute the Clause-II of theMemorandum of Association of the Company by the following clause:

II. The Registered office of the Company will be situated in the Stateof Haryana.

On obtaining the confirmation from Regional Director Northern Regionthe Registered Office of the Company shall be shifted from "A-41 Espire BuildingLower Ground Floor Mohan Co-operative Industrial Area Main Mathura Road New Delhi– 110044" to "Plot No. 9A Sector-27A Mathura Road Faridabad Haryana-121003".

8. Material and Significant Orders Passed By Regulators &Courts

During the Financial Year 2017-18 no significant and material ordershave been passed by any Regulators or Courts or Tribunals against the Company impactingthe going concern status and company's operations in future.

9. Internal Financial Control Systems

CL has aligned its current systems of internal financial control withthe requirement of the Companies Act 2013. The Internal Control systems are intended toincrease transparency and accountability in an organisation's process of designingand implementing a system of internal control. The framework requires a company toidentify and analyse risks and manage appropriate responses. The Company has successfullylaid down the framework and ensured its effectiveness. CL'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 revenue as well as expenditure. 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.

Our management assessed the effectiveness of the Company'sinternal control over financial reporting as of March 31 2018. The assessment involvedself-review peer review and external audit.

??CL has re-appointed Genpact Enterprise Risk Consulting LLP(earlier known as Axis Risk Consulting Services Pvt. Ltd.) to oversee and carry outinternal audit of its activities. The audit is based on an internal audit plan which isreviewed each year in consultation with the statutory auditors (Haribhakti & Co. LLP)and the Audit Committee. The conduct of internal audit is oriented towards the review ofinternal controls and risks in its operations such as IT processes and general controlsaccounting and finance procurement employee engagement including most of thesubsidiaries. The Audit Committee reviews reports submitted by the management and auditreports submitted by internal auditors and statutory auditors. Suggestions for improvementare considered and the Audit Committee follows up on corrective action. The AuditCommittee also meets CL's statutory auditors to ascertain inter alia their views onthe adequacy of internal control systems and keeps the Board of Directors informed of itsmajor observations periodically.

During the year 2017-18 an Internal Financial Control Systemsstudy with respect to revenue procurement payroll Inventory Finance & Accounts andStatutory Compliance (Taxation) was done by MNV & Co. Chartered Accountants and didnot indicate any material weaknesses in its report. Some of the operating weaknesseshighlighted are being worked upon by the management.

??Haribhakti & Co. LLP the statutory auditors of the Companyhas audited the financial statements which forms part of this annual report and has issuedan attestation report on our internal financial controls over financial reporting (asdefined in section 143 of Companies Act 2013).

Qualified opinion by Statutory Auditors on adequacy and operatingeffectiveness of Internal Financial Controls over Financial Reporting for CL on aStandalone basis: a) Procurement policy implemented for purchase of goods and serviceswas not operating effectively which could potentially result in the Company procuringunnecessary goods and services or procuring goods of lower quality or procure goods andservices at higher prices.

Managements' response:

While the purchase policy has been formulated the implementation hasnot been up to the desired level. We are working towards improving compliance keeping inmind the size and nature of business within the ERP to ensure purchase order and receiptof material are recorded in the ERP module and bills linked to such purchase order aremarked. This module will help control vendor master inputting of competitive quotes orcomments before issue of purchase order and access control. b) Policy of periodic balanceconfirmations and reconciliations of receivables / payables were not operating effectivelyduring the year which may result in unwarranted disputes and over/ understatement ofparty balances

Managements' response:

The company prior to being listed had a practice of obtaining suchbalances at the end of the year. The company has already started the process ofconfirmation from a selected sample on a quarterly basis with effect from the firstquarter of FY 18-19.

Qualified opinion by Statutory Auditors on adequacy and operatingeffectiveness of Internal Financial Controls over Financial Reporting for CL on aconsolidated basis: a) In case of one of its subsidiary Kestone Integrated ManagementServices Private Limited comprehensive procurement policies for purchase of goods andservices have not been documented which could potentially result in the aforesaid Companyprocuring unnecessary goods and services or procuring goods of lower quality or procuregoods and services at higher prices.

Managements' response:

In case of Kestone Integrated Management Services Private Limitedprocurement is primarily done in the events management business. A budget is defined forevery event within the APEX ERP and the spending is done within such budget. Also most ofthe procurement is for specific short time use. b) In case of one of its subsidiaryKestone Integrated Management Services Private Limited has not maintained adequatedocumentation for ‘partially completed events' in the Event management servicesfor the complete year/ all the events in the newly implemented APX ERP software which wasimplemented with effect from January 2018. This could potentially result in incorrectrecording of provisional revenue and corresponding provisional expenses in respect of suchincomplete services at the reporting date.

Managements' response:

Within Kestone Integrated Management Services Private Limited APEX ERPmodule functionality is being built to capture percentage completion details which willaddress this concern.

10. Details of Subsidiaries/Joint Ventures/Associate Companies

As on date our Company has 9 (nine) subsidiaries (including threeindirect subsidiaries) and 2* (two) associate company to carry out activities in variousstreams of education and other educational training. A brief profile of our subsidiariesand associate company is given hereunder:

a. Kestone Integrated Marketing Services Private Limited (Kestone)

Our Company acquired Kestone on April 01 2008 as a wholly ownedsubsidiary of the Company. Under our brand Kestone we enjoy strong relationships withcorporates to whom we provide our integrated business marketing and sales services.Kestone focuses on a wide variety of Corporates across various segments and industries.

Kestone provides integrated business marketing and sales services toour corporate customers including event management marketing support (including digitalmarketing support in the form of online marketing initiatives to support offlinemarketing campaigns) customer engagement (including audience generation lead generationloyalty and reward programs and contest management) managed manpower and trainingservices. The total income of Kestone was Rs.9815.48 Lacs in Financial Year 2018 asagainst Rs.9553.44 Lacs in Financial Year 2017 recording increase by 2.74% over theprevious year. The business has shown growth in top line.

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

Kestone CL Asia Hub Pte. Ltd. (Previously Known as ‘Kestone AsiaHub Pte. Ltd' Singapore is a Step Down Subsidiary of the Company. It is currentlyengaged in providing integrated marketing solutions for products and services to conducteducational & consulting programs research related services etc. for and on behalf ofinland and overseas clients and customers. However Kestone CL Asia actually started doingbusiness in Singapore from Financial Year 2016-17. Kestone CL Asia has also started abranch office in Dubai inter alia to provide integrated sales & marketing service tocorporates & instiutions in middle east.

The total income of Kestone CL Asia was Rs.694.80 Lacs in FinancialYear 2018 as against Rs.164.02 Lacs in Financial Year 2017 recording substantial increaseby 323.61% over the previous year.

a.2. Kestone CL US Limited USA

Kestone CL Asia has incorporated a wholly owned subsidiary in USA onMarch 22 2018 in the name of Kestone CL US Limited with an objective to provideintegrated sales & marketing service to corporates & instiutions in USA.

b. CL Media Private Limited (CL Media)

CL Media as a wholly owned subsidiary of CL was incorporated onFebruary 01 2008. CL Media provides integrated solutions to educational institutions anduniversities including business advisory and outreach support services.

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

The business has shown growth and the total income of CL Media whichwas Rs.4084.07 Lacs in Financial Year 2018 as against

Rs.3757.59 Lacs in Financial Year 2017 has increased by 8.69% overthe previous year.

c. GK Publications Private Limited (GKP)

GKP became a subsidiary of CL Educate Limited on November 12 2011. GKPis a wholly owned subsidiary of the Company. GKP is currently engaged in the business ofdistribution of test preparation guides books and other academic material.

The business of GKP has shown small growth and the total income hasincreased from about Rs.1836.53 Lacs in 2017 to about

Rs.1884.11 Lacs in 2018 thus reflecting a 2.59% increase.

d. Accendere Knowledge Management Services Private Limited (AKMS)

AKMS became a wholly owned subsidiary of the Company during the yearunder review pursuant to the purchase of balance 49% i.e. 5880 no. of equity shares ofAKMS by the Company on April 12 2017. AKMS was incorporated under the Companies Act 1956on September 19 2008. AKMS is currently engaged in the business of facilitatingeducational institutions and establishing their institutional credibility internationalpresence and thought leadership by improving their research output in terms of both thequality and quantity of research articles published by them.

The business of AKMS has shown substantial growth and the total incomehas increased from about Rs.178.43 Lacs in 2017 to about Rs.277.81 Lacs in 2018 thusreflecting a 55.70% increase.

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

CLEIS is a wholly owned subsidiary of CL incorporated on June 16 2005.CLEIS was engaged in the business of providing educational services for K-12 schoolsincluding brand licensing and providing education soft skills under the brand Indus WorldSchool.

Pursuant to the Business transfer agreement dated March 16 2017("CLEIS Business Transfer Agreement") and its amendment dated July 18 2017executed by CLEIS with B&S Strategy Services Private Limited ("B&S orEduvisors") and with CL as a confirming party the business of running and operatingpre-schools and providing schools management services carried on by the CLEIS was sold onslump sale basis for a total consideration of Rs.4650.00 Lacs of which Rs.200.00 Lacs waspaid in cash Rs.4050.00 Lacs by way of share swap and balance Rs.400.00 Lacs to bereceived as cash by March 31 2018 which is receivables as of date.

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

CLIP a wholly owned subsidiary of CLEIS and hence an indirectsubsidiary of CL was incorporated in the year 2008. CLIP was engaged in the business ofproviding infrastructure facilities for K-12 schools operating under the brand Indus WorldSchool. During the year under review CLIP executed a Business transfer agreement datedMarch 16 2017 ("CLIP Business Transfer Agreement") with CLEIS and I-TakecarePrivate Limited ("I-Takecare"):

Pursuant to the CLIP Business Transfer Agreement CLIP has agreed totransfer its business of providing leasing and infrastructural services required foroperating K-12 schools which are run by Nalanda Foundation and all assets liabilitiesrights obligations etc. thereof including land and buildings situated at Raipur andIndore and movable assets receivables and contracts in connection with operation of theK-12 schools situated at the aforementioned locations("School Infrastructure")on a slump sale basis to I-Takecare. The proposed sale of School Infrastructure is beingundertaken for a lumpsum consideration of

Rs.4500.00 Lacs to be paid by I-Takecare to CLIP out of whichRs.4000.00 Lacs is payable prior to the closing of such transaction and balance intranches. Further under the terms of the CLIP Business Transfer Agreement CLIP isrequired to pay a monthly interest amount calculated at 11% p.a. on advance saleconsideration of Rs.100.00 Lacs received from I-Takecare from the date of the CLIPBusiness Transfer Agreement until the date of closing of the transaction. The closing ofthe proposed sale of School Infrastructure is subject to fulfillment of certain conditionsprovided in the CLIP Business Transfer Agreement which include execution of sale deedsfor sale of land execution of assignment deed by CLIP in relation to the infrastructurecontracts entered into between CLIP and Nalanda Foundation and receipt of all requisiteconsents and approvals by CLIP. However till date I-Takecare has failed to fulfill itspart of the contract and payments. Till the Company is able to sell these assets theassets are leased to Nalanda Foundation on a quarterly rental basis.

e.2. B&S Strategy Services Private Limited (Associate Company ofCLEIS)*

B&S Strategy Services Private Limited was incorporated under theCompanies Act 1956 on April 09 2009. B&S is mainly engaged in the business ofrendering consulting services in the education sector and managing schools.

The total income of B&S Strategy Services Private Limited wasRs.330.75 Lacs in Financial Year 2018 as against Rs.110.53 Lacs in Financial Year 2017recording increase of 200% over the previous year.

*Note: During the financial year 2017-18 the Company through itsWholly Owned Subsidiary Company Career Launcher Education Infrastructure and ServicesLimited (CLEIS) held 43.40% of the voting rights in B&S Strategy Services PrivateLimited ("B&S or Eduvisors") and pursuant to Shareholders Agreement datedMarch 16 2017 the Company had representation on the Board of B&S and participationin all significant financial and operating decisions. Hence keeping in mind theCompany's significant influence over B&S as associate company of CLEIS thedetails of B&S are being shared at the relevant places in this Annual Report.

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

ICE GATE was incorporated under the Companies Act 2013 on August 122015. ICE GATE is engaged in the business of providing education for students preparingfor Graduate Aptitude Test in Engineering (GATE) and related exams. Pursuant to the SharePurchase Cum Shareholders Agreement entered into amongst CL ICE GATE and its Promotersdated October 18 2017 CL acquired 50.7% stake (5070 equity shares) in ICE GATE for anaggregate purchase consideration of Rs.623.61 Lacs. ICE GATE became a subsidiary of theCompany with effect from October 31 2017. The Company has also agreed to acquireremaining 49.3% shareholding in ICE GATE over a period of 60 months from the date of theabove Agreement. The total income of ICE GATE was Rs.661.47 Lacs in Financial Year 2018 asagainst Rs.410.30 Lacs in Financial Year 2017 recording increase of 61.22% over theprevious year.

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

361DM incorporated under the Companies Act 1956 on July 06 2006 isengaged in the business of research and technology driven learning and education provisionthat delivers large scale yet effective learning and education solutions to individualsorganizations and educational institutions currently engaged in business of inter aliaonline learning and education under the name and style and having the brand name/trademarkof 361Degree Minds. Pursuant to the Investment cum Shareholders Agreement dated August 032017 entered into amongst the Company 361DM and its Promoters the Company holds 4000005% Compulsorily Convertible Preference Shares (CCPS) of 361DM of Rs.10 each issued at apremium of Rs.90/- per share. The Company also holds 909 Equity shares of 361DMaggregating to 4.43% of paid-up equity share capital of 361DM.

The total income of 361DM was Rs.458.21 lacs in Financial Year 2018 asagainst Rs.403.46 in Financial Year 2017 thereby increasing by13.57% over the previousyear.

Change in the status of subsidiaries/associate companies/joint ventureduring the year:

There are no joint venture companies of the Company within the meaningof section 2(6) of the Companies Act 2013 ("Act").

The names of companies which have become subsidiaries or associatecompanies during the year are as follows:

S.No Name of the Company Date of becoming subsidiaries/ associate Subsidiaries/Associate
1 Accendere Knowledge Management Services Private Limited1 April 12 2017 Wholly Owned Subsidiary Company
2 Threesixtyone Degree Minds Consulting Private Limited (361DM) August 17 2017 Associate Company
3 ICE GATE Educational Institute Private Limited (ICE GATE) October 31 2017 Subsidiary Company
4 Kestone CL US Limited2 March 22 2018 Step Down Subsidiary Company
5 B&S Strategy Services Private Limited3 August 01 2017 Associate Company of CLEIS

1 Accendere Knowledge Management Services Private Limited becamea wholly owned subsidiary of the Company pursuant to the purchase of balance 49% i.e. 5880no. of equity shares of Accendere Knowledge Management Services Private Limited by theCompany on April 12 2017. 2 Kestone Integrated Marketing Services PrivateLimited Indian Party a Wholly owned Subsidiary of the Company has further incorporated aStep Down Subsidiary in USA on March 22 2018 in the name of Kestone CL US Limited. 3The Company through its Wholly Owned Subsidiary Company Career Launcher EducationInfrastructure and Services Limited (CLEIS) held 43.40% of the voting rights in B&SStrategy Services Private Limited.

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

Further pursuant to the provisions of section 136 of the Act theFinancial Statements of the Company including the Consolidated Financial Statements alongwith relevant documents and separate audited accounts in respect of subsidiaries andAssociates Company are available on the website of the Company (www.cleducate.com).

Equity Investment in Subsidiary Companies

As on March 31 2018 the Company's holding in its various directsubsidiaries were as follows: a) 1000000 Equity Shares of Rs.10 each comprising of 100%Equity Share Capital in Kestone Integrated Marketing Services Private Limited; b) 190000Equity Shares of Rs.10 each comprising of 100% Equity Share Capital in G K PublicationsPrivate Limited; c) 10000 Equity Shares of Rs.10 each comprising of 100% Equity ShareCapital in CL Media Private Limited; d) 12000 Equity shares of Rs.10 each comprising of100% Equity Share Capital in Accendere Knowledge Management Services Private Limited1e) 9447606 Equity Shares of Rs.10 each comprising of 100% Equity Share Capital inCareer Launcher Education Infrastructure and Services Limited; f) 5070 Equity Shares ofRs.10 each comprising of 50.70% Equity Share Capital in ICE Gate Educational InstitutePrivate Limited2.

1Accendere Knowledge Management Services Private Limited became awholly owned subsidiary of the Company pursuant to the purchase of balance 49% i.e. 5880no. of equity shares of Accendere Knowledge Management Services Private Limited by theCompany on April 12 2017.

2 ICE Gate Educational Institute Private Limited became asubsidiary of the Company pursuant to the purchase of 50.70% i.e. 5070 no. of equityshares of ICE Gate Educational Institute Private Limited by the Company on October 312017.

Investment in Associate Company

As on March 31 2018 the Company's holding in its AssociateCompanies is as follows: a) 400000 5% Convertible Preference Shares (CCPS) of Rs.10each in Threesixtyone Degree Minds Consulting Private Limited; b) 909 Equity shares ofRs.10 each comprising of 4.43% of Equity Share Capital in Threesixtyone Degree MindsConsulting Private Limited; c) During the financial year 2017-18 the Company through itsWholly Owned Subsidiary Company Career Launcher Education Infrastructure and ServicesLimited (CLEIS) held 43.40% of the voting rights in B&S Strategy Services PrivateLimited ("B&S or Eduvisors") and pursuant to Shareholders Agreement datedMarch 16 2017 the Company had representation on the Board of B&S and participationin all significant financial and operating decisions. Hence keeping in mind theCompany's significant influence over B&S as associate company of CLEIS thedetails of B&S are being shared at the relevant places in this Annual Report.

11.Fixed Deposits

During the year under review your Company has not invited or acceptedany deposits from the public/members pursuant to the provisions of Sections 73 and 76 ofthe Companies Act 2013 read together with the Companies (Acceptance of Deposits) Rules2014.

12.Auditors and Auditors' Report

Pursuant to the provisions of Section 139 of the Companies Act 2013and the Company (Audit and Auditors) Rules 2014 M/s. Haribhakti & Co. LLPChartered Accountants Statutory Auditors (ICAI Firm Registration No. 103523W) holds theoffice in the capacity of Statutory Auditors of the Company till the conclusion of theAnnual General Meeting to be held for the Financial Year 2018-19 subject to ratificationat every Annual General Meeting.

The Company has received written consent and a certificate stating thatthey satisfy the criteria provided under Section 141 of the Companies Act 2013 read withthe Companies (Audit and Auditors) Rules 2014 and that the appointment if ratifiedshall be in accordance with the applicable provisions of the Companies Act 2013 and rulesissued thereunder. As required under Clause 33 (1) (d) of the SEBI (LODR) Regulations2015 M/s. Haribhakti & Co. LLP Chartered Accountants have also confirmed that theyhold a valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.

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

In this connection the attention of the members is invited to itemnumber 4 of the Notice convening the Annual General Meeting.

Statutory Auditors' Report

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

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

‘The Company has granted unsecured loans to companies and otherparties covered in the register maintained under Section 189 of the Act.' (iii) (a)According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the terms and conditions of loansgranted by the Company to 2 parties covered in the register maintained under Section 189of the Act (total loan amount granted Rs. 0.17 Lacs and balance outstanding as at balancesheet date Rs. 538.63 Lacs) are prejudicial to the Company's interest on account ofthe fact that the Company is not charging any interest on such loan.

(iv) According to the information and explanations given to us inrespect of loans investments guarantees and securities the Company has complied withthe provisions of Section 185 and 186 of the Act except for the details given below:

(Rs.in lacs)
Nature of non- compliance Name of Company/party Amount Involved Balance as at March 31 2018
Loan given at rate of interest lower than prescribed Kestone Asia Hub Pte.Ltd. Nil 8.34
Career Launcher Education Foundation(CLEF) 0.17 530.30

Managements' response:

In view of no current operations of CLEF (one Party) the loan amountremained dormant during this Financial Year and for the interest of CL the outstandingloan amount has been guaranteed by our Promoter Bilakes Consulting Private Limited.Kestone Asia Hub Pte. Ltd. (other party) is the wholly owned subsidiary company ofKestone (wholly owned subsidiary company of CL) hence charging of interest at lower ratewill not impact the overall viability of CL Group. Kestone Asia is expected that ForeignSubsidiary will be able to repay the outstanding amount in financial year 2018-19.

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

(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.

Managements' response:

Due to unpredictability of business it is slightly difficult toestimate the net tax liability to be deposited so early in the year and hence generallythe Company waits till end of the year when its liability estimates is much clear todeposit advance tax with appropriate interest There is no instance of fraud reported byauditors under sub section (12) of section 143.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and based onthe recommendation of the Audit Committee the Board had appointed M/s. S. Anantha &Ved LLP Company Secretaries Mumbai (LLP IN: AAH-8229) as the Secretarial Auditors of theCompany on May 17 2017 for the Financial Year 2017-18. The Secretarial Audit Report forthe Financial Year 2017-18 is annexed herewith as Annexure VIII. The Secretarial AuditReport for the year 2017-18 does not contain any qualification reservation or adverseremark.

Further based on the recommendation of the Audit Committee the Boardhas re-appointed M/s. S. Anantha & Ved LLP Company Secretaries Mumbai (LLP IN:AAH-8229) as the Secretarial Auditors of the Company for the Financial Year 2018-19 on May23 2018.

Internal Auditors

Pursuant to section 138 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 and based on the recommendation of the Audit Committee the Boardhad extended the existing term of M/s Genpact Enterprise Risk Consulting LLP (earlierknown as Axis Risk Consulting Services Private Limited) as the Internal Auditors of theCompany for the Financial Year 2017-18 on May 17 2017.

Further based on the recommendation of the Audit Committee the Boardhas extended the existing term of M/s Genpact Enterprise Risk Consulting LLP (earlierknown as ‘Axis Risk Consulting Services Private Limited) as the Internal Auditors ofthe Company for the Financial Year 2018-19 on May 23 2018.

The Internal Auditors present their its audit report before the AuditCommittee on a quarterly basis. The Audit Committee sets out the scope and timelines withrespect to the services rendered by the Internal Auditors as well as the fee payableagainst the same.

Cost Auditor

Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 and Notification issued by Ministry ofCorporate Affairs dated December 31 2014 on and from the Financial Year commencing April1 2014 the Companies in Education Sector are required to get their cost records audited.

Based on the recommendation of the Audit Committee the Board hadappointed M/s Sunny Chhabra & Co. Cost Accountants as the Cost Auditor of the Companyfor the Financial Year 2017-18 on May 17 2017.

Further based on the recommendation of the Audit Committee the Boardhas re-appointed M/s Sunny Chhabra & Co. Cost Accountants as the Cost Auditor of theCompany for the Financial Year 2018-19 on May 23 2018.

13. Directors and Key Managerial Personnel

Appointments & Resignations during the Financial Year 2017-18:

During the Financial Year 2017-18 following changes occurred in thecomposition of the Board of Directors and Key Managerial Personnel of the Company: a. Mr.Kamil Hasan (DIN: 03457252) Non-Executive Independent Director on the Board of theCompany resigned from the Board of the Company on and with effect from May 01 2017. b.Ms. Madhumita Ganguli (DIN: 00676830) was appointed as a Non-Executive IndependentDirector on the Board of the Company on and with effect from July 02 2017. c. Mr. PareshSurendra Thakker (DIN: 00120892) was appointed as a Non-Executive Independent Director onthe Board of the Company on and with effect from July 02 2017. d. Mr. Sudhir Bhargava wasappointed as the Chief Financial Officer and Key Managerial Personnel of the Company onand with effect from July 02 2017. e. The Designation of Mr. Nikhil Mahajan (DIN:00033404) was changed from Executive Director & CFO to Executive Director & GroupCEO Enterprise Business on and with effect from July 02 2017. f. Ms. Sangeeta Modi (DIN:03278272) Non-Executive Independent Director of the Company resigned from the Board ofthe Company on and with effect from July 03 2017. g. The Designation of Mr. GopalJain(DIN: 00032308) was changed from Non-Executive Nominee Director to Non- Executive NonIndependent Director on Board of the Company on and with effect from July 24 2017.

h. Mr. Safir Anand (DIN: 02117658) Non-Executive Independent Directorof the Company resigned from the Board of the Company and its Committees on and witheffect from February 07 2018. i. Mr. Sushil Kumar Roongta (DIN: 00309302) was appointedas an Additional (Non-Executive Independent) Director on the Board of the Company on andwith effect from March 13 2018.

The Directors place on record their appreciation of the valuablecontribution of Ms. Sangeeta Modi Mr. Kamil Hasan and Mr. Safir Anand as IndependentDirectors on the Board of the Company.

A separate resolution seeking members' approval to the appointmentof Mr. Sushil Kumar Roongta as a Non-Executive Independent Director on Board of theCompany not liable to retire by rotation has been incorporated in the notice of the 22ndAnnual General Meeting of the Company.

Retirement by Rotation:

Mr. Gautam Puri (DIN: 00033548) Vice Chairman & Managing Directorand Mr. Nikhil Mahajan (DIN: 00033404) Executive Director and Group CEO EnterpriseBusiness retires by rotation at the ensuing Annual General Meeting and being eligibleoffers themselves for re-appointment. A brief resume each of Mr. Gautam Puri and Mr.Nikhil Mahajan with other information under Regulation 36 of the SEBI (LODR) 2015 andSecretarial Standard-2 (SS-2) with respect to their proposed re-appointment has beenincorporated in the notice of the 22nd Annual General Meeting of the Company.Your Directors recommend their re-appointment.

Declaration by Independent Directors

Pursuant to sub-section (7) of Section 149 of the Companies Act 2013the Independent Directors of the Company have declared that they meet the criteria ofindependence in terms of Section 149(6) of the Companies Act 2013 and that there was nochange in their status as Independence Directors during the year. The Company received thedeclaration of Independence from all the Independent Directors of the Company and theBoard took note of the same in its Board Meeting held on April 30 2018.

Further details pertaining to Independent Directors form part of theCorporate Governance Report.

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

Separate Meetings of Independent Director

In terms of requirements of Schedule IV of the Companies Act 2013 theIndependent Directors of the Company met separately on August 24 2017 and November 212017 without the attendance of Non-Independent Directors or any other official of theCompany or members of its management to review the performance of Non-IndependentDirectors (including the Chairman) the entire Board and the quality quantity andtimeliness of the flow of information between the Management and the Board. The Companyreceived the Annual disclosure(s) from all the Directors disclosing their Directorship andInterest in other Companies in specified formats prescribed in Companies Act 2013 and theBoard took note of the same in its Board Meeting held on April 30 2018.

Details of Board (& Committee) Meetings held during Financial Year2017-18

The details pertaining to the Number of Board (& Committee)Meetings held during Financial Year 2017-18 form part of the Corporate Governance Report.

Annual Evaluation by the Board

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

During the year 2017-18 the Board of Directors carried out an annualevaluation of its own performance board committees and individual directors for the year2016-17 pursuant to the provisions of the Act and the corporate governance requirements.The performance of the Board as well as Committees was evaluated by the IndependentDirectors after seeking inputs from all the Non-Executive Directors on the basis ofcriteria such as the Board composition and structure effectiveness of board processesinformation and functioning etc.

The Board and the ‘Nomination Remuneration and Compensationcommittee' reviewed the performance of the individual directors on the basis of thecriteria such as the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc.

In addition the Chairman of the Company was also evaluated on the keyaspects of his role.

In a separate meeting of Independent Directors performance ofNon-Independent Directors performance of the Board as a whole and performance of theChairman was evaluated taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the board meeting that followed the meetingof the Independent Directors at which the performance of the board its committees andIndividual Directors was also discussed.

Performance evaluation of Independent Directors was done by the entireBoard excluding the Independent Director being evaluated.

Key Managerial Personnel

As on the date of this report the following persons have beendesignated as Key Managerial Personnel of the Company pursuant to Section 2(51) andSection 203 of the Act read with the Rules framed thereunder: a. Mr. Satya Narayanan .RChairman & Whole Time Director b. Mr. Gautam Puri Vice Chairman & ManagingDirector c. Mr. Nikhil Mahajan Executive Director and Group CEO Enterprise Business(change in designation from Executive Director & CFO with effect from July 02 2017.)d. Ms. Rachna Sharma Company Secretary and Compliance Officer e. Mr. Sudhir BhargavaChief Financial Officer (with effect from July 02 2017)

14.Corporate Governance

A Report on the Corporate Governance for the Financial Year 2017-18 asstipulated under SEBI (LODR) Regulations 2015 is presented in a separate section formingpart of this Annual Report.

15. Management Discussion & Analysis

Management's Discussion and Analysis Report for the Financial Year2017-18 as stipulated under Regulation 34 of SEBI (LODR) Regulations 2015 is presentedin a separate section forming part of this Annual Report.

16. Number of Meetings of the Board of Directors & Committeesthereof

The Board of Directors of the Company met 11 (Eleven) times during theyear under review. The details of the meetings of the Board including those of itsCommittees and Independent Directors' meetings are given in the Report on CorporateGovernance section forming part of this Annual Report.

17. Composition of Audit Committee

The Audit Committee of the Board of Directors of the Company is dulyconstituted in accordance with the provisions of Sections 177 (8) of the Companies Act2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers)Rules 2013 and Regulation 18 of SEBI (LODR) Regulations 2015. The details of thecomposition powers functions meetings of the Committee held during the year are givenin the Report on Corporate Governance section forming part of this Annual Report. All therecommendations of the Audit Committee during the year were accepted by the Board ofDirectors of the Company.

18. Vigil Mechanism / Whistle Blower Policy

Your Company has established a Vigil Mechanism/ Whistle Blower Policyin compliance with the provisions of section 177(9) and (10) of the Companies Act 2013and Regulation 22 of SEBI (LODR) 2015 to enable stakeholders (including DirectorsEmployees retainers franchisees) to report unethical behavior actual or suspected fraudor violation of the Company's Code of Conduct. The Policy provides adequatesafeguards against victimization of Director(s)/ employee(s) and direct access to theChairman of the Audit Committee in exceptional cases. The Protected Disclosures if anyreported under this Policy are to be appropriately and expeditiously investigated by theEthics Committee. Your Company hereby affirms that no Director/ employee has been deniedaccess to the Chairman of the Audit Committee and that no complaints were received duringthe year. The Vigil Mechanism/ Whistle Blower Policy is available on the website of theCompany (www.cleducate.com).

19. Corporate Social Responsibility

Pursuant to Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company hasconstituted a Corporate Social Responsibility Committee ("CSR Committee"). TheComposition and the terms of reference of the CSR Committee are provided in the Report onCorporate Governance section forming part of this Annual Report. The CSR Policy isavailable on the website of the Company (www.cleducate.com).

CSR Funds (Past & Present):

A table showing accumulated CSR Funds till date to be spent on CSRactivities by the Company is set out below:

Financial Year(s) CSR Funds to be Spent
2014-15 2.24
2015-16 14.52
2016-17 12.12
2017-18 17.43
Total 46.31

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

As part of CSR initiative your Company during the Financial Years2014-15 2015-16 2016-17 and 2017-18 has amongst other activities earmarked the fundsto be invested in the CSR activities/ projects. It intends to spend the said amount in thefollowing areas: (a) Driving research and innovation and funding technology incubatorslocated within academic institutions which are approved by the Central Government and/orto fund research education in universities.

(b) Training to promote rural sports nationally recognized sportsParalympics sports and Olympic Sports; and/or

(c) Protection of national heritage art and culture includingrestoration of buildings and sites of historical importance and works of art setting uppublic libraries promotion and development of traditional arts and handicrafts. Theseprojects are as prescribed under the Schedule VII of the Companies Act 2013.

(d) Promoting education including research education specialeducation and employment enhancing vocation skills especially among children womenelderly and the differently abled and livelihood enhancement projects.

CSR Spend

Though the Company has earmarked the funds for specific CSR activitiesand has determined target CSR activities/ projects in the education space and inresearch and Innovation area to be undertaken the Company has not been able to spend themandated amounts on the said activities till date as the capacities to spend thesanctioned amount were being built and are now broadly in place and specific projectshave been identified.

The implementation of the planned activities has thus spilled over tothe next Financial Year the execution of which is expected to be initiated in theFinancial Year 2018-19 and should happen over the coming multiple years .

As a socially responsible Company the Company is committed to increaseits CSR impact and spend over the coming years with the aim of playing a larger role inIndia's sustainable development and thereby fulfill its Corporate SocialResponsibility. The Annual report on CSR Activities is attached as Annexure- II.

20.Risk Management Policy

Your Company has a robust Risk Management policy. The Company througha steering committee oversees the Risk Management process including risk identificationimpact assessment effective implementation of mitigation plans and risk reporting. TheRisk Management Policy is available on the website of the Company (www.cleducate.com).

21. Directors' Nomination and Remuneration Policy

The process of determining the Remuneration of the Directors isinitiated with the general body of shareholders approving the overall maximum managerialremuneration that may be paid to the Directors generally over a period of 3 years. Withinthis overall limit the actual payout is decided by the Board on the specificrecommendation of the Nomination Remuneration and Compensation Committee (comprising ofall Non-Executive Directors with majority of them being independent) while also keepingthe provisions of Companies Act 2013 in mind.

The document evidencing the process of determination of remuneration ofDirectors i.e. the latest Recommendation Report issued by the Nomination Remunerationand Compensation Committee is attached as Annexure- III to this Report.

Details of the Remuneration Recommended by NRC Committee vis a vis theRemuneration actually paid to WTDs for the Financial Year 2017-18:

Fixed Compensation Variable Compensation Total Compensation
S. No. Whole Time Director Recommended Actually Paid Recommended Actually Paid Recommended Actually Paid
1 Mr. Satya Narayanan .R 81.90 58.46 41.00 Nil 122.90 58.46
2 Mr. Gautam Puri 81.90 57.96 41.00 Nil 122.90 57.96
3 Mr. Nikhil Mahajan1 79.70 51.44 39.70 Nil 119.40 51.44

1 * This includes an amount equivalent to 10000 AED per month whichis paid to Mr. Nikhil Mahajan from the Company's Dubai business operations. During2017-18 this amount has been paid to Mr. Nikhil Mahajan for 6 months only and the restshall be paid in financial year 2018-19.

Commission paid to Non-Executive Directors for 2017-18:

S. No. Non-Executive Independent Directors Commission Recommended (% of Net Profits) Amount to be Paid
1 Mr. Sridar Iyengar 0.25% of the net profits Nil
2 Mr. Safir Anand1 0.15% of the net profits Nil
3 Mr. Viraj Tyagi 0.15% of the net profits Nil
4 Mr. Paresh Surendra Thakker2 0.15% of the net profits Nil
5 Ms. Madumita Ganguli 0.15% of the net profits Nil

1 Mr. Safir Anand Non-Executive Independent Director of the Companyhas resigned from the Board of the Company on and with effect from Feb 07 2018.

2 Ms. Madhumita Ganguli & Mr. Paresh Surendra Thakker have beenappointed as Non-Executive Independent Directors on the Board of the Company on and witheffect from July 02 2017.

Notes:

• Mr. Sushil Kumar Roongta has been appointed as Additional(Non-Executive Independent) Director on the Board of the Company on and with effect fromMarch 13 2018.

• Mr. Kamil Hasan Non-Executive Independent Director of theCompany has resigned from the Board of the Company on and with effect from May 01 2017.

• Ms. Sangeeta Modi Non-Executive Independent Director of theCompany has resigned from the Board of the Company on and with effect from July 03 2017.

• In view of the losses incurred by the Company during thefinancial year 2017-18 Nil amount of commission is to be paid to Non-Executive Directorsof the Company pertaining to the financial year 2017-18.

22.Particulars of Employees

People are our most valuable asset and your Company places theengagement development and retention of talent as its highest priority to enableachievement of organizational vision.

In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the relevant information as on March 31 2018 is given in Annexure- IV. In terms of the provisions of Section 197(12) of the Companies Act 2013 readwith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016 the names of the top ten employees in terms ofremuneration drawn as on March 31 2018 along with the relevant information thereon isgiven in Annexure - V. Further during the Financial Year 2017-18 there was noemployee who: (i) if employed throughout the Financial Year was in receipt ofremuneration for that year which in the aggregate was not less than one crore and twolakh rupees; (ii) if employed for a part of the Financial Year was in receipt ofremuneration for any part of that year at a rate which in the aggregate was not lessthan eight Lacs and fifty thousand rupees per month; (iii) if employed throughout theFinancial Year or part thereof was in receipt of remuneration in that year which in theaggregate or as the case may be at a rate which in the aggregate is in excess of thatdrawn by the managing director or whole-time director or manager and holds by himself oralong with his spouse and dependent children not less than two percent of the equityshares of the Company.

23. Particulars of Loans Guarantees and Investments

Details of loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.

24. Particulars of Contracts or Arrangements with Related Parties

All transactions entered by the Company with Related Parties during theFinancial Year 2017-18 as defined under section 2 (76) of the Companies Act 2013 readwith the Companies (Specification of Definitions Details) Rules 2014 were in the OrdinaryCourse of Business and were at Arm's Length pricing basis and in accordance with theprovisions of the Companies Act 2013 Rules issued thereunder and Regulation 23 of SEBI(LODR) Regulations 2015. The Audit Committee granted omnibus approval for thetransactions (which were all routine and repetitive in nature) and the same was reviewedand approved by the Board of Directors. There were no materially significant transactionswith Related Parties during the Financial Year 2017-18 which were in conflict with theinterest of the Company. Suitable disclosures as required under IndAS-24 have been made inthe Notes to the financial statements.

Pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 in respect of the particulars of contracts orarrangements with related parties under section 188 in prescribed form AOC-2 is annexed asAnnexure-VI to this report.

The policy on Related Party Transactions as approved by the Board ishosted on the website of the Company (www.cleducate.com)

25. Extract of Annual Return

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

26. Details of the Amended and Restated CL ESOP Plan 2014 (Formerlyknown as CL ESOP Plan 2008)

During the financial year 2017-18 the Company's Employee StockOption plan 2014 was properly in place and in terms of the SEBI (Share Based EmployeeBenefits) Regulations 2014 as amended from time to time the Nomination Remuneration& Compensation Committee of the Board administered and monitored the Amended andRestated Career Launcher Employee Stock Options Plan 2014 ("CL ESOP Plan 2014"or "ESOP Scheme").

The Company did not make any grant under the CL ESOP Plan 2014 duringthe financial year 2017-18 and there was no material change made in the CL ESOP Plan 2014during the financial year 2017-18.

A certificate from M/s. Haribhakti & Co. LLP CharteredAccountants with regards to the implementation of the Company's Employee Stock OptionScheme in line with SEBI (Share Based Employees Benefits) Regulations 2014 would beplaced at the ensuing Annual General Meeting.

The details as required to be disclosed under Companies Act 2013 andSEBI (Share Based Employee Benefits) Regulations 2014 forms part of Annexure IX ofthe Directors' Report- "Disclosures and details of CL ESOP Plan 2014".

27. Disclosure of Energy conservation Technology Absorption &Foreign Exchange Earnings & Outgo

The Company does not carry any manufacturing activity thus disclosurerequirements under Section 134 (3) (m) of the Companies Act 2013 read with Rule 8 (3) ofthe Companies Accounts Rules 2014 are not applicable to the Company. However whereverpossible and feasible continuous efforts have been made for conservation of energy and tominimize energy cost and to upgrade the technology with a view to increase the efficiencyand to reduce cost of operations. During the year under review the Foreign Exchangeearnings and outgo are as follows:

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

Particulars FY 2018 FY 2017
Test preparation training services 228.74 275.84
Sale of study material 288.02 221.65
Total 516.76 497.45

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

Particulars FY 2018 FY 2017
Travelling and conveyance 9.41 6.20
Bank charges 7.77 5.52
Rent 106.93 54.94
Salary and wages 259.45 128.88
Faculty expenses 61.91 80.48
Others 380.11 553.35
Total 825.58 829.37

28. Transfer of unclaimed dividend to Investor Education and ProtectionFund

There is no amount which is required to be transferred to the InvestorEducation and Protection Fund (IEPF) as per the provisions of Section 125(2) of theCompanies Act 2013.

29. Buy Back of Securities

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

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

The Company complies with the mandatory Secretarial Standards issued byInstitute of Company Secretaries of India (ICSI).

31. Statement of Deviation(s) or Variation(s) if any in the ProjectedUtilization of Net Proceeds

Pursuant to Regulation 32(5) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Statement of Deviation(s) or Variation(s)if any in the Projected Utilization of Net Proceeds from the Initial Public offer (IPO) ofthe Company stating that there was no deviation in the use of proceeds from the objectsstated in the Offer Document. Neither was there any deviation between the actualexpenditure and the projected utilisation of funds made by it in its Offer Document asreviewed by the Board at its meeting dated May 23 2018 for financial year ended March 312018 is reproduced hereunder.

S. No. Particulars Projected utilization of Net proceeds Actual utilization of Funds till March 31 2018
1. Meeting working capital requirements of CL Educate and its subsidiaries namely Kestone Integrated Marketing Services Private Limited and GK Publications Private Limited 5250.00 4643.13
2. Repayment of loan taken by Career Launcher Infrastructure Private Limited(A step down subsidiary) from HDFC Bank Limited 1860.40 1860.40
3. Acquisitions and other strategic initiatives 2000.00 1835.11
4. General corporate purposes *1010.25 -
Total 10120.65 8338.64

*Post Finalization of IPO Expenses

The aforesaid statement as reviewed by the Audit Committee of theCompany is also available on the website of the Company (www.cleducate.com).

32. Directors' Responsibility Statement

To the best of our knowledge and belief and according to theinformation and explanations obtained by us your Directors make the following statementsin terms of Section 134(3)(c) of the Companies Act 2013: a) in the preparation of theAnnual Accounts for the year ended March 31 2018 the applicable accounting standardshave been followed along with proper explanation relating to material departures if any;b) the Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at end of Financial Year ended March 312018 and Loss of the Company for that period; c) the Directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) the Directors have prepared the AnnualFinancial Statements on a 'going concern' basis; e) the Directors have laid down internalfinancial controls to be followed by the Company and that such internal financial controlsare adequate and are operating efficiently; and f) the Directors have devised propersystems to ensure compliance with the provisions of all applicable laws and such systemsare adequate and operating effectively.

33. Acknowledgement

Your Directors take this opportunity to thank the Company'scustomers shareholders vendors and bankers for their support and look forward to theircontinued support in the future.

Your Directors also place on record their appreciation for theexcellent contribution made by all employees who are committed to strong work ethicsexcellence in performance and commendable teamwork and have thrived in a challengingenvironment.

For and on behalf of Board of Directors of CL Educate Limited
sd/- sd/-
Gautam Puri Nikhil Mahajan
Vice Chairman & MD Executive Director & Group CEO Enterprise Business
DIN: 00033548 DIN: 00033404
Address: R-90 Greater Kailash-I Address: House No. 457 Sector – 30
New Delhi – 110 048 Faridabad - 121 003 Haryana
Place: New Delhi
Date: July 06 2018

Annexures to Board's Report 2018

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

(Pursuant to first proviso to sub-section (3) of section 129 read withrule 5 of Companies (Accounts) Rules 2014) Statement containing salient features of thefinancial statement of subsidiaries/ associate companies/ joint ventures

PART "A": Subsidiaries1

S. No. Particulars 1

2

3 4 5 6 7 8
1 Name of the Subsidiary Kestone Integrated Marketing Services Private Limited

Kestone CL Asia Hub Pte. Ltd. Singapore2

G K Publications Private Limited CL Media Private Limited Accendere Knowledge Management Services Private Limited3 Career Launcher Education Infrastructure and Services Limited Career Launcher Infrastructure Private Limited4 ICE Gate Educational Institute Private Limited5
2 Financial Period Ended 31.03.2018

31.03 2018

31.03. 2018 31.03. 2018 31.03. 2018 31.03. 2018 31.03. 2018 31.03. 2018
3 Reporting Currency and Exchange Rate INR SGD INR INR INR INR INR INR INR
4 Share Capital (Nos. of Equity &Preference shares) (In No.) 1000000 514001 514001 190000 10000 12000 9447606 248468 10000
5 Reserves & 3179.22 (3.79) (185.50) (304.01) 4593.57 (53.12) 7497.88 1907.96 24.25
Surplus
6 Total Assets 7231.64 1.35 67.19 3746.55 6842.58 228.72 10522.59 4230.34 584.55
7 Total Liabilities 7231.64 1.35 67.19 3746.55 6842.58 228.72 10522.59 423034 584.55
8 Investments 255.07 - - - - - 7984.18 - -
9 Turnover 9815.48 14.46 694.80 1884.12 4084.07 227.81 138.72 81.83 661.47
10 Profit / (Loss) Before Taxation (PBT) 505.68 0.01 (10.08) (154.88) 820.34 34.57 (135.82) 27.08 4.11
11 Provisions for Taxation6 172.77 - - (21.75) 216.32 (1.21) 13.16 - 1.48
12 Profit/ Loss from Discontinued operations - - - - - - 12.81 2.47 -
13 Tax expenses of Discontinued operations - - - - - - - - -
14 Profit for the Year from discontinuing operations - - - - - - 12.81 2.47 -
15 Profit / (Loss) After Taxation (PAT) 332.91 0.01 (10.08) (133.13) 604.02 35.78 (136.17) 29.55 2.63
16 Dividend Nil Nil Nil Nil Nil Nil Nil Nil
17 % of share Holding 100%

100%

100% 100% 100% 100% 100% 50.70%

1 Kestone CL Asia has incorporated a wholly owned subsidiary in USA onMarch 22 2018 in the name of Kestone CL US Limited with an Authorised Share Capital of $1000. 2 Subsidiary of Kestone Integrated Marketing Services Private Limited.

3 Accendere Knowledge Management Services Private Limited became awholly owned subsidiary of the Company pursuant to the purchase of balance 49% i.e. 5880no. of equity shares of Accendere Knowledge Management Services Private Limited by theCompany on April 12 2017. 4 Wholly owned subsidiary of Career Launcher EducationInfrastructure & Services Limited.

5 Pursuant to the Share Purchase Cum Shareholders Agreement enteredinto amongst CL ICE GATE and its Promoters dated October 18 2017 CL acquired 50.7%stake (5070 equity shares) in ICE GATE.

6 Provision for taxation include total tax expense as recorded instatement of Profit & Loss account for the financial year 2017-18.

Notes:

1. Names of subsidiaries which are yet to commence operations : KestoneCL US Limited (incorporated on March 22 2018).

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

Part "B": Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act 2013related to Associate Companies and Joint Ventures

i. Threesixtyone Degree Minds Consulting Private Limited

NAME OF THE ASSOCIATES/JOINT VENTURES Threesixtyone Degree Minds Consulting Private Limited
1. Latest audited Balance Sheet Date March 31 2018
2. Shares of Associate / Joint Ventures held by the Company on the year end March 31 2018 March 31 2018
No. 909 Equity shares 400000 5% Compulsorily Convertible Preference Shares (CCPS)
Amount of Investment in Associate/Joint Venture Rs.4999500 Rs.40000000
Extend of Holding % 4.43% 76.92%
3. Description of how there is significant influence

361DM is an Associate Company of CL

Educate. CL has representation on the board of 361DM and it also participates in all significant financial and operating decisions.

4. Reason why the associate/joint Venture is not consolidated

Consolidated using Equity method of Accounting

5. Net worth attributable to Shareholding as per latest audited Balance Sheet

Rs.32.10 lacs

6. Profit / Loss for the year

Rs.54.97 lacs Total Loss for the year;

Rs.18.06 lacs Profit after the date of acquisition;

Rs.0.80 lacs Company's share in the profit of 361DM.

i. Considered in Consolidation

As above

ii. Not Considered in Consolidation

As above

ii. B & S Strategy Services Private Limited*

NAME OF THE ASSOCIATES/JOINT VENTURES B & S Strategy Services Private Limited;
1. Latest audited Balance Sheet Date March 31 2018
2. Shares of Associate / Joint Ventures held by the Company on the year end March 31 2018
No. 7526 Equity shares
Amount of Investment in Associate/Joint Venture Rs.459620652
Extend of Holding % 43.40%
3. Description of how there is significant influence The Company through its Wholly Owned Subsidiary Company Career Launcher Education Infrastructure and Services Limited (CLEIS) held 43.40% of the voting rights in B&S Strategy Services Private Limited ("B&S or Eduvisors") and pursuant to Shareholders Agreement dated March 16 2017 the Company had representation on the Board of B&S and participaton in all significant financial and operating decisions.
4. Reason why the associate/joint Venture is not consolidated Consilidation of associates has been carried out as per IndAS 110
5. Net worth attributable to Shareholding as per latest audited Balance Sheet Rs.2120.62 Lacs
6. Profit / Loss for the year Rs.16.90 lacs Loss for the year
Rs.13.81 lacs Profit after the date of acquisition
Rs.6.00 lacs Company's share in the profit
i. Considered in Consolidation Yes
ii. Not Considered in Consolidation NA

During the financial year 2017-18 the Company through its WhollyOwned Subsidiary Company Career Launcher Education Infrastructure and Services Limited(CLEIS) held 43.40% of the voting rights in B&S Strategy Services Private Limited("B&S or Eduvisors") and pursuant to Shareholders Agreement dated March 162017 the Company had representation on the Board of B&S and participation in allsignificant financial and operating decisions. Hence keeping in mind the Company'ssignificant influence over B&S as associate company of CLEIS the details of B&Sare being shared at the relevant places in this Annual Report.

Notes:

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

2. Names of associates or joint ventures which have been liquidated orsold during the year: None

For and on behalf of Board of Directors of
CL Educate Limited
sd/- sd/- sd/-
Gautam Puri Nikhil Mahajan Rachna Sharma
Vice Chairman & MD Executive Director & Group Company Secretary & Compliance Officer
DIN: 00033548 CEO Enterprise Business ICSI Membership
DIN: 00033404 No.:A17780
sd/-
Sudhir Bhargava
Chief Financial Officer
Place: New Delhi
Date : May 23 2018

Annexure III: Process of Determination of Director's Remuneration

The process of determining the Remuneration of Directors is as under:

1. The general body of shareholders approves the overall maximummanagerial remuneration that may be paid to the Directors generally over a period of 3years.

2. Within the overall limit approved by the shareholders theremuneration payable for a particular year is recommended by the Nomination Remunerationand Compensation Committee (comprising of all non-executive Directors with majority ofthem being independent) to the Board.

(a) The NRC Committee sets out the Key Considerations for setting thecompensation.

The Key Considerations taken into account by the NominationRemuneration and Compensation Committee while recommending the remuneration of Directorsare stated hereunder: i) The provisions of Companies Act 2013 and any other law for thetime being in force relating to Companies; ii) Market factors; iii) The executive andoperational responsibilities carried out by the Directors for the Company. iv) Marketsalary of people with similar background/educational qualification/ experience to ensurethat Directors receive a fair compensation and there is "headroom" to paycompetitive salaries to the Director's direct reports and for attracting new talentin the Company; v) Compensation trends for the last three years; vi) Inflation;

(b) The NRC Committee also recommends the split between fixed andvariable salaries payable to the Executive Directors of the Company while making specificrecommendation for any fiscal

3. Based on the recommendation of the NRC Committee the Board approvesthe remuneration payable to the Directors for the year;

4. The Remuneration paid during the year is checked against theestimated Profits of the Company for the year to comply with the relevant provisions ofthe Companies Act 2013 and the Rules made thereunder.

Extract of the Recommendation Report issued by the NRC committee forthe financial year 2017-18

The table below summarizes the total compensation for the whole timeDirectors (WTDs)

Table 1 Salary (actually paid) trends for the WTD Financial Year(s)2015-16 to 2017-18

Name of the Executive Director 2015-16 2016-17 2017-18
Fixed Variable Total Fixed Variable Total Fixed Variable Total
Satya Narayanan .R 68.10 Nil 68.10 69.83 Nil 69.83 57.96 Nil 58.46
Gautam Puri 68.10 Nil 68.10 69.83 Nil 69.83 58.61 Nil 57.96
Nikhil Mahajan 67.70 Nil 67.70 69.28 Nil 69.28 51.44 Nil 51.44

For the year 2017-18 the recommended compensation for Mr. SatyaNarayanan .R and Mr. Gautam Puri was Rs.122.9 Lacs (81.9 Lacs + 41.0 Lacs). It wasRs.119.4 Lacs (79.4 Lacs + 39.7 Lacs) for Mr. Nikhil Mahajan.

The Executive Directors of the Company did not take any variablecompensation for the year 2017-18.

Specific Recommendation for Fiscal 2017-18

Increase fixed and variable compensation by 9% each

Considering the inflation (CPI) in the year 2016 was 4.97%. Inaddition AON Hewitt report on compensation trends pegs average increase for TopManagement in service sector at 9% Keeping in mind above mentioned factors the committeerecommends a 9% increase in the total compensation for the Directors to be paid subjectto the compliance with the provisions of the Companies Act 2013:

Table 2 Recommended Salary for Executive Directors for 2017-18

Name of the Executive Director Fixed Compensation Variable Compensation Total Compensation
Satya Narayanan .R 81.90 41.00 122.90
Gautam Puri 81.90 41.00 122.90
Nikhil Mahajan 79.70 39.70 119.40

In view of the Committee the variable part of the compensation shouldbe paid based on the business performance of the Company with equal weight being ascribedto Revenue and Profitability.

Table 3 Recommended Commission for Non-Executive Independent Directorsfor the Financial Year 2017-18

Name of the Non-Executive Directors Commission Payable for 2017-18
Mr. Sridar Iyengar 0.25% of the net profits
Mr. Safir Anand1 0.15% of the net profits
Mr. Viraj Tyagi 0.15% of the net profits
Mr. Paresh Surendra Thakker 0.15% of the net profits
Ms. Madhumita Ganguli 0.15% of the net profits
Mr. Sushil Kumar Roongta2 0.15% of the net profits

1Mr. Safir Anand Non-Executive Independent Director of theCompany has resigned from the Board of the Company on and with effect from February 072018.

2Mr. Sushil Kumar Roongta has been appointed as Additional(Non-Executive Independent) Director on the Board of the Company on and with effect fromMarch 13 2018.

For and on behalf of Board of Directors of CL Educate Limited
sd/- sd/-
Gautam Puri Nikhil Mahajan
Vice Chairman & MD Executive Director & Group
DIN: 00033548 CEO Enterprise Business
Address: R-90 Greater Kailash-I DIN: 00033404
New Delhi – 110 048 Address: House No. 457
Faridabad - 121 003 Haryana
Place: New Delhi
Date : July 06 2018

Annexure IV: Particulars of Employees

Particulars of Employees and Related disclosure

The information required under Section 197 of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given below:

1. The ratio of the remuneration/commission of each Director to themedian remuneration of the employees of the Company for the Financial Year 2017-18:

Name of the Directors Ratio to median remuneration
Non-Executive Directors
Mr. Sridar Iyengar NA
Mr. Viraj Tyagi NA
Mr. Gopal Jain1 NA
Ms. Sangeeta Modi2 NA
Mr. Kamil Hasan3 NA
Mr. Paresh Surendra Thakker4 NA
Mr. Madumita Ganguli4 NA
Mr. Sushil Kumar Roongta5 NA
Mr. Safir Anand6 NA
Executive Directors
Mr. Satya Narayanan .R 28.80
Mr. Gautam Puri 28.55
Mr. Nikhil Mahajan 25.34

1The Designation of Mr. Gopal Jain* (DIN: 00032308) has beenchanged from Non-Executive Nominee Director to Non-Executive Non Independent Director onBoard of the Company on and with effect from July 24 2017. 2Ms. Sangeeta ModiNon-Executive Independent Director of the Company has resigned from the Board of theCompany on and with effect from July 03 2017. 3Mr. Kamil Hasan Non-ExecutiveIndependent Director of the Company has resigned from the Board of the Company on and witheffect from May 01 2017. 4Ms. Madhumita Ganguli & Mr. Paresh SurendraThakker have been appointed as Non-Executive Independent Directors on the Board of theCompany on and with effect from July 02 2017. 5Mr. Sushil Kumar Roongta hasbeen appointed as Additional (Non-Executive Independent) Director on the Board of theCompany on and with effect from March 13 2018. 6Mr. Safir Anand Non-ExecutiveIndependent Director of the Company has resigned from the Board of the Company on and witheffect from February 07 2018.

In view of the losses incurred by the Company during the financial year2017-18 Nil amount of commission is to be paid to Non-Executive Directors of the Companypertaining to the financial year 2017-18.

2. The percentage increase in remuneration of each DirectorChief Executive Officer Chief Financial Officer Company Secretary in the Financial Year2017-18:

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the Financial Year
Mr. Satya Narayanan .R Chairman & Executive Director (16.28%)
Mr. Gautam Puri Vice Chairman & Managing Director (17.00%)
Mr. Nikhil Mahajan Executive Director & Group (25.75%)
CEO Enterprise Business1
Mr. Sudhir Bhargava CFO2 NA
Ms. Rachna Sharma Company Secretary & Compliance Officer 21.59%

1 The Designation of Mr. Nikhil Mahajan has been changed from ExecutiveDirector & CFO to Executive Director & Group CEO Enterprise Business on and witheffect from July 02 2017. 2 Mr. Sudhir Bhargava has been appointed as CFO of the Companyon and with effect from July 02 2017.

3. The percentage increase/decrease in the median remuneration ofemployees in the Financial Year: There was an increase of (approx.) 17.76% inmedian remuneration of employees in the Financial Year 2017-18 as against increase of(approx.) 18.32% the previous financial year.

4. The number of permanent employees on the rolls of Company: TheCompany had 404 permanent employees as on March 31 2018 as against 318 as on March 312017. The new additions are on account of the acquisition of the ETEN business division ofPearson and the launch of a new Campus Recruitment Training division.

5. Average percentage increase already made in the salaries ofemployees other than the managerial personnel in the last Financial Year and itscomparison with the percentage increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration:

The average annual increase in the salaries of employees other than themanagerial personnel in the Financial Year 2017-18 was (approx.) 24.89% whilst themanagerial remuneration decreased by (approx.) 19.66%. The primary reason for the declinein managerial remuneration was on account of the whole time directors foregoing theirsalary for the Jan- March quarter of 2018 on account of not so healthy businessperformance and outcomes..

6. Affirmation that the remuneration is as per the remunerationpolicy of the Company: The Company affirms that the remuneration is as per theremuneration policy of the Company.

Note:

1. Managerial personnel includes only Managing Director &Whole-Time Directors of the Company.

Annexure V:

Remuneration to top ten employees pursuant to Section 197(12) of theCompanies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014

(a) Remuneration paid in Financial Year 2017-18 to Whole TimeDirectors:

S. No. Name of the Employee Designation Remuneration paid in Financial Year 2017-18 Nature of employment Educational Qualification Experience (in years) Date of Joining Age Previous employment Equity holding in the Company as on March 31 2018 Name of director or manager who is the relative of Employee
1 Satya Narayanan .R Chairman and Whole- Time Director 58.46 Whole Time Employee B.Sc (Computer Science) PGDM IIM (Bangalore) 20 25.04.1996 Since Incorporation 47 Marketing Executive Ranbaxy Laboratories Limited (1993- 95) 2262579 None
2 Gautam Puri Vice Chairman and Managing Director 57.96 Whole Time Employee B.E. (Chem.) PGDM IIM (Bangalore) 20 25.04.1996 Since Incorporation 53 Vam Organics Chemicals Limited 2262579 None
3 Nikhil Mahajan1 Executive Director & Group CEO Enterprise Business 51.44* Whole Time Employee B.Tech (Elect.) PGDM IIM (Bangalore) 19 28.12.1998 47 Executive Assistant Modipon Fibers Company (1996-98) 29817 None
4 Sudhir Bhargava2 President 49.48 Whole Time Employee MBA FMS DU B.E. (Mech) 23 27.06.2017 49 Info Edge (India) Ltd. 50 None
5 Sanjeev Srivastava President EBG 46.25 Whole Time Employee B.A. (Economics) DU MA Sociology 21 01.10.2010 57 Allahabad Bank Bank of Punjab The Times Bank and HDFC Bank Limited and Kotak Mahindra Bank 27532 None
6 Ajit Kumar President 40.29 Whole Time Employee B.Com Osmaniya University 16 07.04.2008 47 T.I.M.E. 1000 None
7 Sujit Bhattacharyya Chief Digital Officer 34.50 Whole Time Employee B.Tech (Elect.) IIT Kharagpur PGDM IIM (Bangalore) 16 01.04.2015 50 Wipro and Dharma Systems 203062 None
8 Arjun Wadhwa3 Vice President 34.21 Whole Time Employee PGPM (MDI) 16 12.04.2017 38 Goals for Souls 627 None
9 Himanshu Jain President 33.29 Whole Time Employee B.com DU 23 28.09.2011 45 KarROX Technologies Ltd iProf Learning Solutions India Ltd Sri Sidharth Industries and STG International Ltd 596 None
10 Byomkesh Kumar4 Vice President 31.99 Whole Time Employee PGDM IIM (Kozhikode) 11 16.06.2017 39 WizIQ Just eat SYNOPSYS Mentor Graphics Reliance Infocom Nil None

2 Mr. Sudhir Bhargava was appointed as the Chief FinancialOfficer and Key Managerial Personnel of the Company on and with effect from July 02 2017.

Annexure VI: AOC – 2 Contracts/ Arrangements with Related Parties

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Actand Rule 8(2) of the Companies (Accounts) Rules 2014.

Form for Disclosure of particulars of contracts/arrangements enteredinto by the company with related parties referred to in sub section (1) of section 188 ofthe Companies Act 2013 including certain arm's length transaction under thirdproviso thereto.

1. Details of contracts or arrangements or transactions not atArm's length basis:-There were no contracts or arrangements or transactionsentered into by the Company with any of its Related Parties during the financial yearended March 31 2018 which were not at arm's length basis.

2. Details of contracts or arrangements or transactions atArm's length basis.- The details of material contracts or arrangements ortransactions at arm's length basis for the financial year ended March 31 2018 are asfollows:-

Name(s) of the related party and nature of relationship Nature of Con- tracts/ arrange- ment/ transactions Duration of the contracts / ar- rangements/ transactions Salient terms of the con- tracts or arrangements or transactions including the value if any Date(s) of ap- proval by the Board of CL Educate Ltd. Amount paid as advance (if any) Cumulative Amount of Transaction During the Financial Year ended 31.03.2018
CL & CL Media Private Limited (CLM) Wholly owned Subsidiary Content Development by CLM for CL and monetization of academic Assets These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. CL to license its entre content and to allow CLM to monetize it. CL charge Certain % of the revenue as revenue share from CLM on account of licensing of IPR CL to pay Rs.25 Lacs p.a. for the projects running at Chhattisgarh Jharkhand MP UP Gujarat & Odisha respectively for the content management/ upgradation.

17.05.2017 and 24.08.2017

Nil

240.00

CL & CL Media Private Limited Wholly owned Subsidiary Material Purchase and Sale. Sale of books by CL Media to CL These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. CLM to publish all the course books for CL and to sell to CL at ‘an upto 65% discount to the MRP' as is a standard industry practice. This also enables CLM to take significant benefit of the tax exemption of its unit in Uttarakhand 17.05.2017 Nil 1024.11
CL & Ms. Sapna Puri Wife of Mr. Gautam Puri Vice Chairman & Managing Director Payment of Remuneration Contract not expiring in 2017-18 Remuneration is equivalent to people with similar background and similar experience. 17.05.2017 Nil Rs4.49
CL & GK Publications Private Limited (GKP) Wholly owned Subsidiary Material Purchase and Sale. Sale of books by GKP to CL. These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. CL purchases some books directly from GKP and provides these as additional support for its students. These books are purchased at 15-40% discount to the MRP which are more or less the same terms at which GKP sells to outside distributors or dealers 17.05.2017 Nil 53.85
CL Media Private Limited (CLM) – Mr. R Sreenivasan Brother of Mr. Satya Narayanan .R Chairman and Executive Director Payment of Salary Employment Contract (Appointment Letter dated 01.04.2014) Salary is equivalent to people with similar background and similar experience 17.05.2017 Nil 34.00
CL Media Private Limited (CLM) & GK Publications Private Limited (GKP) Group entities Material Purchase These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. CLM publishes all the course books for GKP and sells to GKP at a 60% discount to the MRP as is a standard industry practice. This also enables CLM to take significant benefit of the tax exemption of its unit in Uttarakhand. 17.05.2017 Nil 1416.00
CL Media Private Limited (CLM) - Mr. R Shiva Kumar Brother in law of Mr. Satya Narayanan .R Chairman and Executive Director Salary Appointed as Whole time Director for period of 3 years i.e. from 01.04.2015 to 31.03.2018 Salary is equivalent to people with similar background and similar experience. 17.05.2017 Nil 35.00
CL & Kestone Integrated Marketing Services Private Limited (Kestone) Wholly owned Subsidiary Infrastructure servicing/ Leasing by Kestone for some of CL center's These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. For All Government projects in which purchase of fixed assets is prohibited by the Government CL leases the same from Kestone. Before the start of the project CL had called for 3 quotations and Kestone was closed at the lowest quotation point including some manpower cost allocation. 17.05.2017 Nil Nil
CL& Career Launcher Education Infrastructure and Services Limited (CLEIS) Wholly owned Subsidiary Cost Sharing for shared infrastructure and various common administrative expenses by CLEIS These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. The infrastructure at Corporate office is co- shared with CLEIS and since is owned by CL it was agreed that CLEIS will pay an amount proportionate to the usage by it. It includes the operating running and electricity cost for an area of approximately 1650 Sqft including some manpower cost allocation 17.05.2017 Nil Nil
Career Launcher Infrastructure Private Limited (CLIP) & Nalanda Foundation Leasing out of infrastructure facilities for Indus World Schools. CLIP has given infrastructure to Nalanda Foundation for running the schools. In return NF pays a certain % of revenue to CLIP and this % Is almost similar or in range to what NF pays to outside infrastructure providers. Additionally NF pays CLIP interest at 5 BP higher than the rate CLIP has borrowed money from lenders for amounts outstanding. 17.05.2017 Nil 282.00
CL & 361Degree Mind Consulting (361 DM) Associate Company License rights of Software These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. CL holds sub 10% equity in 361 DM directly and through its Chairman and VC. CL has jointly developed products with 361 DM the IP of which belongs to each ones contribution respectively. Since the product runs of 361 DM platform CL pays on a per license basis to 361 DM at a rate which has been commercially agreed between CL and 361 DM. 17.05.2017 Nil 51.58
CL & Anand & Anand Law Firm Mr. Safir Anand is a partner in M/s Anand & Anand Most of the Intellectual Property related legal matters of CL are handled by M/s Anand & Anand Most of the Intellectual Property related legal matters of CL are handled by M/s Anand & Anand Not a Related party transaction since the transaction between CL and M/s Anand & Anand does not exceed 2% or 50 Lacs whichever is higher. 17.05.2017 Nil 12.30
CL & CL Media Private Limited (CLM) Wholly owned Subsidiary Cost Sharing for shared infrastructure and various common administrative expenses by CL Media These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. The infrastructure at Corporate office is co- shared with CL Media and it has been agreed that CL Media will pay an amount proportionate to the usage by it. It includes the operating running and electricity cost for an area of approximately 4300 Sq ft. including some manpower cost allocation. 17.05.2017 Nil 60.00
Accendere Knowledge Management Services Pvt. Ltd. (AKMS) & CL Media Private Limited (CLM) Group entities Research related Services rendered to/by CL Media These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2016-17. Service rendered by CLM 17.05.2017 Nil Nil
Service rendered to CLM 17.05.2017 Nil 277.59
CL & CL Media Private Limited (CLM) Wholly owned Subsidiary Allocation of Manpower Cost in relation to shared staff (Support) These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. CL Educate and CL Media have entered into an arrangement whereby an appropriate portion of the salaries of certain support staff based broadly on their respective contribution to CL Media is allocated / debited to CL Media. 17.05.2017 Nil 124.00
CL & Kestone Integrated Marketing Services Private Limited (Kestone) Wholly owned Subsidiary Allocation of Manpower Cost in relation to shared staff (Support) These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. CL Educate and Kestone have entered into an arrangement whereby an appropriate portion of the salaries of certain support staff based broadly on their respective contribution to Kestone is allocated / debited to Kestone 17.05.2017 Nil 199.00
CL & Bilakes Consulting Private Limited (Bilakes) Corporate Promoter of the Company Bilakes has agreed to provide certain business (consultancy) services to CL over the next 24 months. The maximum amount CL can pay under this arrangement is Rs. 125 Lacs of which about Rs.95 Lacs has been paid as business advance during the year 2015-16. Business (consultancy) services to CL 17.05.2017 Nil Nil
CL & GK Publications Private Limited (GKP) Wholly owned Subsidiary Cost Sharing for shared infrastructure and various common administrative expenses by GKP These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. The infrastructure at registered office is co- shared with GKP and since the infrastructure is owned by CL it has been agreed that GKP will pay an amount proportionate to the usage by it. It includes the operating running electricity costs etc. 29.05.2017 Nil 24.00
CL & Accendere Knowledge Management Services Pvt. Ltd. (AKMS) Wholly owned Subsidiary Cost Sharing for shared infrastructure and various common administrative expenses by AKMS These are routine and Regular Intra- Group Transactions which are carried out on a continuing Basis. The contracts are also renewed accordingly. This particular contract was active throughout 2017-18. The infrastructure at registered office is co- shared with AKMS and since is owned by CL it was agreed that AKMS will pay an amount proportionate to the usage by it. It includes the operating running electricity costs etc. 24.08.2017 Nil Nil
CL & Alma Connect Solutions Private Limited Related Party as per Section 2(76) of the Companies Act 2013 Expenses for developing admission related digital product The digital product which the Company is proposing to develop is based on CL's requirements. CL has negotiated with vendor and believes that the cost of the transaction seems prudent basis assumptions of quality of manpower and time. 13.10.2017 and 21.11.2017 Nil 20.00
CL & Kestone Integrated Marketing Services Private Limited Kestone executed and managed ‘MeltingPot2020 Innovation Summit' an event of CL Kestone has charged CL with the Actual cost incurred + 10% markup which it charges to its other customers/clients. 02.02.2018 Nil 112.69
(Kestone) Wholly owned Subsidiary Kestone executed and managed ‘InQuizitive Minds' a country-wide Quiz contest for CL Kestone has charged CL with the Actual cost incurred + 10% markup which it charges to its other customers/clients 02.02.2018 Nil 118.39
Website of WAIN (Worldwide Academia Industry Network) an online platform for research & Innovation designed & developed by Kestone for CL Quotations received from some parties. Kestone with the lowest amongst them was assigned the project. 02.02.2018 Nil 22.50
Kestone Integrated Marketing Services Private Limited (Kestone) & CL Media Private Limited (CLM) Wholly owned Subsidiary Kestone has designed & developed the website of CLM Quotations received from some parties. Kestone with the lowest amongst them was assigned the project. 02.02.2018 Nil 17.50

 

For and on behalf of Board of
Directors of CL Educate Limited
sd/- sd/-
Gautam Puri Nikhil Mahajan
Vice Chairman & MD Executive Director & Group CEO Enterprise Business
DIN: 00033548 DIN: 00033404
Address: R-90 Greater Kailash-I Address: House No. 457 Sector – 30
New Delhi – 110 048 Faridabad - 121 003 Haryana
Place: New Delhi
Date: July 06 2018