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EQUITY - MARKET SCREENER

CL Educate Ltd
Industry :  Miscellaneous
BSE Code
ISIN Demat
Book Value()
540403
INE201M01029
94.2121083
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
CLEDUCATE
36.49
339.13
EPS(TTM)
Face Value()
Div & Yield %
3.28
5
0
 

As on: May 26, 2022 04:02 AM

Dear Member(s),

The Board of Directors of your Company takes pleasure in presenting the Twenty Fifth Board Report on the business and operations of CL Educate Limited (hereinafter referred to as the "Company" or "CL") together with the Company's Audited Standalone & Consolidated Financial Statements and the Independent Auditor's Report thereon for the Financial Year ended March 31, 2021.

1. Financial Summary and Highlights

(Rs in Lakhs)

S Particulars Standalone Consolidated
No. FY 2021 FY 2020 FY 2021 FY 2020
I Revenue from operations 9,986.49 16,334.73 18,449.94 30,868.33
II Other income 837.50 1,234.38 959.67 1,529.70
III Total Income (I+II) 10,823.99 17,569.11 19,409.61 32,398.03
IV Expenses
a) Cost of material consumed - - 269.17 941.34
b) Purchase of stock in trade 444.33 1,095.31 18.82 81.06
c) Changes in inventories of finished goods, stock-in trade and work in progress 75.29 (56.76) 30.54 (557.26)
d) Employee benefits expenses 1,738.85 2,203.60 3,963.97 5,303.93
e) Franchisee expenses 3,383.42 6,633.30 3,574.51 7,142.51
f) Other expenses 4,829.33 7,186.17 11,629.22 18,616.91
V Total Operating Expenses 10,471.21 17,061.62 19,486.22 31,528.49
EBITDA (III-V) 352.76 507.49 (76.62) 869.54
g) Finance costs 369.94 528.24 563.11 830.96
h) Depreciation and amortization expenses 608.18 1,112.72 835.17 1,401.50
VI Total Expenses 11,449.34 18.702.58 20,884.51 33.760.95
VII Profit / (Loss) Before Tax (III - VI) (625.35) (1,133.47) (1,474.90) (1,362.92)
VIII Exceptional Items - 4,150.05 - 4,150.05
IX Profit / (Loss) Before Tax after Exceptional Items (VII+VIII) (625.35) (5,283.52) (1,474.90) (5,512.97)
X Share of net profit of associates accounted - - (4.94) (14.71)
XI Profit / (Loss) Before Tax from Continuing Operations (IX+X) (625.35) (5,283.52) (1,479.84) (5,527.68)
XII Tax Expenses (112.55) 33.83 (281.57) (102.96)
XIII Profit / (Loss) After Tax from Continuing Operations (512.80) (5,317.35) (1,198.27) (5,424.71)
XIV Profit Before Tax from Discontinuing Operations - - 16.23 118.92
XV Tax Expenses for Discontinuing Operations - - - -
XVI Net Profit / (Loss) for the Period (XIII+XIV-XV) (512.80) (5,317.35) (1,182.04) (5,305.79)
XVII Other Comprehensive Income 3.22 6.50 44.03 42.89
XVIII Total Comprehensive Income for the Period (XVI + XVII) (509.58) (5,310.85) (1,138.01) (5,262.90)
XIX Earnings per Equity Share - Continued Operations
Basic (3.62) (37.54) (8.46) (38.29)
Diluted (3.62) (37.54) (8.46) (38.29)

2. Review of Market, Business and Operations

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

3. Segment Reporting & Operational Overview

Standalone:

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

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

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

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

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

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

(Rs in Lakhs)

FY 2021 % of Total FY 2020 % of Total
Partner 5,432.73 54.4% 10,396.55 63.6%
Digital 4,553.76 45.6% 5,938.18 36.4%
Vocational - 0.0% - 0.0%
Total 9,986.49 100.0% 16,334.73 100.0%

Our revenue from Partner segment decreased by 47.7%—from Rs 10,396.55 in FY 2020 to Rs 5,432.73 in FY 2021, while the Digital segment decreased by 23.3%-from Rs 5,938.18 in FY 2020 to Rs 4,533.76 in FY 2021; due to what was practically a year-long lockdown on all physical businesses run by the company due to the COVID-19 pandemic.

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

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

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

(Rs in Lakhs)

FY 2021 % of Total FY 2020 % of Total
Within India 9,406.64 94.2% 15,515.82 95.0%
Overseas 579.85 5.8% 818.91 5.0%
Total 9,989.49 100.0% 16,334.73 100.0%

Consolidated:

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

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

1. Consumer Business

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

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

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

2. Enterprise Business

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

i. Experiential Marketing and Event Management

ii. Digital & MarComm Services

iii. Customized Engagement Programs (CEPs)

iv. Manpower Management & Training

v. Strategic Business Solutions

b. Enterprise Institutional - The Company provides the following services to institutional clients under the brand ‘CL Media Pvt. Ltd' and ‘Accendere Knowledge Management Services Pvt. Ltd'

i. Integrated Solutions to Universities

ii. Student Enrollment Services

iii. Research & Incubation Services

iv. Career Development Center

3. Others

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

FY 2021 % of Total FY 2020 % of Total
Partner 5,432.73 29.5% 10,396.55 33.6%
Digital 5,009.07 27.1% 7,062.03 22.9%
Consumer Publishing (399.66) -2.2% (156.28) -0.5%
Enterprise Corporate 7,562.10 41.0% 11,535.06 37.4%
Enterprise Institutional 845.70 4.6% 2001.78 6.5%
Others - 29.19 0.1%
Total 18,449.94 100.0% 30,868.33 100.0%

Our Revenue from Operations on a consolidated basis decreased by 40.2%—from Rs 30,868.33 lakh in FY 2020 to Rs 18,449.94 lakh in FY 2021; due to the impact of COVID-19. The management has estimated the following loss of business due to the global pandemic:

(i) Partner: The Partner business saw a decline of 47.7% — from Rs 10,396.55 lakh, in FY 2020 to Rs 5,432.73 lakh in FY 2021. The Company has recorded nearly 53% decline—from 44,099 paid enrollments in FY 2020 to 20,696 paid enrollments in FY 2021. The decline was prevalent across product categories due to physical study centers being shut for most of the year.

(ii) Digital: The Digital business saw a decline of 29.1%—from Rs 7,062.03 lakh, in FY 2020 to Rs 5,009.07 lakh in FY 2021. Our non-partner business for FYRs 20 includes physical centers which were Company Owned and Company Operated, that were fully functional for at least 11 months of the year, therefore on a comparative basis the revenues predictably witnessed the aforementioned decline. However, in terms of paid enrolments in FY21 the numbers were 85,132 against 71,692 in FY20 which is about 19% higher. Given the shift in consumer behavior on account of the pandemic, the organization did a fantastic job of increasing market share despite the shift away from physical classes in key markets.

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

(iv) Enterprise Corporate: The revenue from Enterprise Corporate (operating under the Kestone brand) witnessed a decline of 34.4%—from Rs 11,535.06 lakh in FY 2020 to Rs 7,562.10 lakh in FY 2021. The impact of COVID-19 was felt massively in this business segment resulting in the better part of a Rs 50-60 Cr physical events business being wiped out overnight by the pandemic. Due to the lockdown and social distancing norms in India and abroad, this line of business was completely impossible in FY 2021. The Company was quick to respond to the new challenges posed by COVID; and has successfully shifted its mode of business to online servicing by introducing a Virtual Events Platform (VEP) whose production and implementation was accelerated considerably on account of the pandemic. The platform, which was developed inhouse, has been globally recognized amongst the best in the world, and was used for more than 200 events in FY 2021.

(v) Enterprise Institutional: The revenue from this segment also witnessed decline of 57.8%—from Rs 2,001.78 lakh in FY 2020 to Rs 845.70 lakh in FY 2021 - due to the pandemic. With universities and colleges operating remotely, and their cash inflows reduced drastically due to the prevalent UGC norms, most institutions were significantly cash strapped and didn't spend the usual amount on either customer acquisition or on research.

(Rs in Lakhs)

FY 2021 % of Total FY 2020 % of Total
Within India 17,168.84 93.1% 28,480.59 92.3%
Overseas 1,281.10 6.9% 2,387.74 7.7%
Total 18,449.94 100.0% 30,868.33 100.0%

4. Change in the nature of business, if any

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

5. Scheme of Amalgamation

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

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

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

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

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

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

On August 12, 2020, the Company filed an application for early hearing of its 2nd Motion Petition with the Hon'ble NCLT Chandigarh Bench. The NCLT Bench heard this application on October 27, 2020 and passed an Order which was pronounced on November 25, 2020 in which the Companies were directed to issue notices to the regulatory authorities and publish the same in two newspapers. Further, the Scheme was listed for hearing on January 28, 2021. As per the directions contained in the Order, the notices were issued and advertisements were published by the Companies and Affidavits to this extent were filed with the NCLT Bench.

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

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

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

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

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

Kestone provides services including event management, marketing support (including digital marketing support in the form of online marketing initiatives), customer engagement (including audience generation, lead generation, loyalty and reward programs and contest management), managed manpower and training services.

The total income of Kestone was Rs 7,628.66 lakh in FY 2021, as against Rs 10,915.74 lakh in FY 2020, recording a decrease by 30.1% over the previous Financial Year. The decrease is mainly attributed to the spread of global pandemic during the last year of the FY 2021. The management estimates- Rs 40-50 crore of loss of business due to COVID-19.

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

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

The total income of Kestone CL Asia Hub Pte. Ltd. decreased by 9.9 % to Rs 1,252.00 lakh in FY 2021 from Rs 1,385.93 lakh in FY 2020 due to COVID.

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

Kestone CL Asia has incorporated a wholly owned subsidiary in USA on March 22, 2018, by the name of Kestone CL US Limited, with an objective to provide integrated sales & marketing services to corporate & institutions in the Americas, especially USA. During the year, Kestone CL US had a total income of US$ 402,900 .

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

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

ii. CL Media Private Limited (CL Media)

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

The total income from CL Media was Rs 1,374.42 lakh in FY 2021, as compared to Rs 3,828.42 lakh in FY 2020. The significant decrease in the business of CL Media is on two accounts, firstly due to the decision to cease the publishing business that used to run in this entity and move those operations to another wholly owned subsidiary of CL Educate - CLIP. This happened with effect from 1st April 2021 and hence there is no material impact of this shift at a Consolidated level for the company. Secondly, due to the COVID-19 pandemic, a large number of CL Media's clients had to deal with changing examination cycles / academic calendars, lower fees collection due to non-campus based education, and a decline in student admission. This has had a cascading effect on CL Media's business operations, resulting in a dip in revenues.

CL Media has responded to the challenge by reworking its services offerings and adapting to the digital world by changing its digital inventory to continue to remain competitive in these times.

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

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

The total income of GK Publications decreased by 89.5%—to Rs 40.35 lakh in FY 2021 from Rs 385.91 lakh in FY 2020. A more accurate depiction of business performance though can be ascertained by comparing the gross sales in the two aforementioned years which stood at Rs 1,154.31 Lakh (FY 2021) as against Rs 2,026.38 Lakhs (FY 2020) .

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

iv. Accendere Knowledge Management Services Private Limited (AKMS)

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

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

Incorporated on June 16, 2005, CLEIS is a wholly owned subsidiary of the Company as on date. Engaged in the business of providing various infrastructure facilities, soft skills, educational and consulting programs, the business of CLEIS has since been transferred, details of which are given below:

Pursuant to a Business Transfer Agreement dated March 16, 2017, amended on July 18, 2017, executed amongst CLEIS and B&S Strategy Services Private Limited, with CL as a confirming party, the business of running and operating pre-schools and providing school management services carried on by CLEIS has since been sold.

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

CLIP, a wholly owned subsidiary of CLEIS, and hence a stepdown subsidiary of CL, was incorporated on February 20, 2008. CLIP's lines of business include providing infrastructure facilities for K-12 schools, printing and publishing of education content in the form of books, tests, analyses, etc. and printing competitive books and Test Preparation material.

The total income of CLIP increased to Rs. 1,040.11 Lakhs in FY 2021 from Rs 6,559.00 Lakhs in FY 2020. This was mainly due to publishing business which was shifted at the beginning of the year from CL Media Pvt Ltd. to CLIP.

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

ICE GATE was incorporated under the Companies Act, 2013 on August 12, 2015. ICE GATE is engaged in the business of providing education for students preparing for Graduate Aptitude Test in Engineering (GATE) and related exams. Pursuant to the Share Purchase cum Shareholders Agreement entered into amongst CL, ICE GATE and its Promoters dated October 18, 2017, CL acquired a 50.70% stake (5070 equity shares) in ICE GATE. ICE GATE became a subsidiary of the Company with effect from October 31, 2017. As on March 31, 2021, CL Educate Limited had increased its shareholding to 58.95% in ICE GATE.

The total income of ICE GATE decreased by 65.2% to Rs 466.68 lakh in FY 2021 from Rs 1,339.26 lakh in FY 2020.

vii. Career Launcher Foundation (CLF), Section 8 Company

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

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

viii. Career Launcher Private Limited (CLPL)

CLPL was incorporated on March 15, 2021 under the Companies Act, 2013 as a wholly owned subsidiary of CL with the objective of becoming the digital arm of the Career Launcher brand. Subject to the approval of the shareholders by way of a Special Resolution, it is proposed to transfer the existing Digital Business of CL Educate Limited to CLPL to give it an opportunity to chart its own journey towards becoming a premier brand in the EdTech space.

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

361DM, incorporated under the Companies Act, 1956 on July 06, 2006, delivers large scale yet effective learning and education solutions to individuals, organizations and educational institutions. Pursuant to the Investment cum Shareholders Agreement dated August 03, 2017 entered into amongst the Company, 361DM and its Promoters, the Company holds 500,000, 5% Compulsorily Convertible Preference Shares of 361DM of INR 10 each issued at a premium of INR 90/- per share. The Company also holds 909 Equity shares of 361DM aggregating to 4.41% of paid-up equity share capital of 361DM.

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

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

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

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

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

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

Shareholding in Subsidiary Companies

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

a. 10,00,000 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity Share Capital in Kestone Integrated Marketing Services Private Limited;

b. 1,90,000 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity Share Capital in G. K. Publications Private Limited;

c. 10,000 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity Share Capital in CL Media Private Limited;

d. 12,000 Equity shares of Face Value of Rs 10/- each comprising of 100% Equity Share Capital in Accendere Knowledge Management Services Private Limited;

e. 94,47,606 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity Share Capital in Career Launcher Education Infrastructure and Services Limited;

f. 5,895 Equity Shares of Face Value of Rs 10/- each comprising of 58.95% Equity Share Capital in ICE GATE Educational Institute Private Limited;

g. 5,000 Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity Share Capital in Career Launcher Foundation (Section 8 Company); and

h. 10,0001, Equity Shares of Face Value of Rs 10/- each comprising of 100% Equity Share Capital in Career Launcher Private Limited.

As on date of this report, the Company's shareholding in the Equity Share Capital of Career Launcher Private Limited is comprising of 1,00,000, Equity Shares of Face Value of Rs 1/- each constituting 100% of Equity Share Capital.

Shareholding in Associate Companies

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

a. 5,00,000, 5% Convertible Preference Shares of Face Value of Rs 10 each comprising of 78.62% of Preference Share Capital in Threesixtyone Degree Minds Consulting Private Limited; and

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

7. Corporate Governance

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

8. Management Discussion & Analysis

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

9. Dividend

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

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

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

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

11. Transfer to Reserves

In view of the losses incurred by the Company during the Financial Year 2020-21, no amount has been transferred to reserves during this Year.

12. Capital and Finance

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

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

13. Material changes and commitments

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

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

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

14. Material and Significant Orders Passed by Regulators & Courts

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

15. Internal Financial Control Systems

The Company has aligned its current system of Internal Financial Controls with the requirements of the Companies Act, 2013. The Internal Control Systems are intended to increase transparency and accountability in an organisation's process of designing and implementing a system of internal control. The framework requires a company to identify and analyse risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness. The Company's internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. CL has a well-defined delegation of power with authority limits for approving revenues as well as expenditures. Processes for formulating and reviewing annual and long-term business plans have been laid down. CL uses a state-of-the-art enterprise resource planning (ERP) system to record data for accounting, consolidation and management information purposes and connects to different locations for efficient exchange of information. It has continued its efforts to align all its processes and controls with best practices.

Your management assessed the effectiveness of the Company's internal controls over financial reporting as of March 31, 2021. The assessment involved management review, internal audit and statutory audit.

The Internal Controls over Financial Reporting are routinely tested and reported by Statutory as well as Internal Auditors, in a process that involves a review of the internal controls and risks in its operations and processes such as IT and general controls, accounting and finance, procurement, employee engagement, etc.

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

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

16. Public Deposits

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

17. Auditors and Auditors' Report

Statutory Auditors

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

Fees paid/payable to Statutory Auditors

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

(Rs in Lakhs)

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

Statutory Auditor's Report

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

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

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

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

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

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

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

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

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (LODR) Regulations, 2015, based on the recommendation of the Audit Committee, your Directors have appointed M/s. S. Anantha & Ved LLP, Company Secretaries, Mumbai (LLP IN: AAH- 8229) as the Secretarial Auditor of the Company for the Financial Year 2021-22.The Secretarial Audit Report for the Financial Year 2020-21 issued by the Secretarial Auditor does not contain any qualification, reservation, observation or adverse remark.

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

Secretarial Audit of Material Unlisted Subsidiaries:

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

Internal Auditor

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

Cost Auditor

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

Based on the recommendation of the Audit Committee, your Directors have appointed M/s. Sunny Chhabra & Co., Cost Accountants, as the Cost Auditor of the Company for the Financial Year 2021-22. The Cost Audit Report 2020-21 issued by the Cost Auditor does not contain any qualification, observation or adverse remark. The same shall be placed before the members at the ensuing AGM.

The remuneration payable to the cost auditor is subject to ratification/approval by the members of the Company. Accordingly, a resolution seeking members' ratification/ approval for the remuneration payable to the Cost auditor is included in the Notice convening the 25th Annual General Meeting, along with the relevant details, including the proposed remuneration.

Reporting of fraud by Auditors

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

18. Directors and Key Managerial Personnel

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

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

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

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

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

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

c. Retirement by Rotation:

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

d. Proposed appointments at the ensuing AGM:

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

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

e. Declaration by Independent Directors

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

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

f. Separate Meeting of Independent Directors

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

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

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

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

g. Disclosure of Interest in other concerns:

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

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

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

The Board of Directors of the Company met 5 (Five) times during the Financial Year under review. The details of the meetings of the Board including those of its Committees and of the Independent Directors are given in the Report on the Corporate Governance forming part of this Annual Report.

i. Annual Evaluation by the Board

The Nomination, Remuneration and Compensation Committee (NRC Committee) and the Board has adopted a methodology for carrying out the performance evaluation of the Board, Committees, Independent Directors and Non- Independent Directors of the Company, which includes criteria, manner and process for performance evaluation. Criteria in this respect includes; the Board composition and structure, effectiveness of board processes, information and functioning, contribution of the individual director to the Board and Committee Meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

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

j. Key Managerial Personnel

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

i) Mr. Satya Narayanan R, Chairman & Executive Director,

ii) Mr. Gautam Puri, Vice Chairman & Managing Director,

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

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

v) Mr. Arjun Wadhwa, Chief Financial Officer.

19. Composition of the Audit Committee

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

20. Vigil Mechanism / Whistle Blower Policy

Your Company has established a Vigil Mechanism/ Whistle Blower Policy in compliance with the provisions of Section

177(9) and (10) of the Act, read with Rule 7 of the Companies (Meetings of the Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (LODR) Regulations, 2015 and Regulation 9A of SEBI (Prohibition of Insider Trading) Regulations 2015 to enable stakeholders (including Directors, Employees, retainers, franchisees etc.) to report unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or instances of leak of unpublished price sensitive information. The Policy provides for adequate safeguards against victimization of Director(s)/ employee(s) and provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if any, reported under this Policy are to be appropriately and expeditiously investigated by the Ethics Committee. Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that the complaints received during the Financial Year were promptly addressed and resolved, with appropriate action taken thereon. The Vigil Mechanism/ Whistle Blower Policy is available on the website of the Company at the web link www.cleducate.com/policies/Vigil_Mechanism_Policy_CLEducate.pdf

21. Corporate Social Responsibility

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

CSR Funds (Past & Present)

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

CSR Projects

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

CSR Spend 2020-21

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

During the Financial Year 2020-21, the Company incurred an excess CSR expenditure of Rs. 53.25 Lakhs, calculated as per the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Committee as well as the Board of Directors of the Company both approved the set-off of the excess amount spent during the Financial Year 2020-21 against the Company's CSR liability over the successive three financial years.

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

22. Directors' Nomination and Remuneration Policy

The Nomination Remuneration and Compensation Committee (NRC Committee) of the Company formulates the criteria for determining qualifications, positive attributes and independence of a director, and recommends to the Board the criteria for determining the remuneration for the Directors, key managerial personnel and/or other senior level employees of the Company.

The process of determining the Remuneration of the Directors is initiated with the general body of shareholders approving the overall maximum managerial remuneration that may be paid to the Directors, generally over a period of 3 years. Within this overall limit, the actual payout is decided by the Board, on the specific recommendation of the Nomination, Remuneration and Compensation Committee (comprising of all Non-Executive Directors, with majority of them being independent), while keeping the provisions of the Companies Act, 2013 in mind.

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

(Rs in Lakhs)

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

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

(Rs in Lakhs)

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

includes an amount equivalent to 1,08,000 AED that is the remuneration payable to Mr. Nikhil Mahajan out of Company's Dubai business operations for the Financial Year 2020-21.

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

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

 

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

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

Note:

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

Salient features of the process of determination of the Remuneration of Directors are mentioned below:

i. Approval of the Shareholders:

The general body of shareholders approves the overall maximum managerial remuneration that may be paid to the Directors (Executive as well as Non-Executive), generally over a period of 3 years.

ii. Recommendation to the Board by the NRC Committee:

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

a. For Executive Directors:

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

ii) Market factors;

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

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

v) Compensation trends for the past years; and

vi) Inflation index.

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

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

b. For Non-Executive Directors:

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

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

iii) contribution to the Board and Committees and

iv) participation in the Board matters.

iii. Approval by the Board:

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

iv. Ensuring Compliance with the Companies Act, 2013

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

23. Particulars of Employees

People are our most valuable asset and your Company places the engagement, development and retention of talent as its highest priority, to enable achievement of the organizational vision.

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

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

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

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

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

25. Particulars of Loans, Guarantees and Investments

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

26. Particulars of Contracts or Arrangements with Related Parties

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

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

Details of the Related Party Transactions, as required under Listing Regulations and the relevant Accounting Standards are given in note no. 45 to the Standalone Financial Statements.

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

27. Annual Return

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

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

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

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

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

Particulars No. of Options
Options Reserved 2,50,000
Options Exercised 82,475
Options Outstanding 1,67,525

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

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

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

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

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

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

1 CAT Percentile Predictor (CAT PP): Take, for example, the CAT percentile predictor which has, over the years, correctly predicted the CAT percentiles of many students up to the second digit after the decimal point. CAT PP works on a model that takes into account a student's performance in their Mock (practice) CATs. That coupled with the database of students we have accumulated over the years gives the model the desired accuracy.

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

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

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

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

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

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

7. Lead nurturing using a high-end platform - With the use of Netcore, we are able to do automated lead nurturing using emailers, web pushes and SMSes to increase engagement. The platform allows us to do persona-based targeting to visitors on our website, thus allowing us to run personalised campaigns. With Netcore's researched approach, email ‘inboxing' improved, resulting in better Open Rates in addition to 60% reduction in the cost of emailing.

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

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

During the Financial Year under review, the Foreign Exchange earnings and outgo were as follows:

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

(Rs in Lakhs)

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

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

(Rs in Lakhs)

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

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

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

31. Directors' Responsibility Statement

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

a. in the preparation of the Annual Accounts for the Financial Year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

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

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

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

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

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

32. Acknowledgement

Your Directors take this opportunity to thank the Company's customers, shareholders, vendors and bankers for their support and look forward to their continued support in the future.

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