Javeri Fiscal Services Ltd.

CL Educate Limited (‘the Company’) was incorporated in India on April 25, 1996 to conduct various educational and consulting programmes. The Company is a closely held company with 76.94% (brvious year 77.69%) of the shares being held by the promoters / directors of the Company and their relatives and the balance 23.06% (brvious year 22.31%) of the shares are being held by other individuals and companies.

The financial statements have been brpared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been brpared under the historical cost convention on an accrual basis.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of services, the operating cycle of the Company cannot be ascertained as it may range from 1 month to 3 years due to wide range of coaching programmes being offered by the Company. In absence of any ascertainable operating cycle the same has been taken as 12 months for the purpose of current and non-current classification of assets and liabilities except in case of trade receivables, unearned revenue, trade payables related to franchisee fees and brpaid franchisee fees which in view of management are directly linked to revenue from coaching and hence have been treated as current for the purpose of disclosure in financial statements.

The brsentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s best knowledge of current events and actions the company may undertake in future, actual results ultimately may differ from the estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

Educational and training businesses of the Company include revenue from sales of text books and revenue of service.

Sale of text books for full course is recognised at the time of receipt of first payment on account of test brparation services provided by the Company.

Revenue in respect of educational and training fees received from students is recognised on time basis over the period of the course. Fees are recorded at invoice value, net of discounts, if any.

- Revenue in respect of one-time License fee received from the franchisees is recognised on execution of the contract.

- Revenue of Licensing content given for a long term period and dependent on percentage of revenue earned by the licensee is recognised when the right to receive payment is established.

- Revenue in respect of vocational training is recognised over the period of the training period. However, taking into account the uncertainty involved in conditions to be fulfilled under the terms of the contract, portion of such revenue depending upon such uncertainty is deferred till the fulfilment of conditions of the contract.

- Revenue from consultancy services and seminar and alliance income is recognised as and when services are actually rendered.

- Revenue from advertising income is recognised on accrual basis as per the terms of agreement.

- Revenue from infrastructure fees is recognised on accrual basis on the basis of time period.

Government grants available to the enterprise are recognised when both the following conditions are satisfied:

(a) where there is reasonable assurance that the enterprise will comply with the conditions attached to them; and

(b) where such benefits have been earned by the enterprise and it is reasonably certain that the ultimate collection will be made.

Grants related to specific fixed assets are shown as a deduction from the gross value of the asset concerned in arriving at its book value. The grant is thus recognised in the statement of profit and loss over the useful life of a debrciable asset by way of a reduced debrciation charge. Where the grant equals the whole, or virtually the whole, of the cost of the asset, the asset is shown in the balance sheet at a nominal value.

Grants related to revenue are disclosed in other operating income as Grant income.

Unbilled revenue, included in other current assets, rebrsents amounts recognised based on services performed in advance of billing in accordance with service terms.

Amounts billed and received or recoverable prior to the reporting date for services to be performed after the reporting date is recorded as unearned revenue in other current liabilities.

Revenue from interest on time deposits and inter-corporate loans is recognised on the time proportion method taking into consideration the amount outstanding and the applicable interest rates.

Dividends income is recognised when the right to receive the same is established.

Tangible fixed assets are stated at cost, less accumulated debrciation and impairment losses if any. Cost comprises the purchase price and any cost attributable to bringing the assets to its working condition for its intended use.

Fixed assets retired from active use and held for disposal are stated at lower of book value and net realisable value as estimated by the company and are shown separately in the financial statements under other current assets. Loss determined, if any, is recognised immediately in the Statement of Profit and Loss, whereas profit and sale of such assets is recognised only upon completion of sale thereof.

An intangible asset is recognized when it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured. Intangible assets are stated at cost of acquisition less accumulated amortisation and impairment losses if any. Cost comprises the purchase price and any cost attributable to bringing the assets to its working condition for its intended use.

Debrciation and amortisation has been calculated on Straight Line Method at the following useful lives, based on management estimates, which are equal to or higher than the rates specified as per schedule XIV of the Companies Act, 1956, which in the opinion of the management are reflective of the estimated useful lives of fixed assets:-

Particulars	Useful life (years)
Tangible Assets:
Building	60
Leasehold land	90 (period of lease)
Plant and machinery	15
Furniture and fixtures	10-15
Office equipment	10
Vehicle	10
Computer equipment	5-7
Leasehold improvements	3
Intangible Assets:
Trademark	5
Software	5
Intellectual property rights	Amortised over a period of 10 years using straight line method based on the management’s assessment of useful life.
Goodwill	5 years from the date of acquisition of business.

Debrciation and amortisation on addition to fixed assets is provided on pro-rata basis from the date the assets are ready for intended use. Debrciation and amortisation on sale/discard from fixed assets is provided for upto the date of sale, deduction or discard of fixed assets as the case may be.

All assets, except chairs, costing ? 5,000 or below are debrciated in full by a one-time debrciation charge unless used as project assets under infrastructure projects. Chairs costing ? 5,000 or below are charged to the statement of profit and loss on the date of their acquisition.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital.

After impairment, debrciation/amortisation is provided on the revised carrying amount of the asset over its remaining useful life.

Borrowing costs relating to acquisition or construction or production of assets which takes substantial period of time to get ready for its intended use are included as cost of such assets to the extent they relate to the period till such assets are ready to be put to use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

Finance leases, which effectively transfer to the company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and brsent value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.

A leased asset is debrciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the company will obtain the ownership by the end of the lease term, the capitalized asset is debrciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Leases in which the company transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the net investment in the lease. After initial recognition, the company apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest income is recognized in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including debrciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss.

An investment in land or buildings, which is not intended to be occupied substantially for use by, or in the operations of, the company, is classified as investment property. Investment properties are stated at cost, net of accumulated debrciation and accumulated impairment losses, if any.

The cost comprises purchase price and directly attributable cost of bringing the investment property to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Debrciation on building component of investment property is calculated on a straight-line basis using the rate arrived at based on the useful life estimated by the management, or that brscribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The company has used the debrciation rate of 1.67% (useful life of 60 years).

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

Investments that are realisable within the period of twelve months from the balance sheet date are classified as current investment. All other investments are classified as non-current investments.

Inventories are valued at the lower of cost and net realisable value. The comparison of cost and net realisable value is made on each item basis. Cost is determined on first in first out basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, and bonus etc are recognized in the statement of profit and loss in the period in which the employee renders the related service.

All employees of the Company are entitled to receive benefits under the Provident Fund, which is a defined contribution plan. Both the employee and the employer make monthly contributions to the plan at a brdetermined rate as per the provisions of The Employees Provident Fund and Miscellaneous Provisions Act, 1952. These contributions are made to the fund administered and managed by the Government of India.

Employees whose wages/salary is within the brscribed limit in accordance with the Employee State Insurance Act, 1948 under the Act, are covered under this scheme. These contributions are made to the fund administered and managed by the Government of India.

The Company's contributions to these schemes are expensed off in the statement of profit and loss. The Company has no further obligations under these plans beyond its monthly contributions.

The Company provides for retirement benefits in the form of Gratuity. Benefits payable to eligible employees of the company with respect to gratuity, a defined benefit plan is accounted for on the basis of an actuarial valuation as at the balance sheet date. In accordance with the Payment of Gratuity Act, 1972, the plan provides for lump sum payments to vested employees on retirement, death while in service or on termination of employment in an amount equivalent to 15 days basic salary for each completed year of service. Vesting occurs upon completion of five years of service. The brsent value of such obligation is determined by the projected unit credit method and adjusted for past service cost and fair value of plan assets as at the balance sheet date through which the obligations are to be settled. The resultant actuarial gain or loss on change in brsent value of the defined benefit obligation or change in return of the plan assets is recognised as an income or expense in the statement of profit and loss. The expected return on plan assets is based on the assumed rate of return of such assets. The Company contributes to a trust set up by the company which further contributes to a policy taken from the Life Insurance Corporation of India.

Benefits under the Company’s leave encashment scheme constitute other employee benefits. The liability in respect of leave encashment is provided on the basis of an actuarial valuation done by an independent actuary at the end of the year. Actuarial gain and losses are recognized immediately in the statement of profit and loss.

The Employee Stock Option Scheme (‘the Scheme’) provides for the grant of equity shares of the Company to its employees. The Scheme provides that employees are granted an option to acquire equity shares of the Company that vests in a graded manner. The options may be exercised within a specified period. The Company follows the fair value method to account for its stock-based employee compensation plans. Compensation cost is measured using Independent valuation by a firm of Chartered Accountants using Black-Scholes model in accordance with the guidance note issued by the Institute of Chartered Accountants of India. Compensation cost, if any is amortised over the vesting period.

Transactions in foreign currency are recorded at the exchange rate brvailing at the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the statement of profit and loss. Transactions of a foreign branch are recorded at the daily average rate.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognised in the statement of profit and loss. Non-monetary assets are recorded at the rates brvailing on the date of the transaction.

Tax expense for the year comprising current tax and deferred tax is included in determining the net profit for the year.

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961.

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed debrciation or carry forward of losses, deferred tax assets are recognised only if there is a virtual certainty backed by convincing evidence of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and are written-down or written-up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realized.

Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted at the Balance Sheet date

The Company creates a provision when there is brsent obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

Contingent assets are neither recorded nor disclosed in the financial statements.

Cash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less.

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue, share split or consolidation of shares.

For calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date.

Material events occurring after the balance sheet date are taken into cognizance.

The Company has in accordance with the Accounting Standard-15 ‘Employee Benefits’ has calculated the various benefits provided to employees as under:

During the year the Company has recognized the following amounts in the statement of profit and loss:-

Particulars	31 March 2013	31 March 2012
	Amount in ?	Amount in ?
Employers contribution to provident fund	3,533,726	3,411,189
Employers contribution to Employees' State Insurance	219,196	289,177
Total ( Also Refer note 28)	3,752,922	3,700,366

The brsent value obligation is determined based on actuarial valuation using the projected unit credit method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligations.I. Actuarial assumptions

Particulars	Earned Leave		Gratuity (funded)
31 March 2013	31 March 2012		31 March 2013	31 March 2012
Discount rate (per annum)	8.00%	8.78%		8.00%	8.78%
Expected rate of increase in compensation levels	5.00%	5.00%		5.00%	5.00%
Expected rate of return on plan assets	N.A.	N.A.		9.25%	9.25%
Expected average remaining working lives of employees (years)	27.19	27.71		27.19	27.71
Retirement age (Years)	58	58		58	58
Mortality table	IALM (1994-96)	LIC (1994-96)		IALM (1994-96)	LIC (1994-96)
Ages	Withdrawal Rate (%)		Withdrawal Rate (%)
Up to 30 Years	3.00		3.00
From 31 to 44 years	2.00		2.00
Above 44 years	1.00		1.00

The discount rate has been assumed at 8.00% p.a. (brvious year 8.78% p.a.) which is determined by reference to market yield at the balance sheet date on government securities. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Adjustment on account of wrong non-deduction by life insurance corporation (LIC) in earlier year rebrsent amount of fund balance (including interest) wrongly not deducted by LIC on account of transfer of employees to CL Media Private Limited from the Company and not accounted by the Company. Details of same are as follows:

Particulars	31 March 2013	31 March 2012
	Amount in ?	Amount in ?
Fund Amount	465,412	-
Interest amount	139,524	-
	604,936	-

. Reconciliation of brsent value of defined benefit obligation and fair value of assets (Amount in ?)

Particulars	Earned leave		Gratuity (funded)
	31 March 2013	31 March 2012		31 March 2013	31 March 2012
Present value of obligation as at the end of the year	5,917,117	5,003,743		5,930,320	5,151,348
Above amount comprises of:
Short term brsent value of obligation	831,708	1,151,157		644,848	565,292
Long term provision	5,085,409	3,852,586		5,285,472	4,586,056
Total (A)	5,917,117	5,003,743		5,930,320	5,151,348

Fair Value of plan assets as at the end of the year	-	-		2,031,805	1,962,767
Above amount comprises of:
Short term fair value of plan assets	-	-		644,848	565,292
Long term fair value of plan assets	-	-		1,386,957	1,397,475
Total (B)	-	-		2,031,805	1,962,767

Net liability recognized in balance sheet as at year end (A-B)	5,917,117	5,003,743		3,898,515	3,188,581
Amount classified as:
Short term provision (Refer note 8)	831,708	1,151,157		-	-
Long term provision (Refer note 8)	5,085,409	3,852,586		3,898,515	3,188,581

VI. Net assets/liability and actuarial experience gain/(loss) for brsent benefit obligation (‘PBO’) and plan assets and employers best estimate for next year

Particulars	31 March 2013	31 March 2012	31 March 2011	31 March 2010	31 March 2009
PBO	5,930,320	5,151,348	5,220,924	4,000,554	4,511,149
Plan assets	2,031,805	1,962,767	1,632,356	1,975,902	3,102,363
Net assets/(liability)	(3,898,515)	(3,188,581)	(3,588,568)	(2,024,652)	(1,408,786)
Experience gain/(loss) on PBO	924,288	785,029	(1,600,913)	500,257	-
Experience gain/(loss) on plan assets	(2,879)	39,845	(24,004)	(102,866)	-

Particulars	31 March 2013	31 March 2012	31 March 2011	31 March 2010	31 March 2009
PBO	5,917,117	5,003,743	4,919,119	4,501,246	4,690,332
Plan assets	-	-	-	-	-
Net assets/(liability)	(5,917,117)	(5,003,743)	(4,919,119)	(4,501,246)	(4,690,332)
Experience gain/(loss) on PBO	(648,627)	(201,840)	(442,554)	(219,025)	1,078,435
Experience gain/(loss) on plan assets	-	-	-	-	-

The plan assets of the company are managed by Life Insurance Corporation of India through a trust managed by the Company in terms of an insurance policy taken to fund obligations of the company with respect to its gratuity plan. The categories of plan assets as a percentage of total plan assets is based on information provided by Life Insurance Corporation of India with respect to its investment pattern for group gratuity fund for investments managed in total for several other companies. Information on categories of plan assets as at March 31, 2013 has not been provided by Life Insurance Corporation of India.

Particulars	Amount in ?
Employees gratuity fund	2,314,817
Earned leave	1,411,350

The company has identified one reportable business segment as primary segment: Education and training programme (including sale of study material). The segment has been identified and reported taking into account the nature of products, the differing risks and returns, the organisation structure and the internal financial reporting systems.

Education and training programme (including sale of study material) mainly include coaching for higher education entrances.

For the Year ended 31 March 2013(Amount in ?)

Particulars	Education and training programme (including sale of study material)	Others	Total
Segment revenue
Operating income	985,397,048	179,800,618	1,165,197,666
Allocable other income	29,046,639	-	29,046,639
Total segment income-allocable	1,014,443,687	179,800,618	1,194,244,305
Total expenses- allocable	752,842,072	87,477,496	840,319,568
Total segment result- allocable	261,601,615	92,323,122	353,924,737
Unallocable other income			152,351,081
			506,275,818
Total expenses- unallocable			410,092,807
Operating profit before exceptional expenses, tax and prior period			96,183,011
Prior period expense/(income)			(3,804,590)
Profit before tax			99,987,601
Total tax expenses			41,121,270
Net profit			58,866,331

Segment assets	502,514,429	136,730,543	639,244,972
Unallocable assets			1,129,455,374
Total assets			1,768,700,346

Segment liabilities	214,579,417	10,408,363	224,987,780
Unallocable liabilities			449,751,681
Total liabilities			674,739,461

Other information
Capital expenditure-allocable	7,028,294	758,544	7,786,838
Capital expenditure-unallocable			17,794,540
Debrciation and amortisation- allocable	18,220,570	1,043,632	19,264,202
Debrciation and amortisation-unallocable			17,966,975
Other significant non-cash expenses (net)-allocable	27,172,273	614,603	27,786,876
Other significant non-cash expenses (net)-unallocable			20,179,875

For the Year ended 31 March 2012(Amount in ?)

Particulars	Education and training programme (including sale of study material)	Others	Total
Segment revenue
Operating income	806,310,303	139,767,054	946,077,357
Allocable other income	16,614,517	-	16,614,517
Total segment income-allocable	822,924,820	139,767,054	962,691,874
Total expenses- allocable	541,324,245	75,394,386	616,718,631
Total segment result- allocable	281,600,575	64,372,668	345,973,243
Unallocable other income			50,922,418
			396,895,661
Total expenses- unallocable			298,650,316
Operating profit before exceptional expenses, tax and prior period			98,245,345
Exceptional expenses			196,616,459
Operating loss before tax and prior period			(98,371,114)
Prior period expense/(income)			(2,409,139)
Loss before tax			(95,961,975)
Total tax benefit (net)			(39,672,665)
Net loss			(56,289,310)

Segment assets	281,614,019	128,253,878	409,867,897
Unallocable assets			1,288,916,604
Total assets			1,698,784,501

Segment liabilities	164,840,055	-	164,840,055
Unallocable liabilities			610,720,976
Total liabilities			775,561,031

Other information
Capital expenditure-allocable	-	120,000,000	120,000,000
Capital expenditure-unallocable			19,699,638
Debrciation and amortisation- allocable	-	9,485,207	9,485,207
Debrciation and amortisation- allocable-unallocable			17,363,304
Other significant non-cash expenses (net)-allocable	57,027,829	-	57,027,829
Other significant non-cash expenses (net)-unallocable			103,990,588

For the Year ended 31 March 2013(Amount in ?)

Particulars	Within India	Overseas	Total
Segment revenue
Operating income	1,121,577,890	43,619,776	1,165,197,666
Segment assets	1,756,367,958	12,332,388	1,768,700,346
Segment liabilities	674,739,461	-	674,739,461

For the Year ended 31 March 2012(Amount in ?)

Particulars		Within India		Overseas		Total
Segment revenue		900,709,767		45,367,590		946,077,357

Information on assets and capital expenditure has not been provided by locations of customers, as such information is not realistically allocable and identifiable in the brvious year.

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