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Directors Report of Zee Learn Ltd.

Mar 31, 2016

To,

The Members of Zee Learn Limited

Your Directors take pleasure in presenting the Sixth Annual Report of the Company together with Audited Financial Statements for the year ended March 31, 2016.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 (‘the Act’), in relation to the Audited Financial Statements for the Financial Year 2015-2016, your Directors confirm that:

a) The Financial Statements of the Company - comprising of the Balance Sheet as at March 31, 2016 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis following applicable accounting standards and that no material departures have been made from the same;

b) Accounting policies selected were applied consistently and the judgments and estimates related to these financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016, and, of the profits of the Company for the year ended on that date;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

d) Requisite internal financial controls to be followed by the Company were laid down and that such internal financial controls are adequate and operating effectively; and

e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

FINANCIAL PERFORMANCE

The financial performance of your Company for the year ended March 31, 2016 is summarized below:

('' in jacs)

Particulars

Standalone

- Year ended

Consolidated

- Year ended

March 31, 2016

March 31, 2015

March 31, 2016

March 31, 2015

Revenue from Operations

13,900.90

12,158.25

15,132.82

12,778.33

Other Income

337.71

473.38

198.27

383.50

Total Income

14,238.61

12,631.63

15,331.09

13,161.83

Total Expenses

10,725.03

9,664.31

10,806.22

9,717.48

Operating Profit/Loss

3,513.58

2,967.32

4,524.87

3,444.35

Less: Finance Cost

1,438.51

1,324.84

1,997.58

1,520.43

Less: Depreciation

568.21

680.21

1,018.96

934.54

Profit/Loss before Tax

1,506.86

962.26

1,508.33

989.37

Provision for Taxation (Net)

-

-

-

-

Profit/Loss after Tax

1,506.86

962.26

1,508.33

989.37

Balance Carried To Balance Sheet

1,506.86

962.26

1,508.33

989.37

There have been no material changes and commitments that have occurred after close of the financial year till the date of this report, which affect the financial position of the Company. Based on the internal financial control framework and compliance systems established in the Company, the work performed by Statutory, Internal, Secretarial Auditors and reviews performed by the management and/or relevant Audit and other Committees of the Board, your Board is of the opinion that the Company’s internal financial controls were adequate and working effectively during financial year 2015-16.

DIVIDEND

With a view to conserve the resources for future business requirements and expansion plans, your Directors are of view that the current year’s profit be ploughed back into the operations and hence no dividend is recommended for the year under review.

BUSINESS OVERVIEW

“Think Education, Think Zee Learn.” With the motto of building the nation through education, your Company is constantly contributing in the field of education across age groups, all the while maintaining its core values of integrity, ownership, leadership, trust and continuous learning. Zee Learn delivers Education solutions for various stages of an individual’s growth - from toddler to youth. We believe that every child has a unique and infinite potential and we are committed to help children realize their capabilities. Under its Portfolio, Zee Learn is currently operating over 1550 Pre - schools & 103 K-12 schools, through its leading brands, “Kidzee" & "Mount Litera Zee School" respectively. During the current financial year Kidzee has serviced over 1,16,600 children and MLZS has serviced more than 40,000 students, through its network of preschool centre’s and K-12 school chain.

This year, your company forayed into teacher training in order to impetus the demand for the growing urge of quality education at the grass root level. The company signed up 22 franchisee partners in the FY16.

Your Company delivered on its promise of sustained profitability and improving on margins and has shown remarkable growth in profit after tax. The improved performance is a result of sustained growth in the business in spite of tough economic conditions and through various measures taken for driving efficiencies in running its pre-school and K-12 school operations, run under the brand name of ‘Kidzee’ and ‘Mount Litera Zee School’ respectively.

SHARE CAPITAL

During the year under review, your Company had allotted 5,53,158 Equity Shares of Re. 1/- each upon exercise of Stock Options by the Option grantees under the Employee Stock Option Scheme. This has resulted an increase in the paid-up equity share capital of the Company from Rs. 32,00,01,097 to Rs. 32,05,54,255 comprising of 32,05,54,255 equity shares of Re. 1/- each.

REGISTRAR & SHARE TRANSFER AGENT

During the first quarter of Calendar Year 2016, there were certain allegations of fraud and malpractices in the conduct and operations of Sharepro Services (India) Pvt Ltd (‘Sharepro’), who has been the Registrar and Share Transfer (R&T) Agent of the Company and upon preliminary investigations, SEBI had issued an order dated March 22, 2016 interlaid restraining Sharepro from involving in market related activities and directed all Companies who are clients of Sharepro to conduct a thorough Audit of records and systems of Sharepro with respect to dividends paid and transfer of securities for a period of at least 10 years. In compliance with the said directions of SEBI, since your Company has not paid any dividend from the date of incorporation till date, the scope of the Assurance Audit was expanded to cover Share transfers in the Company for a period commencing from the date of listing of the Equity Shares of the Company i.e. from December 20, 2010 until end of March 2016. The Assurance Audit in relation to handling of R&T functions by Sharepro, done at the behest of your Company by M/s MKB and Associates, Company Secretaries confirms that all transfers of securities were found in order and there has not been any malpractice or system related issues found during the said audit.

Subsequently, in pursuance of the advisory issued by SEBI vide Order dated March 22, 2016 and considering that key employees were leaving Sharepro which could affect R&T services at Sharepro in future, your Company has appointed M/s Link In time India Private Limited as the R&T Agent in place of Sharepro. The said changeover of R&T agent shall take effect from July 1, 2016.

SCHEME OF AMALGAMATION

The Board of Directors of Zee Learn Limited at its meeting held on December 23, 2015 approved the Scheme of Amalgamation between Zee Learn Limited and Tree House Education & Accessories Limited. The scheme has been filed with the Stock Exchanges by both the Companies and “No Objection” letter has been received from them.

NON-CONVERTIBLE DEBENTURES

Your Company had allotted on April 8, 2015 650 (Six Hundred Fifty) Rated, Unlisted, Redeemable, Non-Convertible Debentures (“Debentures” Or “NCDs”) of the Face Value of Rs. 10,00,000/- (Rupees Ten Lakhs Only) Each, for cash, aggregating up to Rs. 65,00,00,000/- (Rupees Sixty Five Crores Only) in terms of the Information Memorandum circulated on Private Placement Basis, on which Credit Analysis & Research Limited (CARE) has affirmed the rating of ‘CARE AA (SO)’, which signifies the NCDs are construed to offer high safety for timely servicing of debt obligation and carries very low credit risk.

GLOBAL DEPOSITORY RECEIPTS

During the Financial year 2013-14, Global Depository Receipts (GDRs) offer of the Company for 56,17,977 GDRs opened for subscription at an issue price of US$ 3.56 per GDR representing 5.61.79.770 fully paid Equity Shares Re.1/- each of the Company(each GDR representing 10 Equity Shares). Upon subscription of the GDR, the Company Issued and allotted 5.61.79.770 fully paid Equity Shares of Rs. 19.50 per share underlying Global Depository Receipts (“GDRs”) on May 21, 2013. 5,61,79,770 Global Depository Receipts have been listed on the Luxembourg Stock Exchange since May 24, 2013. As at March 31, 2016, total 27,50,977 GDRs have remained outstanding, the underlying shares of which forms part of the existing paid up share capital of the Company.

EMPLOYEES STOCK OPTION SCHEME

Your Company has modified its existing ESOP scheme to ZLL ESOP 2010 - AMENDED 2015 Scheme in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 and had also obtained the approval of the Shareholders of the Company by way of Postal Ballot on December 18, 2015, for increase in the pool of Stock Options from existing 61,36,930 Stock Options to 1,60,07,451 Stock Options (which is equivalent to 5% of the Issued, Subscribed and Paid-up Share capital of the Company as on October 28, 2015, which is 32,01,49,020 Equity Shares of Re.1/- each) for grant of stock options to its eligible employees and Directors of the Company and its Subsidiary Companies. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employee Stock Option Scheme of the Company.

The applicable disclosures under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014, relating to the Scheme are posted in Investor Relations section on the Company’s website www.zeelearn.com .

During the year under review, the Nomination & Remuneration Committee at its meeting held on October 28, 2015, granted 6402980 Stock Options in the category of employees/ Directors of the Company. These options when vested as per the terms and conditions of the Scheme entitled the option holder to apply for and be allotted equal number of equity shares of face value of Re. 1/- each at an exercise price of Rs. 31.80 per share being the closing market price of the equity shares of the Company on the National Stock Exchange of India Limited as on October 27, 2015. Since the options have been granted at the market price, the intrinsic value at grant is Nil and hence there is no charge to the Profit and Loss account. These options will vest in a phased manner over a period of 3 years beginning 2016, and may be exercised within a maximum of four years from the date of vesting, subject to terms and conditions of the Scheme and the grant letter. Your Directors believe this Scheme will help create long term value for shareholders and operate as long term incentive to attract and retain senior managerial talent.

SUBSIDIARY COMPANY

As at March 31, 2016, your company had two wholly owned subsidiaries, namely, Digital Ventures Private Limited and Academia Edificio Private Limited.

During the year, Academia Edificio Private Limited has been incorporated on January 14, 2016 as wholly owned subsidiary of the Company to venture into building / constructing / developing educational infrastructure. Apart from above, no other Subsidiary/ Joint-venture was formed or divested during the year under review. In compliance with Section 129 of the Companies Act, 2013, a statement containing requisite details including financial highlights of the operations of all subsidiaries is annexed to this report.

In accordance with Accounting Standard AS 21 - Consolidated Financial Statements read with Accounting Standard AS 23 -Accounting for Investments in Associates, and Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements are provided in and forms part of this Annual Report.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of each of the subsidiaries are available on the website of the Company www.zeelearn.com. These documents will also be available for inspection during business hours at the Registered Office of the Company.

CORPORATE GOVERNANCE & POLICIES

Your Company is in compliance with the Corporate Governance requirements mentioned in Listing Regulations. In terms of Schedule V of Listing Regulations, a detailed report on Corporate Governance along with Compliance Certificate issued by the Statutory Auditors of the Company is attached and forms an integral part of this Annual Report. Management Discussion and Analysis Report as per Listing Regulations are presented in separate sections forming part of the Annual Report.

In compliance with the requirements of Section 178 of the Companies Act, 2013, the Nomination & Remuneration Committee of your Board had fixed various criteria for nominating a person on the Board which inter alia include desired size and composition of the Board, age limits, qualification / experience, areas of expertise and independence of individual. Your Company has also adopted a Remuneration Policy, salient features whereof is annexed to this report.

In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board has approved various Policies including Code of Conduct for Directors & Senior Management, Material Subsidiary Policy, Insider Trading Code, Document Preservation Policy, Material Event Determination and Disclosure Policy, Fair Disclosure Policy, Whistle Blower and Vigil Mechanism Policy, Related Party Transaction Policy and Remuneration Policy. All these policies and codes have been uploaded on Company’s corporate website www.zeelearn.com. Additionally, Directors Familiarization Programme and Terms and Conditions for appointment of Independent Directors can be viewed on Company’s corporate website www.zeelearn.com

CORPORATE SOCIAL RESPONSIBILITY

In compliance with requirements of Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee (CSR Committee). The CSR Committee comprises Mr. Surjit Banga, Independent Director as Chairman and Mr. Himanshu Mody, Non- Executive Director and Dr. Sangeeta Pandit, Independent Director as Members.

The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

The Company was not required to spend any amount on CSR activities during the FY 2015-16.

However, as responsible citizen, your Company believes that a Business cannot succeed in a society that fails and therefore, it is imperative for business houses, to invest in the future by taking part in CSR activities. As part of CSR activity the Company has conducted the CSR activities as mentioned below:

Community Connect Activities at Kidzee

I Care Seminars for creating awareness about prevention of child abuse:- Through the year, Kidzee continued its commitment of standing for ‘What’s Right For Child’ through its Child Abuse Prevention initiative I Care. A module designed to educate adults about child abuse, it teaches to recognize incidence and prevent it further. As a policy, all adults in the centre including teachers and support staff are trained under I Care. This is further taken to parents and this year, Kidzee took this initiative to the community at large by conducting events at RWAs and Corporate. Every Kidzee preschool in the country aims to sensitize maximum adults in their catchments about the incidence of Child Abuse thereby aiming to create an abuse-free and nurturing environment for every child.

World Environment Day:- On World Environment Day in June, Kidzee preschools across the country celebrated the occasion by educating the community on the huge issue looming ahead and distributed saplings amongst adults in their catchment. They spread the message of conserving the environment so that they have a safe and healthy planet to live in when they grow up.

Early Childhood Care and Education Seminars (ECCE Seminars):- In its quest to stand for ‘What’s Right For Child’,

Kidzee set up an initiative to create awareness about the importance of the early years of the child. This module was created in an easy to execute format such that maximum preschools across the country conduct the activity with not just enrolled parents but also parents in the catchment area to generate the importance associated with the formative years of the child. This module is successfully being conducted in RWAs, Corporate and Associations.

Donation Drive in association with Madras Round Table:- In association with Madras Round Table (MRT1), Kidzee participated in a city-wide donation drive in Chennai. As part of this activity, Kidzee preschools encouraged children and their parents to donate their toys, books and clothes to underprivileged and less fortunate children. This was in line with teaching children to be compassionate towards fellow human beings and doing their best to add value back to society.

Community Connect Activities at MLZS Schools

Woman’s Day Activity:- Special activity was carried out to mark International Woman’s Day in March 2016 in MLZS schools. Self defense workshops for young girls were organized in over 20 schools. Not just for MLZS students, this workshop was open to students and parents from outside as well. Additionally activities on gender equality were also carried out in the schools with support of toolkit from Amnesty International.

Illuminating Lives (Diwali Outreach):- On the occasion of Diwali, MLZS schools across the country reached out to the disadvantaged/impoverished sections of society in villages around the school and brought them joy and support with clothes, food and the greatest gift of all, love.

World Yoga Day:- Yoga Shivirs were organized at 62 Mount Litera Zee Schools for students and families along with lectures via Experts and the material created by Ministry of AYUSH. There were Yoga demonstrations with children being part of the demonstration and over 25,000 students’ families and staff members were reached through mailers and Whatsapp encouraging them for including Yoga as part of their daily lifestyles. It created a mega impact as Zee Learn was able to extend the vision of a healthier country down to the cities where we have our schools.

Digital Citizenship Program (DCP):- Through several workshops, activities and communications, the Digital Citizenship Program was a major initiative by MLZS to help educate both students and parents to the important of responsible usage of digital technology and the perils of social media addiction, as well as how to ensure one’s health and family life is not stunted by usage of digital technology.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Board currently comprises of 5 Directors including 3 (three) Independent Directors, 1 (one) Non-Executive Director and 1 (one) Executive Director. Independent Directors provide their declarations both at the time of appointment and annually confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and Listing Regulations. During FY 2015-2016, your Board met 6 (six) times details of which are available in Corporate Governance Report annexed to this report.

Mr. Himanshu Mody, Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible he has offered himself for re-appointment. Your Board recommends his re-appointment.

During the year under review, Mr. Subodh Kumar resigned from the directorship of the Company with effect from July 30, 2015 and Mr. Ajey Kumar was appointed as the Executive Director of the Company with effect from October 28, 2015, on the terms and conditions as approved by the shareholders by passing Special Resolution through postal ballot on December 18, 2015.

Pursuant to the Members’ approval at the 4th Annual General Meeting held on August 11, 2014, Dr. Sangeeta Pandit, Mr. Surjit Banga and Dr. Manish Agarwal were appointed as Independent Directors of the Company for a period of three years till November 30, 2016, March 31, 2017 and March 31, 2017 respectively. Special Resolutions seeking members’ approval for appointing them as Independent Director(s) for the second term of 3 years from expiry of their current terms form part of the Notice of the ensuing Annual General Meeting. Your Company has received notice(s) in writing along with requisite deposit pursuant to Section 160 of Companies Act, 2013, proposing their appointment for the second term and based on performance evaluation and contributions made by Dr. Sangeeta Pandit, Mr. Surjit Banga and Dr. Manish Agarwal, your Board recommends their appointment for the second term of 3 years upon expiry of their current term.

In compliance with Section 203 of the Companies Act, 2013, your Board had re-appointed Mr. Umesh Pradhan, Chief Financial Officer of the Company as a Manager for a period of three years with effect from April 1, 2016, without any remuneration as Manager of the Company. However, Mr. Pradhan will continue to draw remuneration as CFO of the Company. A proposal seeking Members approval for re-appointment of Mr. Umesh Pradhan as Manager of the Company forms part of the Notice of ensuing Annual General Meeting. Mr. KVS Seshasai resigned from the post of Chief Executive Officer with effect from February 1, 2016.

Mr. Samir Raval has resigned from the Company w.e.f. June 15, 2015 and Ms. Hemangi Patil was appointed in his place as Company Secretary and Compliance Officer of the Company w.e.f. June 16, 2015.

BOARD EVALUATION

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated. Based on such report of the meeting of Independent Directors and taking into account the views of directors the Board had evaluated its performance on various parameters such as Board composition and structure, effectiveness of board processes, effectiveness of flow of information, contributions from each Directors, etc., was found to be satisfactory.

BOARD COMMITTEES

In compliance with the requirements of Companies Act, 2013 and Listing Agreements/ Listing Regulations, your Board had constituted various Board Committees including Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. Details of the constitution of these Committees, which are in accordance with regulatory requirements, have been uploaded on the website of the Company viz. www.zeelearn.com. Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.

AUDITORS STATUTORY AUDITOR

The Statutory Auditors M/s. MGB & Co. LLP., Chartered Accountants, Mumbai having firm registration No. 101169W/W-100035 holds office until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment.

Your Company has received confirmation from the Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit & Auditors) Rules, 2014. Your Board is of the opinion that continuation of M/s MGB & Co. LLP, as Statutory Auditors during FY 2016-17 will be in the best interests of the Company and therefore, Members are requested to consider their reappointment as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till next Annual General Meeting at remuneration be decided by the Board.

COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, amended rules, 2014, the cost audit records maintained by the Company in respect of its education services, other than such similar services falling under philanthropy or as part of social spend which do not form part of any business is required to be Audited.

Your Directors had, on the recommendation of the Audit Committee and on ratification of its Members appointed M/s V V & Associates, Cost Auditor having Firm Registration No. 000515 to audit the cost accounts of the Company for the financial year 2016-17.

SECRETARIAL AUDITOR

During the year, Secretarial Audit was carried out by Ms. Mita Sanghavi, Practising Company Secretary in compliance with Section 204 of the Companies Act, 2013.

The reports of Statutory Auditor, Cost Auditor and Secretarial Auditor do not contain any qualification, reservation or adverse remarks. The reports of Statutory Auditor, Secretarial Auditor forming part of this Annual report. During the year the Statutory Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

DISCLOSURES i. Particulars of loans, guarantees and investments :

Particulars of loans, guarantees and investments made by the Company required under section 186 (4) of the Companies Act, 2013 are contained in Note No. 30 to the Standalone Financial Statements.

ii. Transactions with Related Parties :

None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Information on material transactions with related parties pursuant to Section 134(3)(h) of the Act, read with rule 8(2) of the Companies (Accounts) Rules, 2014, in Form AOC-2 is annexed to this report.

iii. Risk Management

The Company’s approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks.

iv. Internal Financial Controls

Internal Financial Controls includes policies and procedures adopted by the company for ensuring orderly and efficient conduct of its business, accuracy and completeness of the accounting records, and timely preparation of reliable financial information.

The Company has in place a proper and adequate Internal Financial Control System with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

v. Deposits:

Your Company has not accepted any public deposits under Chapter V of the Companies Act, 2013.

vi. Extract of Annual Return :

The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report.

vii. Sexual Harassment :

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. During the year under review no complaints on sexual harassment was received.

viii. Regulatory Orders :

No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company’s operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is engaged in the business of delivering learning solutions and training to entire spectrum of the society from toddler to teens through its multiple products. Since this business do not involve any manufacturing activity, most of the information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not applicable.

However, the information as applicable are given hereunder:

Conservation of Energy:

(i) Steps taken or impact on conservation of energy Your Company being a service provider requires minimal energy

(ii) Steps taken by the Company for utilizing alternate consumption and every endeavor has been made to ensure sources of energy optimal use of energy and avoid wastages and conserve energy

(iii) Capital investment on energy conservation as far as possible. equipments

Technology Absorption:

(i) The efforts made towards technology absorption

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the

In its endeavor to deliver the best to its users and business

a. The details of technology imported partners, your Company has been constantly active in - harnessing and tapping the latest and best technology in the

b. The year of import industry.

c. Whether the technology been fully absorbed

d. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof

(iv) The expenditure incurred on Research and Development

FOREIGN EXCHANGE EARNING AND OUTGO

During the year under review, there were no Foreign Exchange Earnings and the particulars of Foreign Exchange out go is given in Note no. 35 of the Notes to Accounts forming part of the Annual Accounts.

PARTICULARS OF EMPLOYEES

Requisite disclosures in terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 along with statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed under the said rules is annexed to this report.

ACKNOWLEDGMENTS

Your Board takes this opportunity to place on record their appreciation for the dedication and commitment of employees shown at all levels, Franchisees and Business Partners that have contributed to the success of your Company. Your Directors also express their gratitude for the valuable support and co-operation received from the Central and State Governments including Ministry of Human Resource Development and other stakeholders including Bankers, Financial Institutions, Investors, Service Providers as well as regulatory and government authorities.

For and on behalf of the Board

Place: Mumbai Himanshu Mody Surjit Banga

Date: May 13, 2016 Chairman Director


Mar 31, 2015

The Members of Zee Learn Limited

The Directors take pleasure in presenting the Fifth Annual Report of the Company together with Audited Financial Statements for the year ended March 31,2015.

DIRECTORS'RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 ('the Act'), in relation to the Audited Financial Statements for the Financial Year 2014 -2015, your Directors confirm that:

a) The Financial Statements of the Company - comprising of the Balance Sheet as at March 31, 2015 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis following applicable accounting standards and that no material departures have been made from the same;

b) Accounting policies selected were applied consistently and the judgments and estimates related to the financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015, and, of the profit of the Company for the year ended on that date;

c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act, to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;

d) Requisite internal financial controls were laid down and that such financial controls are adequate and operating effectively; and

e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

FINANCIAL PERFORMANCE

The financial performance of your Company for the year ended March 31,2015 is summarized below: (Rsln lacs)

Particulars For the year For the year ended March ended March 31,2015 31,2014

Revenue from Operations 12,158.25 11,917.54

Other Income 473.39 318.09

Total Income 12,631.64 12,235.63

Total Expenses 9,664.32 10,880.82

Operating Profit/Loss 2,967.32 1,354.81

Less: Finance Cost 1,324.84 823.30

Less: Depreciation 680.21 664.16

Profit/Loss before Tax 962.26 (132.65)

Provision for Taxation (Net) - -

Profit/Loss after Tax 962.26 (132.65)

Balance Carried to Balance Sheet 962.26 (132.65)

DIVIDEND

With a view to conserve the resources for future business requirements and expansion plans, your Directors are of view that the current year's profit be ploughed back into the operations and hence no dividend is recommended for the year under review.

BUSINESS OVERVIEW

Your Company is a leading education company, founded with the purpose of 'Improving Human Capital'. The company has contributed in the field of education across age groups, all the while maintaining its core values of integrity, ownership, leadership, trust and continuous learning. We believe that every child has a unique and infinite potential and we are committed to help children realize their capabilities. Linder its Portfolio, Zee Learn is currently operating over 1350 pre- schools & 87 K-12 schools, through its leading brands, "Kidzee" & "Mount Litera Zee School" respectively. By the current financial year end Kidzee has reached to over 4,10,000 students & MLZS has reached to about 30,500 students through its network of school chain.

In order to cater the need to develop skills of youth population, your company is looking to explore vocational courses outside the traditional curriculum. Zee Institute of Media Arts (ZIMA) provides diploma courses in TV and film making courses and Zee Institute of Creative Art (ZICA) provides diploma courses in 2D and 3D animation.

SHARE CAPITAL

During the year under review, your Company had allotted 6,69,453 Equity Shares ofRs. 1/- each upon exercise of Stock Options by the Option grantees under the Employee Stock Option Scheme. This has resulted an increase in the paid-up equity share capital of the Company from Rs. 31,93,31,644 to Rs. 32,00,01,097 comprising of 32,00,01,097 equity shares of Rs.1/-each.

NON-CONVERTIBLE DEBENTURES

During the year under review, 125 12% Secured Redeemable Non-Convertible Debentures ('SRNCD's) each ofRs. 10,00,000/- aggregating to Rs.12,50,00,000/-, listed on Wholesale Debt Market Segment of National Stock Exchange of India Ltd. (NSE), were redeemed as per the terms of issue and extinguished. As at March 31,2015, there is no outstanding SRNCD's.

Further, your Company had issued and allotted on April 8, 2015 650 (Six Hundred Fifty) Rated, Unlisted, Redeemable, Non-Convertible Debentures ("NCDs") of the Face Value of Rs.10,00,000/- (Rupees Ten Lakhs Only) Each, for cash, aggregating to Rs. 65,00,00,000/- (Rupees Sixty Five Crores Only) on Private Placement Basis, on which Credit Analysis & Research Limited (CARE) has affirmed the rating of 'CARE AA (SO)', which signifies the NCDs are construed to offer high safety for timely servicing of debt obligation and carries very low credit risk.

GLOBAL DEPOSITORY RECEIPTS

During the Financial year 2013-14, Global Depository Receipts (GDRs) offer of the Company for 56,17,977 GDRs opened for subscription at an issue price of US$ 3.56 per GDR representing 5,61,79,770 fully paid Equity Shares of Re. 1/- each of the Company(each GDR representing 10 Equity Shares). Upon subscription of the GDR, the Company issued and allotted 5,61,79,770 fully paid Equity Shares of Rs. 19.50 per share underlying Global Depository Receipts ("GDRs") on May 21, 2013. 56,17,977 Global Depository Receipts have been listed on the Luxembourg Stock Exchange since May 24, 2013. As at March 31,2015, total 41,17,977 GDRs have remained outstanding, the underlying shares of which forms part of the existing paid up share capital of the Company.

EMPLOYEES STOCK OPTION SCHEME

Your Company has implemented an Employee Stock Option Scheme called ZLL ESOP-2010, in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines) forgrant of stock options to its eligible employees of the Company and its Subsidiary. The Nomination & Remuneration Committee of the Board administers and monitors the Scheme. The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2015 are annexed to this report.

During the year under review, 19,61,750 Stock Options were granted on September 29, 2014. Further, your Company had issued and allotted 6,69,453 Equity Shares of Rs. 1/- each upon exercise of equivalent number of vested Stock Options by the Option Grantees at Option price of Rs. 26.05 (80,100 Shares) , Rs. 14.50 (2,32,362 Shares) and Rs. 20.85 ( 3,56,991 Shares) per share.

The Company has received a Certificate from the Statutory Auditors, M/s. MGB & Co., LLP, Chartered Accountants, confirming that the Scheme has been implemented in accordance with SEBI Guidelines and the resolution passed by the shareholders. The Certificate shall be placed at the ensuing Annual General Meeting and a copy of the same shall be available for inspection at the Registered Office of the Company on all working days (except Saturdays) between 2.00 p.m. to. 5.00 p.m., up to the date of ensuing Annual General Meeting.

SUBSIDIARY COMPANY

Your company has one wholly owned subsidiary, namely, Digital Ventures Private Limited.

No other Subsidiary / Joint-venture was formed or divested during the year under review. In compliance with Section 129 of the Act, a statement containing requisite details including financial highlights of the operations of the aforesaid Subsidiary Company is annexed to this report.

In accordance with Accounting Standard AS 21 - Consolidated Financial Statements read with Accounting Standard AS 23 - Accounting for Investments in Associates, and Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

CORPORATE GOVERNANCE & POLICIES

Your Company is in compliance with the Corporate Governance requirements mentioned under Clause 49 of the Listing Agreement. A Report on Corporate Governance as stipulated under the Listing Agreement(s) with the Stock Exchanges as also a Management Discussion and Analysis Report forms part of the Annual Report. Certificate from the Statutory Auditors of the Company, M/s MGB & Co LLP, Chartered Accountants, confirming compliance with the provisions of Corporate Governance as stipulated in Clause 49, is annexed to the said Corporate Governance Report.

In compliance with the requirements of the Companies Act, 2013, the Nomination and Remuneration Committee of the Board had fixed criteria for nominating a person on the Board which, inter alia include desired size and composition of the Board, age limit, qualification/ experience, areas of expertise and independence of individual. Your Company has also adopted a Remuneration Policy, salient features whereof is annexed to this report.

Your Board had in accordance with the requirements of Companies Act, 2013 and Clause 49 of the Listing Agreement, adopted new policies including Related Party Transaction Policy, and amended existing Whistle Blower and Vigil Mechanism Policy in line with the amended requirements. These policies are available on the website of the Company www.zeelearn.com.

CORPORATE SOCIAL RESPONSIBILITY

As responsible citizen, your Company believes that a Business cannot succeed in a society that fails and therefore it is imperative for business houses, to invest in the future by taking part in CSR activities. As part of CSR activity, the Company has been providing School Management Services under Public Private Partnership to selected schools managed by Gujarat State Tribal Development Residential Educational and Institutional Society under the Eklavya Model Residential School project of Government of Gujarat. Additionally, the Company regularly organizes various Education awareness events / programs for the various strata of the Society.

During the year, your Company undertook many initiatives at Mount Litera Zee School to educate and connect with the local communities around the school and created various campaign to support various causes. Initiative such as 'Yoga Day" raised awareness towards 'Importance of daily exercise'. Besides these, the schools also conducted various events such as Tree plantation activities, Swatch BharatAbhiyan, World Population, distribution of Bins in the society, Human right programmes, etc. in their local communities.

In continuation to the I Care initiative-this year too OMEP India has led 'I Care' program across the country sensitizing on Anti Child Abuse and Neglect. This year the program extended to schools apart from preschools. The 'I care' campaign is part of a national movement to change the way we think about prevention of child abuse.

As part of its CSR activity, Zee Institute of Creative Arts (ZICA), Noida center run by the franchisee, has partnered with two NGO's namely Prerna Niketan Sangh & Deepalaya to provide free creative course scholarship for the underprivileged students. Through this initiative, ZICAin association with Prerna Niketan Sangh & Deepalaya will provide scholarship to eligible students to 100% of course fees. Prerna Niketan Sangh is registered with Delhi Government and is working for physically challenged children since 1998.

Further, as your Company has made net profit of Rs. 9.62 Cr in FY 2014-15, Section 135 of the Companies Act, 2013 and Listing agreement of the Stock Exchanges has become applicable which specifies constitution of a Corporate Social Responsibility Committee of the Board ("CSR Committee"). Accordingly, your Company will constitute ("CSR Committee") in F.Y. 2015-16.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Your Board comprises of 5 Directors including 3 Independent Directors. Independent Directors provide their declarations both at the time of appointment and annually confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. During FY 2015 your Board met 6 (six) times details of which are available in Corporate Governance Report annexed to this report.

Mr. Subodh Kumar, Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible he has offered himself for re-appointment. Your Board recommends his re-appointment.

In compliance with the requirements of Section 203 of the Companies Act, 2013, Mr. K V S Seshasai, Chief Executive Officer, Mr. Umesh Pradhan, Chief Financial Officer & Mr. Samir Raval, Compliance Officer & Company Secretary of the Company were nominated as Key Managerial personnel.

BOARD EVALUATION

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated. Based on such report of the meeting of Independent Directors and taking into account the views of executive directors and non- executive directors the Board had evaluated its performance on various parameters such as Board composition and structure, effectiveness of board processes, effectiveness of flow of information, contributions from each Directors, etc.

AUDITORS

STATUTORY AUDITOR

M/s. MGB & Co., LLP., Chartered Accountants, Mumbai having firm registration No. 101169W/W-100035 holds office until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment.

Your Company has received confirmation from the Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules 2014. Your Board is of the opinion that continuation of M/s. MGB & Co., LLP, as Statutory Auditors during FY 2015-16 will be in the best interests of the Company and therefore, Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting till next Annual General Meeting at remuneration be decided by the Board.

COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, amended rules, 2014, the cost audit records maintained by the Company in respect of its education services, other than such similar services falling under philanthropy or as part of social spend which do not form part of any business is required to be Audited.

Your Directors had, on the recommendation of the Audit Committee and on ratification of its Members appointed M/s. V. V. & Associates, Cost Auditor having Firm registration No. 000515 to audit the cost accounts of the Company forthe financial year 2015-16.

SECRETARIAL AUDITOR

During the year, Secretarial Audit was carried out by Mrs. Mita Sanghavi, Practising Company Secretary in compliance with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DISCLOSURES

i. Particulars of loans, guarantees and investments:

Particulars of loans, guarantees and investments made by the Company required under Section 186 (4) of the Companies Act, 2013 are contained in Note No. 29 to the Standalone Financial Statements.

ii. Transactions with Related Parties:

None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Information on material transactions with related parties pursuant to Section 134(3)(h) of the Act, read with Rule 8(2) of the

Companies (Accounts) Rules, 2014, in form AOC-2 is annexed to this report.

iii. Deposits:

Your Company has not accepted any public deposits and as such no amount on account of principal or interest on public deposits under Section 73 of the Companies Act, 2013, read with Companies (Acceptance of Deposits) Rules, 2014, was outstanding as on the date of the Balance Sheet.

iv. Extract of Annual Return:

The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with the Companies (Management & Administration) Rules, 2014 is annexed to this report.

v. Sexual Harassment:

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. During the year under review one (1) complaint on sexual harassment was received and it has been resolved as perthe provisions of the Act.

vi. Regulatory Orders:

No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company's operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is engaged in the business of delivering learning solutions and training to entire spectrum of the society from toddler to teens through its multiple products. Since these activities do not involve any manufacturing activity, most of the information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is not applicable.

However, the information as applicable are given hereunder:

Conservation of Energy:

(i) steps taken or impact on conservation of energy

(ii) steps taken by the company for utilizing alternate sources of energy

(iii) capital investment on energy conservation equipments

Your Company, being a service provider, requires minimal energy consumption and every endeavor has been made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.

Technology Absorption:

(i) the efforts made towards technology absorption

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution

(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) -

(a) the details of technology imported

(b) the year of import

(c) whether the technology been fully absorbed

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof

(iv) the expenditure incurred on Research and Development

In its endeavor to deliver the best to its users and business partners, yoi Company has been constantly active in harnessing and tapping the late: and best technology in the industry.

FOREIGN EXCHANGE EARNING AND OUTGO:

During the year under review, there were no Foreign Exchange Earnings and the particulars of Foreign Exchange outgo is given in Note no. 34 of the Notes to Accounts forming part of the AnnualAccounts.

PARTICULARS OF EMPLOYEES

Requisite disclosures in terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 along with statement showing names and other particulars of the employees drawing remuneration in excess of the limits prescribed underthe said rules is annexed to this report.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to place on record their appreciation for the dedication and commitment of employees shown at all levels, Franchisees and Business Partners that have contributed to the success of your Company. Your Directors also express their gratitude for the valuable support and co-operation received from the Central and State Governments including Ministry of Human Resource Development and other stakeholders including Bankers, Financial Institutions, Investors, Service Providers as well as regulatory and government authorities.

For and on behalf of the Board Place: Mumbai Subodh Kumar Date : May 27, 2015 Chairman


Mar 31, 2013

To The Members of Zee Learn Limited

The Directors take pleasure in presenting the Third Annual Report of the Company together with Audited Financial Statements for the year ended March 31, 2013.

FINANCIAL PERFORMANCE

(Rs.in lacs)

For the year For the year Particulars ended March ended March 31,2013 31, 2012

Revenue from Operations 10,007.76 6,100.29

Other Income 62.32 90.95

Total Income 10,070.07 6,191.24

Total Expenses 10,853.84 8,275.54

Operating Proft/Loss (783.77) (2,084.30)

Less: Finance Cost 564.05 354.75

Less: Depreciation 642.00 302.05

Proft/Loss before Tax (1,989.81) (2,741.10)

Provision for Taxation (Net) 132.54 16.81

Proft/Loss after Tax (2,122.35) (2,757.90)

Balance Carried To Balance Sheet (2,122.35) (2,757.90)

DIVIDEND

In view of losses during the year, your Directors have not recommended any dividend on Equity Shares for the year under review.

BUSINESS OVERVIEW

Performance of your Company during Financial Year 2012-13 is on the back of over 73,000 enrolments in Kidzee, over 14,000 enrolments in Mount Litera Zee Schools, 1,960 enrolments in Zee Institute of Creative Arts (ZICA) and 450 enrolments in Zee Institute of Media Arts (ZIMA). Your Company also added 325 new Kidzee franchisees, 30 new Mount Litera Zee School franchisees, 4 new Company managed Mount Litera Zee Schools during the year under review. In school solution business, your Company changed the business model of BrainCafe Science to make the program more effective and proftable. During the year under review, 95 schools were signed under the new model of BrainCafé Science.

Your Company continues to be the largest chain of pre- schools and one of the fastest growing K-12 school chains in India.

SUBSIDIARY COMPANY

Statement pursuant to Section 212 of the Companies Act, 1956 in respect of the wholly owned subsidiary Digital Ventures Private Limited is attached herewith and forms part of this report.

In accordance with Accounting Standard AS 21 - Consolidated Financial Statements read with Accounting Standard AS 23 - Accounting for Investments in Associates and Accounting Standard AS 27 - Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements forms part of this Annual Report.

Your Board has decided to avail the general exemption granted by Ministry of Corporate Affairs from complying with Section 212(8) of the Companies Act, 1956 and accordingly the fnancial statements of the wholly owned subsidiary Digital Ventures Private Limited for the fnancial year ended March 31, 2013 is not being attached with this Annual Report. Requisite fnancial highlight of the said subsidiary is annexed to this Report and the audited Annual Accounts and related information of the subsidiary will be made available upon request or for inspection at the registered offce, by any shareholder of the Company.

NON-CONVERTIBLE DEBENTURES & CREDIT RATING

During the year under review, second tranche of 12% Secured Redeemable Non-Convertible Debentures (''SRNCD''s) of Rs50 Crores, listed on Wholesale Debt Market Segment of National Stock Exchange of India Ltd. (NSE), was redeemed as per the terms of issue. As at March 31, 2013, SRNCD''s of Rs 25 Crores are outstanding and listed on Wholesale Debt Market segment of NSE.

Credit Analysis & Research Limited (CARE) has reaffrmed the rating of ''CARE AA (SO)'', assigned to the SRNCD''s issued by the Company and the said rating denotes high degree of safety for timely servicing of debt obligation and carries very low credit risk.

GLOBAL DEPOSITORY RECEIPTS

Pursuant to Members approval at the Extra-ordinary General Meeting held on October 19, 2011, your Company had, subsequent to March 31, 2013, issued 56,17,977 Global Depository Receipts (GDRs) to Overseas investors at an issue price of US$ 3.56 per GDR, representing 5,61,79,770 Equity

Shares of Rs 1 each of the Company (each GDR representing 10 Equity Shares). The allotment of the GDRs and underlying Equity Shares was made at an issue price of Rs 19.50 Per Equity Share, as per the pricing formula prescribed under Clause 5 (4) (D) of the Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Mechanism) Scheme, 1993. The GDRs are listed at the Luxembourg Stock Exchange.

Consequent to said GDR issuance, the paid-up Share Capital of the Company stand increased to Rs 31,91,90,019 comprising of 31,91,90,019 Equity Shares ofRs 1 each.

EMPLOYEES STOCK OPTION SCHEME

Your Company has implemented an Employee Stock Option Scheme called ZLL ESOP-2010, in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines) for grant of stock options to its eligible employees. The Remuneration Committee of the Board administers and monitors the Scheme. The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2013 are provided in the Annexure I to this report.

During the year under review, no Stock Options were granted. However, your Company had issued and allotted 2,71,650 Equity Shares upon exercise of equivalent number of Stock Options by the employees at Option price of Rs 26.05 (2,23,900 Shares) and Rs 14.50 ( 47,750 Shares) per share.

The Company has received a Certifcate from the Statutory Auditors, M/s. MGB & Co., Chartered Accountants, confrming that the Scheme has been implemented in accordance with SEBI Guidelines and the resolution passed by the shareholders. The Certifcate shall be placed at the ensuing Annual General Meeting and a copy of the same shall be available for inspection at the Registered Offce of the Company on all working days (except Saturdays) between 2.00 p.m. to. 5.00 p.m., up to the date of ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out in the Listing Agreement with the Stock Exchanges. Report on Corporate Governance as stipulated under the Listing Agreements) with the Stock Exchanges as also the Management Discussions and Analysis Report forms part of the Annual Report.

Certifcate from the Statutory Auditors of the Company M/s MGB & Co., Chartered Accountants, Mumbai, confrming compliance with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreements), is annexed to the said Corporate Governance Report.

DIRECTORS

Mr. Sumeet Mehta, Whole-time Director and CEO of the Company resigned with effect from July 25, 2012. Your Board places on record its appreciation for the contributions made by Mr. Sumeet Mehta during his tenure as Whole-time Director of the Company.

Mr. Subodh Kumar, IAS (Retd.) was appointed as an Additional Director, with effect from May 29, 2013. Pursuant to the provisions of Section 260 of the Companies Act, 1956, Mr. Subodh Kumar holds offce up to the conclusion of the ensuing Annual General Meeting of the Company. The Company has received appropriate notice from a Member under Section 257 of the Companies Act, 1956, along with requisite deposit, proposing the candidature of Mr. Subodh Kumar for the offce of Director, liable to retire by rotation. Your Board recommends appointment of Mr. Subodh Kumar as Director of the Company.

As per the provisions of the Companies Act, 1956 read with Article 97 of the Articles of Association, Mr. Surjit Banga, Independent Director, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Brief Profle of the Directors proposed to be appointed / re- appointed at the ensuing Annual General Meeting has been included in the Report on the Corporate Governance forming part of the Annual Report.

In compliance with Section 269 of the Companies Act, 1956, your Board had appointed Mr. Umesh Pradhan, Chief Financial Offcer of the Company as a Manager for a period of three years with effect from April 1, 2013. A proposal seeking Members approval for appointment and payment of remuneration to Mr. Umesh Pradhan as Manager of the Company forms part of the Notice of ensuing Annual General Meeting.

AUDITORS

M/s. MGB & Co., Chartered Accountants, the Statutory Auditors of the Company having frm registration No. 101169W hold offce until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from them to the effect that their re-appointment, if made, would be in accordance with the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualifed for reappointment within the meaning of Section 226 of the said Act.

CORPORATE SOCIAL RESPONSIBILITY

Your Company believes that Corporate Social Responsibility (CSR) is about the integration of social, environmental and economic considerations into the decision-making structures and processes of business. It is about using innovation to fnd creative and value-added solutions to societal and environmental challenges. It is about engaging shareholders and other stakeholders and collaborating with them to more effectively manage potential risks and build credibility and trust in society. Ultimately, it is about delivering improved shareholder value, providing enhanced goods and services for customers, building trust and credibility in the society in which the business operates, and becoming more sustainable over the longer term.

As part of its CSR activity, Zee Institute of Creative Arts (ZICA), Zee Learn''s animation institutes, announced the addition of their new block in the Noida center. ZICA has partnered with two NGO''s namely: Prerna Niketan Sangh & Deepalaya to provide free creative course scholarship for the underprivileged students. The scholarship will serve as a gateway for underprivileged students keen to make a career in the exciting and unbounded world of animation.

Through this initiative, ZICA in association with Prerna Niketan Sangh & Deepalaya will provide scholarship up to 100%, applicable to ZICA center in Noida. Prerna Niketan Sangh is registered with Delhi Government and is working for physically challenged children since 1998. Deepalaya is an NGO working on issues affecting the urban and rural poor, with a special focus on children.

The scholarship would be based on frst come – frst serve basis. To be eligible for the creative course scholarship students need to register at the ZICA centre and take a test, called the "Creativity Test". Students will be awarded scholarship based on their performance in this test. Under this scholarship one can choose from an array of creative courses available at ZICA.

PUBLIC DEPOSITS

During the year under review, your Company has neither accepted nor renewed any deposits within the meaning of Section 58A of the Companies Act, 1956 and rules made there under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company is engaged in the business of delivering learning solutions and training to entire spectrum of the society from toddler to teens through its multiple products. Since these activities do not involve any manufacturing activity, most of the information required to be provided under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is not applicable.

However the information as applicable are given hereunder:

I. Energy Conservation

Your Company being a service provider requires minimal energy consumption and every endeavor has been made to ensure optimal use of energy and avoid wastages and conserve energy as far as possible.

II. Technology Absorption

In its endeavor to deliver the best to its users and business partners, your Company has been constantly active in harnessing and tapping best technology in the industry.

III. Foreign Exchange Earning and Outgo

During the year under review, Foreign Exchange Earnings were Nil and the particulars of Foreign Exchange out go is given in Note number 34 of the Notes to Accounts forming part of the Annual Accounts.

PARTICULARS OF EMPLOYEES

During the year under review, no employee, other than Mr. Sumeet Mehta, Whole-time Director of the Company till July 24, 2012, drew remuneration in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended. Requisite details of remuneration paid to Mr. Sumeet Mehta is as detailed herein:

Name, Designation & Age Sumeet Mehta, Whole-time

Director, 37

Total Remuneration Rs 77,75,489

Qualifcation MBA (IIM, Ahmedabad)

Total Experience & Date of 14 Years, September 1, 2010 Joining

Previous Employment Zee Entertainment

Enterprises Ltd.

Total remuneration includes Salary, Bonus, Incentive, Allowances, Leave Travel Assistance, Medical Benefts, Gratuity, Company''s contribution to Provident Fund and other perquisites and benefts valued as per the Income Tax Act, 1961.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, in relation to the Annual Financial Statements for the Financial Year 2012-2013, your Directors confrm the following:

a) The Financial Statements comprising of the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss for the year ended on that date have been prepared in the revised format of Schedule VI of the Companies Act, 1956 on a going concern and on the accrual basis and in the preparation of these Financial Statements, applicable accounting standards have been followed and there are no material departures;

b) Accounting policies selected were applied consistently and the judgments and estimates related to the fnancial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the loss of the Company for the year ended on that date; and

c) Proper and suffcient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to place on record their appreciation for the dedication and commitment of employees shown at all levels, Franchisees and Business Partners that have contributed to the success of your Company. Your Directors also express their gratitude for the valuable support and co-operation received from the Central and State Governments including Ministry of Human Resource Development and other stakeholders including Bankers, Financial Institutions, Investors, Service Providers as well as regulatory and government authorities.

For and on behalf of the Board

Place : Mumbai Surjit Banga Himanshu Mody

Date : 29 May, 2013 (Director) (Director)


Mar 31, 2012

To,The Members of Zee Learn Limited

The Directors take pleasure in presenting the Second Annual Report of the Company together with Audited Statement of Accounts for the year ended March 31, 2012.

FINANCIAL PERFORMANCE

(Amount in Rs.)

Particulars For the year ended For the priod ended March 31, 2012 March 31, 2011

Revenue from Operations 610,029,164 427,477,750

Other Income 9,095,113 9,506,471

Total Income 619,124,277 436,984,221

Total Expenses 827,800,170 402,756,614

Operating Profit /(Loss) (208,675,892) 34,227,607

Less: Finance Cost 35,228,379 1,278,814

Less: Depreciation 30,205,273 7,527,363

Profit /(Loss) before Tax (274,109,545) 25,421,430

Provision for Taxation (Net) 1,680,847 6,900,745

Profit /(Loss) after Tax (275,790,392) 18,520,685

Balance Carried To Balance Sheet (257,269,707) 18,520,685

DIVIDEND

In view of losses during the year, your Directors have not recommended any dividend on Equity Shares for the year under review.

BUSINESS OVERVIEW

Performance of your Company during Financial Year 2011-12 is on the back of over 60,000 enrolments in KidZee, over 7,000 enrolments in Mount Litera Zee Schools, 1,100 enrolments in Zee Institute of Creative Arts (ZICA) and 351 enrolments in Zee Institute of Media Arts (ZIMA). Your Company also added 310 new KidZee centers, 28 new Mount Litera Zee Schools, 4 new ZICA centers into its franchise system during the year under review. Your Company entered the School Solutions segment with Zee Learn School Innovations (ZLSI), which offers Braincafe (earlier Gakken) to schools that want to improve the performance and understanding of their students in Science. During the year under review 370 schools signed up for Braincafe .

Your Company has planned to step into the digital sphere by being capable of catering to the modern and immediate need to serve willing parents and children on an immediate basis with applications for various mobile devices and computers too. On this note, your Company has been in talks with various leading industry player(s) for potential acquisitions and joint ventures.

Your Company's performance during the year makes it the largest chain of preschools in India and one of the fastest growing K-12 school chains for 2 years in a row.

SHARE CAPITAL ACY- VESTING OF UNDERTAKING PURSUANT TO THE SCHEME OF AMALGAMATION

During the year under review, the Authorised Share Capital of the Company was increased with your approval from Rs. 15,00,00,000/- (Rupees Fifteen Crores only) divided into 15,00,00,000 (Fifteen Crores) Equity Shares of Rs. 1/- (Rupee One only) each to Rs. 30,00,00,000/- (Rupees Thirty Crores only) divided into 30,00,00,000 (Thirty Crores) Equity Shares of Rs. 1/- (Rupee One only) each with a view to facilitate issuance of Equity Shares in accordance with the Scheme of Amalgamation for merger of Essel Entertainment Media Limited (EEML) with the Company.

The Scheme of Amalgamation for merger of EEML with the Company approved by the Members at the Meeting held on March 28, 2011, became effective on June 30, 2011, upon filing of Order dated June 17, 2011 issued by Hon'ble Bombay High Court approving the Scheme of Amalgamation. Consequently, the entire undertaking of EEML along with all its assets and liabilities including its investment in wholly owned subsidiary Digital Ventures Private Limited as on March 31, 2011 (Appointed Date) got vested on the Company and accordingly Digital Ventures Private Limited became wholly owned subsidiary of the Company. In accordance with the said Scheme of Amalgamation, your Company had on July 1, 2011 issued 14,00,00,000 (Fourteen Crores) Equity Shares of Rs. 1/- (Rupee One only) each of the Company for 70,00,00,000 (Seventy Crores) Equity Shares held by the shareholders of EEML i.e. in the ratio of 1 (One) Equity Share of Rs. 1/- (Rupee One only) each of the Company for every 5 (Five) Equity Shares of Rs. 1/- (Rupee One only) each held in EEML.

Further, as per Clause 10.3 of the said Scheme, the Authorised Share Capital of the Company increased from Rs. 30,00,00,000 /- (Rupees Thirty Crores only) divided into 30,00,00,000 (Thirty Crores) Equity Shares of Rs. 1/- (Rupee One only) each to Rs. 100,00,00,000/- (Rupees One Hundred Crores only) divided into 100,00,00,000 (One Hundred Crores) Equity Shares of Rs. 1/- (Rupee One only) each upon combination of Authorised Share Capital of EEML with Authorised Share Capital of the Company.

SUBSIDIARY COMPANY

Consequent upon effectiveness of the Scheme of Amalgamation for merger of Essel Entertainment Media Limited (EEML) with the Company, Digital Ventures Private Limited a wholly owned subsidiary of EEML became the wholly owned subsidiary of the Company with effect from June 30, 2011.

The Ministry of Corporate Affairs, Government of India vide its circular dated February 8, 2011 has granted general exemption to companies from complying with Section 212(8) of the Companies Act, 1956, provided such companies publish the audited consolidated financial statements in the Annual Report. Your Board in its meeting held on March 28, 2012 has decided to avail the said general exemption from applicability of provisions of Section 212 of the Companies Act, 1956 and accordingly, the annual accounts of the subsidiary of the Company for the financial year ended March 31, 2012 are not being attached with the Annual Report of the Company but certain financial highlights of the subsidiary are disclosed in the Annual Report, as part of the Consolidated Financial Statements. The audited Annual Accounts and related information of the subsidiary will be made available upon request or for inspection at the registered office, by any shareholder of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS 21 on Consolidated Financial Statements read with Accounting Standard AS 23 on Accounting for Investments in Associates and Accounting Standard AS 27 on Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

NON-CONVERTIBLE DEBENTURES ACY- CREDIT RATING

Pursuant to the Composite Scheme of Amalgamation and Arrangement between ETC Networks Limited ('ETC'), Zee Entertainment Enterprises Limited ('ZEEL'), Zee Learn Limited ('ZLL or the Company') and their respective Shareholders and Creditors, 500 Nos. of 12 ACU- Secured Redeemable Non-Convertible Debentures (SRNCD's) each of Rs. 10 lacs aggregating to Rs. 50,00,00,000/- (Rupees Fifty Crores only) issued by the erstwhile ETC Networks Ltd, were transferred to and vested in the Company. The said SRNCD's are listed on Wholesale Debt Market Segment of the National Stock Exchange of India Ltd.

During the year, out of these SRNCD's, first tranche of Rs. 12.50 Crores i.e. 125 SRNCD's each of Rs. 10 lacs was redeemed by the Company in January, 2012.

Credit Analysis ACY- Research Limited (CARE) has reaffirmed the rating of 'CARE AA (SO)', assigned to the SRNCD's issued by the Company and the said rating denotes high degree of safety for timely servicing of debt obligation and carries very low credit risk.

EMPLOYEES STOCK OPTION SCHEME

Your Company has implemented an Employee Stock Option Scheme called ZLL ESOP-2010, in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines) for grant of stock options to its eligible employees. The Remuneration Committee of the Board administers and monitors the Scheme.

During the year under review, the Remuneration Committee had granted 16,09,700 Stock Options (including 60,000 Stock Options granted to the Non-Executive Independent Directors) convertible into equivalent number of equity shares of Rs. 1/- each of the Company. Applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2012 are annexed herewith and forms part of this report.

As most of Educational Infrastructure Projects of the Company are executed by its Subsidiary, a proposal seeking Member's approval for extending benefits of the ESOP Scheme to the Employees and / or Directors of present and future Subsidiary / Holding Company (ies) of the Company forms part of Notice of ensuing Annual General Meeting of the Company.

The Company has received a Certificate from the Statutory Auditors, M/s. MGB ACY- Co., Chartered Accountants, confirming that the Scheme has been implemented in accordance with SEBI Guidelines and the resolution passed by the shareholders. The Certificate shall be placed at the ensuing Annual General Meeting and a copy of the same shall be available for inspection at the Registered Office of the Company on all working days (except Saturdays) between 2.00 p.m. to. 5.00 p.m., up to the date of ensuing Annual General Meeting.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out in the Listing Agreement with the Stock Exchanges. Report on Corporate Governance as stipulated under the Listing Agreement(s) with the Stock Exchanges as also the Management Discussions and Analysis Report forms part of the Annual Report.

Certificate from the Statutory Auditors of the Company M/s MGB ACY- Co., Chartered Accountants, Mumbai, confirming compliance with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement(s), is annexed to the said Corporate Governance Report.

DIRECTORS

As per the provisions of the Companies Act, 1956 read with Article 97 of the Articles of Association, Mr. Himanshu Mody, one of the first Directors, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Brief Profile of Director proposed to be re-appointed at the ensuing Annual General Meeting has been included in the Report on the Corporate Governance forming part of the Annual Report.

AUDITORS

M/s. MGB ACY- Co., Chartered Accountants, the Statutory Auditors of the Company having firm registration No. 101169W hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from them to the effect that their re-appointment, if made, would be in accordance with the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act..

CORPORATE SOCIAL RESPONSIBILITY

As a responsible citizen, your Company believes that a Business cannot succeed in a society that fails and therefore it is imperative for business houses, to invest in the future by taking part in CSR activities. Being engaged in the education business, CSR activity forms part of every business decision of the Company. As part of CSR activity, the Company through Zee Learn Education Society has been providing School Management Services under Public Private Partnership to the

Schools managed by Gujarat State Tribal Development Residential Educational and Institutional Society under the Eklavya Model Residential School project of Government of Gujarat. Additionally the Company regularly organizes various Education awareness events / programs for the various strata of the Society.

The 'I Care' campaign is part of a national movement led by your Company with the message, 'Let us create a safe and nurturing environment for our children, and an abuse free world for today's children.' As part of this campaign, the employees and associates of the Company tied blue ribbons on individual's wrist and communicated the message on significance of an abuse free environment and held placards reading the messages against child abuse and distributed leaflets on preventive measures against child abuse.

PUBLIC DEPOSITS

During the year under review, your Company has neither accepted nor renewed any deposits within the meaning of Section 58A of the Companies Act, 1956 and rules made there under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company is engaged in the business of delivering learning solutions and training to entire spectrum of the society from toddler to teens through its multiple products. Since these activities do not involve any manufacturing activity, most of the information required to be provided under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is not applicable.

However the information as applicable are given hereunder:

I. Energy Conservation

Your Company being a service provider, requires minimal energy consumption and every endeavor has been made to ensure optimal use of energy and avoid wastages and conserve energy as far as possible.

II. Technology Absorption:

In its endeavor to deliver the best to its users and business partners, your Company has been constantly active in harnessing and tapping and best technology in the industry.

III. Foreign Exchange Earning and Outgo:

During the year under review, Foreign Exchange Earnings were Nil and the particulars of Foreign Exchange outgo is given in Note Number 35 of the Notes to Accounts forming part of the Annual Accounts.

PARTICULARS OF EMPLOYEES

No Employee, other than Mr. Sumeet Mehta, Whole-time Director of the Company draw remuneration in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended. Requisite details of remuneration paid to Mr. Sumeet Mehta (from April 1, 2011 to March 31, 2012), pursuant to the said provisions, is as detailed herein:

Name, Designation ACY- Age Sumeet Mehta, Whole-time Director, 36

Total Remuneration Rs.1,07,64,065

Qualification MBA (IIM, Ahmedabad)

Total Experience ACY- Date of Joining 13 Years, September 1, 2010

Previous Employment Zee Entertainment Enterprises Ltd.

Total remuneration includes Salary, Bonus, Incentive, Allowances, Leave Travel Assistance, Medical Benefits, Gratuity, Company's contribution to Provident Fund and other perquisites and benefits valued as per the Income Tax Act, 1961.

DISCLOSURE PURSUANT TO CLAUSE 5A OF THE LISTING AGREEMENT

As per Clause 5A of the Listing Agreement inserted as per SEBI notification no. SEBI/CFD/DIL/LA/1/2009/24/04 dated April 24, 2009, the details in respect of the shares, which were issued pursuant to the Composite Scheme of Amalgamation and Arrangement and lying in the suspense account till March 31, 2012 is as under:

Description Number of Number of hareholders Equity Shares

Aggregate number of shareholders and the outstanding shares in the suspense 231 44645 account post allotment and issuance on October 14, 2010.

Number of shareholders who approached the - - Company for transfer of shares from suspense account till March 31, 2012.

Number of shareholders to whom shares were - - transferred from the Suspense account till March 31, 2012.

Aggregate number of shareholders and the outstanding shares in the suspense account lying as on March 31, 2012. 231 44645

The voting rights on the shares outstanding in the suspense account as on March 31, 2012 shall remain frozen till the rightful owner of such shares claims the shares. In compliance with the said requirements, these shares will be transferred into one folio in the name of 'Unclaimed Suspense Account' in due course.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, and based on representations received from the operating management, the Directors hereby confirm that: -

a) in the preparation of the Annual Accounts for the year ended March 31, 2012, the applicable Accounting Standards have been followed and there are no material departures ADs-

b) they have selected such accounting policies in consultation with the statutory auditors 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 for the year ended March 31, 2012 and the loss of the Company for that period ADs-

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ADs- and

d) they have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to place on record their appreciation for the dedication and commitment of employees shown at all levels, Franchisees and Business Partners that have contributed to the success of your Company. Your Directors also express their gratitude for the valuable support and co-operation received from the Central and State Governments including Ministry of Human Resource Development and other stakeholders including Bankers, Financial Institutions, Investors, Service Providers as well as regulatory and government authorities.

For and on behalf of the Board

Place : Mumbai Sumeet Mehta Himanshu Mody

Date : May 16, 2012 Whole-time Director Chairman


Mar 31, 2011

The Directors take pleasure in presenting the First Annual Report of the Company together with Audited Statement of Accounts for the period from January 4, 2010 being the date of incorporation of the Company, up to March 31, 2011.

FINANCIAL PERFORMANCE

(Amount in Rs.) Particulars For the period ended march 31, 2011

Sales & Services 438,981,035

Other Income 10,880,542

Total Income 449,861,577

Total Expenses 415,457,629

Operating Profit 34,403,948

Less: Finance Cost 1,455,155

Less: Depreciation 7,527,362

Profit before tax 25,421,431

Provision for Taxation (Net) 6,900,745

Profit after tax 18,520,686

Balance Carried to Balance Sheet 18,520,686

DIVIDED

With a view to conserve resources for funding any future business requirements and expansion plans, your Directors have not recommended any dividend on Equity Shares for the period under review.

SHARE CAPITAL & VESTING OF EDUCATION BUSINESS UNDERTAKING PURSUANT TO THE SCHEME

During the period under review, the Authorised Share Capital of the Company was sub-divided & increased from Rs. 5,00,000/- (Rupees Five Lacs only) divided into 50,000 (Fifty Thousand) Equity Shares of Rs. 10/- (Rupees Ten only) each to Rs. 15,00,00,000/- (Rupees Fifteen Crores only) divided into 15,00,00,000 (Fifteen Crores) Equity Shares of Rs. 1/- (Rupee one) each.

Your Company was incorporated as a special purpose vehicle with a view to acquire the Education Business Undertaking demerged from Zee Entertainment Enterprises Limited (ZEEL), pursuant to a Composite Scheme of Amalgamation and Arrangement approved by Honble Bombay High Court vide order passed on July 16, 2010. The said Scheme became effective from August 30, 2010 and consequently all assets and liabilities of Education Business Undertaking of ZEEL as at April 1, 2010 (Appointed Date) were transferred to and vested on the Company with effect from Effective Date. In pursuance of the said Demerger, the Company had allotted and issued 12,22,38,599 (Twelve Crores Twenty Two Lacs Thirty Eight Thousand Five Hundred Ninety Nine) Equity Shares of Rs. 1/- each of the Company to the shareholders of ZEEL, in the ratio of 1 (one) Equity Share of Rs. 1/- each of the Company for every 4 (four) Equity Shares of Rs. 1/- each held in ZEEL. Thereafter the entire issued Equity Shares of the Company were listed and admitted for trading on the Bombay Stock Exchange Ltd. and the National Stock Exchange of India Ltd. with effect from December 20, 2010.

BUSINESS OVERVIEW

During the period under review, your Company earned revenue of Rs. 43.89 crores and Net Profit after tax of Rs. 1.85 crores. This performance is on the back of over 46,500 enrolments in Kidzee, over 3,700 enrolments in Mount Litera Zee Schools, 1,263 enrolments in Zee Institute of Creative Arts (ZICA) and 290 enrolments in Zee Institute of Media Arts (ZIMA). Your Company also added 206 new Kidzees, 33 new Mount Litera Zee Schools and 10 new ZICAs into its franchise system during the period under review. Your Company entered the School Solutions segment with Zee Learn School Innovations (ZLSI), which offers Zee Learn Gakken Science Academies (ZLGSA) to schools that want to improve the performance and understanding of their students in Science. During the period under review 51 schools signed up for ZLGSAs.

Your Companys performance during the period makes it the largest chain of preschools in India and one of the fastest growing K-12 school chains. With ZLGSA, your Company is the only organized Activity Based Learning solutions providers to schools in the country.

MERGER OF ESSEL ENTERTAINMENT MEDIA LIMITED WITH THE COMPANY

The Scheme of Amalgamation for merger of Essel Entertainment Media Limited (EEML) with the Company, approved by the Members at the Court Convened General Meeting held on March 28, 2011, awaits approval of Honble Bombay High Court. As per the said Scheme, EEML shall merge with the Company with effect from March 31, 2011 (Appointed Date). However pending receipt of final approval from Honble Bombay High Court, the effect of the Scheme of Amalgamation is not given in the financial statements for the period ended March 31, 2011. Details of Assets and Liabilities of EEML as at March 31, 2011, which will vest on the Company upon effectiveness of the Scheme of Amalgamation is given in Schedule 17B Note 2B of the Notes to Accounts. Upon approval of Honble Bombay High Court and the Scheme becoming effective, your Company would be required to issue 14,00,00,000 (Fourteen Crores) equity shares of Rs. 1/- each of the Company, to the shareholders of EEML, in ratio of 1 (one) Equity Share of Rs. 1/- each of the Company for every 5 (five) Equity Shares of Rs. 1/- each of EEML.

With a view to facilitate issuance of further Equity Shares in accordance with the Scheme of Amalgamation, your Directors have subject to your approval, approved a proposal for increase in Authorised Share Capital of the Company from Rs. 15,00,00,000/- (Rupees Fifteen Crores only) divided into 15,00,00,000 (Fifteen Crores) Equity Shares of Rs. 1/- each to Rs. 30,00,00,000/- (Rupees Thirty Crores) divided into 30,00,00,000 (Thirty Crores) Equity Shares of Rs. 1/- each. Requisite proposal seeking Members approval for the proposed increase in the Authorised Share Capital forms part of the Notice of ensuing Annual General Meeting.

CREDIT RATING AND VESTING OF NON-CONVERTIBLE DEBENTURES

Pursuant to the Composite Scheme of Amalgamation and Arrangement, the Non-Convertible Debentures (NCDs) of Rs. 50,00,00,000/- (Rupees Fifty Crores only) issued by the erstwhile ETC Networks Ltd. were transferred and vested on the Company. The said NCDs are listed on Wholesale Debt Market Segment of the National Stock Exchange of India Ltd.

Credit Analysis & Research Limited (CARE) has reaffirmed the rating of CARE AA (SO), assigned to the NCDs issued by the Company. Based on the said rating, the said NCDs are construed to offer high safety for timely servicing of debt obligation and carries very low credit risk.

EMPLOYEED STOCK OPTION SCHEME

As approved by the Members at the Extra-ordinary General Meeting of the Company held on October 13, 2010, your Company has implemented an Employee Stock Option Scheme called ZLL ESOP-2010, in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines) for grant of stock options to its eligible employees. The Remuneration Committee of the Board administers and monitors the Scheme.

During the period under review, the Remuneration Committee had pursuant to ZLL ESOP 2010, granted 11,07,000 Stock Options convertible into equivalent number of equity shares of Rs. 1/- each of the Company. The aforesaid grant includes 60,000 Stock Options granted to the Non-Executive Independent Directors of the Company. Applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2011 are annexed herewith and forms part of this report.

The Company has received a Certificate from the Statutory Auditors, M/s. MGB & Co., Chartered Accountants, confirming that the Scheme has been implemented in accordance with SEBI Guidelines and the resolution passed by the shareholders. The Certificate shall be placed at the ensuing Annual General Meeting and a copy of the same shall be available for inspection at the Registered Office of the Company on all working days (except Saturday and Sunday) between 2.00 p.m. to. 5.00 p.m., upto the date of Annual General Meeting.

DIRECTORS

As per Article 84 of the Articles of Association, Mr. Himanshu Mody, Dr. Manish Agarwal and Mr. Sumeet Mehta were appointed as First Directors of the Company with effect from the date of incorporation of the Company i.e. January 4, 2010. Thereafter upon vesting of Education Business Undertaking from Zee Entertainment Enterprises Ltd. pursuant to the Composite Scheme, your Board had approved appointment of Mr. Sumeet Mehta, the Whole-time Director & CEO of the Education Business Undertaking of erstwhile ETC Networks Ltd. as Whole-time Director of the Company for a period of 3 years with effect from September 1, 2010, and Mr. Surjit Banga as an Additional Director of the Company in the capacity of Independent Director with effect from September 1, 2010.

The Shareholders of the Company, at the Extra-ordinary General Meeting held on October 1, 2010 had approved the appointment of Mr. Surjit Banga as a Director and Mr. Sumeet Mehta as a Whole-time Director of the Company.

As per the provisions of the Companies Act, 1956 read with Article 97 of the Articles of Association, Dr. Manish Agarwal, one of the first Directors, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Brief Profile of all Directors including Directors proposed to be appointed/re-appointed at the ensuing Annual General Meeting has been included in the Report on the Corporate Governance forming part of the Annual Report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out in the Listing Agreement with the Stock Exchanges. Report on Corporate Governance as stipulated under the Listing Agreement(s) with the Stock Exchanges as also the Management Discussions and Analysis Report forms part of the Annual Report.

Certificate from the Statutory Auditors of the Company M/s. MGB & Co., Chartered Accountants, Mumbai, confirming compliance with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement(s), is annexed to the said Corporate Governance Report.

AUDITORS

M/s. MGB & Co., Chartered Accountants, the First Statutory Auditors of the Company having firm registration No. 101169W hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the limits specified under Section 224(1B) of the Companies Act, 1956.

GROUP

Pursuant to the communication received by the Company from the Promoters, the names of the Promoters and entities comprising ‘group for the purpose of Clause 3(1)(e) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, are disclosed in the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

As a responsible citizen, your Company believes that a Business cannot succeed in a society that fails and therefore it is imperative for business houses, to invest in the future by taking part in CSR activities. Being engaged in the education business, CSR activity forms part of every business decisions of the Company. As a part of CSR activity, the Company through Zee Learn Education Society has been providing School Management Services under Public Private Partnership to the Schools managed by Gujarat State Tribal Development Residential Educational and Institutional Society under the Eklavya Model Residential School project of Government of Gujarat. Additionally, the Company regularly organizes various Education awareness events/programs for the various sections of the Society.

PUBLIC DEPOSITS

During the period under review, your Company has neither accepted nor renewed any deposits within the meaning of Section 58A of the Companies Act, 1956 and rules made there under.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION and FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is engaged in the business of delivering learning solutions and training to entire spectrum of the society from toddler to teens through its multiple products. Since these activities do not involve any manufacturing activity, most of the information required to be provided under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is not applicable.

However, the information as applicable are given hereunder:

I. energy Conservation

Your Company being a service provider, requires minimal energy consumption and every endeavor has been made to ensure optimal use of energy and avoid wastages and conserve energy as far as possible.

II. technology absorption

In its endeavor to deliver the best to its users and business partners, your Company has been constantly active in harnessing and tapping and best technology in the industry.

III. Foreign exchange earning and Outgo

Particulars of foreign exchange earnings and outgo during the period under review is given in Schedule 17B Note 15(b) of the Notes to Accounts forming part of the Annual Accounts.

PARTICULARS OF EMPLOYEES

No Employee, other than Mr. Sumeet Mehta, Whole-time Director of the Company draw remuneration in excess of limits prescribed under the Companies (Particulars of Employees) Rules, 1975, as amended. Requisite details of remuneration paid to Mr. Sumeet Mehta (during the period from September 1, 2010 to March 31, 2011), pursuant to Section 217(2A) of

the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is as detailed herein:

Name, Designation & Age Sumeet Mehta, Whole-time Director, 35

Total Remuneration Rs. 39,47,880

Qualification MBA (IIM, Ahmedabad)

Total Experience & Date of Joining 12 Years, September 1, 2010

Previous Employment Zee Entertainment Enterprises Ltd.

Total remuneration includes Salary, Bonus, Incentive, Commission, Allowances, Leave Travel Assistance, Medical Benefits, Gratuity, Companys contribution to Provident Fund and other perquisites and benefits valued as per the Income Tax Act, 1961.

DISCLOSURE PURSUANT TO CLAUSE 5A OF THE LISTING AGREEMENT

As per Clause 5A of the Listing Agreement inserted as per SEBI notification no. SEBI/CFD/DIL/LA/1/2009/24/04 dated April 24, 2009, the details in respect of the shares, which were issued pursuant to the Composite Scheme of Amalgamation and Arrangement and lying in the suspense account, is as under:

Description Number of Number of shareholders equity Shares

Aggregate number of shareholders and the outstanding shares in the suspense 231 44,645 account post allotment and issuance on October 14, 2010

Number of shareholders who approached the Company for transfer of shares from - - suspense account till March 31, 2011

Number of shareholders to whom shares were transferred from the suspense - - account till March 31, 2011

Aggregate number of shareholders and the outstanding shares in the suspense 231 44,645 account lying as on March 31, 2011

The voting rights on the shares outstanding in the suspense account as on March 31, 2011 shall remain frozen till the rightful owner of such shares claims the shares. In compliance with the said requirements, these shares will be transferred into one folio in the name of Unclaimed Suspense Account in due course.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, and based on representations received from the operating management, the Directors hereby confirm that:

a) in the preparation of the Annual Accounts for the period ended March 31, 2011, the applicable Accounting Standards have been followed and here are no material departures;

b) they have selected such accounting policies in consultation with the statutory auditors 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 for the period ended March 31, 2011 and the profit of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) they have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to place on record their appreciation for the dedication and commitment of employees shown at all levels, Franchisees and Business Partners that have contributed to the success of your Company. Your Directors also express their gratitude for the valuable support and co-operation received from the Central and State Governments including Ministry of Human Resource Development and other stakeholders including Bankers, Financial Institutions, Investors, Service Providers as well as regulatory and government authorities.

For and on behalf of the Board

Sumeet mehta Surjit Banga Whole-time Director Director

Place : Mumbai Date : May 20, 2011