· of Association of the Company, Dr. Anil Naik retires by rotation as Director at the ensuing...

GREYCELLS EDUCATION LIMITED

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NOTICENOTICE is hereby given that the ANNUAL GENERAL MEETING of the shareholders of GREYCELLS EDUCATION LIMITED will be held at the Registered office of the Company at D-2, 1st Floor, Poddar Chambers, 126, Mathuradas Compound, N.M. Joshi Marg, Lower Parel (West), Mumbai – 400013 on Monday, September 30, 2013 at 9.30 a.m. to transact the following business:ORDINARY BUSINESS1. To receive, consider and adopt the Audited Balance Sheet as at 31st

March, 2013 and the Statement of Profit and Loss for the year ended on that date together with the Reports of the Directors’ and Auditors’ thereon.

2. To appoint a Director in place of Dr. Anil Naik, who retires by rotation and, being eligible, offers himself for re-appointment.

3. To appoint M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the retiring Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting on a remuneration to be fixed by the Board of Directors of the Company.

SPECIAL BUSINESS4. To consider and if thought fit, to pass with or without modification(s),

the following resolution as a Special Resolution : “RESOLVED THAT pursuant to the provisions of Section 314 (1B)

and all other applicable provisions, if any, of the Companies Act, 1956 read with Director’s Relatives (Office or Place of Profit) Rules, 2011 (including any statutory modification(s) or re-enactment thereof, for the time being in force), the consent of the members of the Company be and is hereby accorded for enhancing the compensation from ` 2,00,000/- to ` 2,50,000/- per month exclusive of all out-of-pocket expenses payable to M/s. Value Line Advisors Private Limited, as an advisor on allied matters and such other matter as may be assigned by the Company from time to time w.e.f. 1st April, 2013.

RESOLVED FURTHER THAT Board of Directors of the Company be and is hereby authorised to determine the components of compensation payable to M/s. Value Line Advisors Private Limited and further authorised to decide the compensation within the overall limits specified by the Central Government as amended from time to time, without being required to seek any further consent or approval of the members and modify the terms and conditions of appointment.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution and to deal in case of any doubts or difficulties, the Board of Directors be and are hereby authorised to do all such acts, deeds, matters and things and to give such directions as may be necessary, expedient, usual or proper and to settle any question or doubt that may arise in relation thereto or otherwise reconsider the matter with the changed circumstances, if any, from time to time as the Board in its absolute discretion as they may think fit and its decision shall be final and binding on all members and other interested persons.”

By Order of the Board of Directors

Place : Mumbai Dharmesh ParekhDate : 2nd August, 2013 Company Secretary

NOTES:1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING

IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. THE INSTRUMENT APPOINTING PROXY SHOULD HOWEVER BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

3. Members are requested to bring their copy of the Annual Report to the meeting.

4. The Register of Members & Share Transfer Books of the Company will remain closed from September 23, 2013 to September 30, 2013 (both days inclusive).

5. Member/s desirous of getting any information on the accounts and operations of the Company are requested to write to the Company at least seven days before the date of the meeting.

6. As per the provisions of the amended Companies Act, 1956 facility for nominations is available to the shareholders of the Company.

7. Members are requested to intimate change of address, if any, in case of shares held in electronic form to the concerned depository participant quoting their Dp Id number and in case of shares held in physical form to the Registrar & Share Transfer Agent, M/s. Bigshare Services Pvt. Ltd. at E-2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (East), Mumbai – 400072.

8. Corporate Members are requested to send a duly certified copy of the Board Resolution authorizing their representatives to attend and vote at the meeting.

9. Attendance Slip is annexed to the Proxy Form. Members are requested to fill up the particulars of the attendance slip, affix their signature in the appropriate place and hand it over to the Company’s officials/Registrars at the entrance of the Meeting venue.

ANNEXURE TO THE NOTICEINFORMATION PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT REGARDING RE-APPOINTMENT OF DIRECTORDr. Anil Naik, aged 70 years, is a Ph. D. from University of Mumbai (Doctoral Thesis on Turnaround Strategies), and M. Com University of Mumbai. He is recipient of the First Bidhan Chandra Roy Memorial Prize of IIM Calcutta for overall outstanding performance during 1964-66 and S. S. Nadkarni Fellowship at University of Mumbai for post Doctoral Research for the year 2000-01.He is awarded the post of Professor Emeritus & Dean Research by Principle L. N. Welingkar Institute of Management Development & Research in the year 2000, Tarneja Award of Bombay Management Association for the Best Management Paper in 1992 and awarded Best Teacher of Management for the year 2002-03 by the Bombay Management Association.He is appointed as Counsellor by the British Council, Mumbai for Management Courses conducted by British Universities in India in 1999, appointed on Board of Advisors of Business Week, Asian Edition by McGraw Hill Publications in year 2005, appointed on Board of Studies for Management Education Programmes of the University for period of 5 years w.e.f. 1st September, 2005 by University of Mumbai.He is instrumental in designing and conducting Management Development Programmes for a number of corporates across sectors.He has written and published articles on Arthashastra, Industrial Sickness in India, Environment Scanning & Scenario Building, Evolving Role of Chartered Accountants in the New Economy, Hall Marks of New Economy and Winning Competencies.He is independent, non-executive director on Company’s Board. He is a member of Audit Committee and Remuneration Committee of the Company. He does not hold any equity shares in the Company.He is also on Board of Oil Field Instrumentation India Limited, Neterson Technologies Limited, Dai Ichi Karkaria Limited, Indoco Remedies Limited and India Cancer Society.EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956Item No. 4At the Annual General Meeting held on September 29, 2011 the members had accorded their consent for appointment of M/s. Value Line Advisors Private Limited as an advisor on allied matters and on such other matter as may be assigned to it by the Company from time to time at compensation of not exceeding ̀ 2,00,000/- per month. By considering the services provided by M/s. Value Line Advisors Private Limited, which is in overall interest of the Company, the compensation enhanced to ` 2,50,000/- per month exclusive of all out-of-pocket expenses w.e.f 1st April, 2013. Approval of the Central Government shall not be required for enhancing the compensation of M/s. Value Line Advisors Private Limited under Section 314 (1B) of the Companies Act, 1956 read with Director’s Relatives (Office or Place of Profit) Rules, 2011 as amended, as the monthly compensation payable to them does not exceed the overall limits specified by the Central Government from time to time.Accordingly, approval of the members by a special resolution is sought under Section 314 (1B) and other applicable provisions, if any, of the Companies Act, 1956.Your Directors recommend the special resolution for your approval.None of the Directors, except Ms. Bela Desai, is interested or concerned in the resolution.


Place : Mumbai Dharmesh ParekhDate : 2nd August, 2013 Company Secretary

ANNUAL REPORT 2012-13

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DIRECTORS’ REPORTDear Shareholders,

Your Directors present the Annual Report of the Company along with the Audited Statement of Accounts for the financial year ended 31st March, 2013.

Financial ResultsDuring the year under review, the Company earned total revenue of ` 879.53 lacs for the year as against ` 897.64 lacs in the previous year. Standalone revenues during the year stood at ` 431.23 lacs as against ` 540.31 lacs in the previous year.

The consolidated loss before tax for the year stood at ` 41.17 lacs as against ` 111.20 lacs in the previous year. Standalone loss before tax for the year was ` 74.48 lacs as against loss of ` 70.31 lacs in the previous year.

DividendThe Directors have refrained from recommending dividend for the year.

OperationsThe Company is currently engaged in the field of education in media, entertainment and sports management. It runs “EMDI Institute of Media & Communication” in India and Dubai - a leader in Advertising, Event Management, PR and Journalism. The Company is currently conducting courses of EMDI at Mumbai, Thane, Navi Mumbai, Delhi, Indore, Bhopal, Dubai and Uganda.

The joint venture Eduhub Education Pvt Ltd, offers comprehensive program in Sports Management to train future sports marketing and management professionals under “International Institute of Sports Management (IISM)” from Jai Hind College, Mumbai.

DirectorsIn accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Dr. Anil Naik retires by rotation as Director at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Brief resume of Dr. Anil Naik is annexed to the Notice of Annual General Meeting as stipulated under Clause 49 of the Listing Agreement with the Bombay Stock Exchange.

Subsidiary CompanyThe Consolidated Financial Statements has been drawn up in accordance with the applicable accounting standards, forms part of the Annual Report. As per General Circular No.2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, general exemption was granted to all holding companies from the provisions of Section 212 in relation to subsidiaries of holding companies provided certain conditions are fulfilled. Hence, the Company is not attaching the annual accounts of the subsidiary companies along with the accounts of the Company. As instructed in General Circular No.2/2011 dated 8th February, 2011, a gist of the financial performance of the subsidiaries is contained in the report. The Company will make available these documents/details upon request by any member of the Company or its subsidiaries, interested in obtaining the same. These documents will also be available for inspection during business hours at Company’s Registered Office and respective offices of subsidiaries.

AuditorsThe Company’s statutory auditors, M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The notes on accounts referred to in the Auditors’ Report are self explanatory and therefore do not require further clarification by the Board of Directors.

Fixed DepositsDuring the year under review, the Company has not accepted any deposits under Section 58-A of the Companies Act, 1956.

Particulars of employeesSince none of the employees of the Company was drawing remuneration in excess of the limits laid down pursuant to Section 217(2A) of the

Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, details therewith are not furnished.

Particulars of Conservation of Energy, technology absorption and foreign exchange earning and outgo(a) Conservation of Energy The Company is not involved in any manufacturing activity and hence

has low energy consumption levels. Nevertheless, the Company makes all efforts to conserve and optimize the use of energy by using energy-efficient infrastructure, computers and equipments with latest technologies.

(b) Technology Absorption and Research and Development The Company’s research and development focus is on developing

new frameworks, processes and methodologies to improve the speed and quality of service delivery.

(c) Foreign Exchange Earnings and Outgo The earnings and expenditure in foreign exchange were as under:

Earnings `19.35 lacs

Expenditure `1.06 lacs

Corporate GovernanceA separate section on Corporate Governance along with Management Discussion & Analysis forming part of Directors' Report and the certificate from the Secretary in whole time practice regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed to and forms part of the Directors' Report.

Directors Responsibility StatementIn terms of Section 217 (2AA) of the Companies Act, 1956, in relation to financial statements for the year ended 31st March, 2013, the Board of Directors confirm/state that:

i. In the preparation of the Annual Accounts the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the loss of the Company for the year ended as on that date;

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

iv. The Directors have prepared the Annual Accounts on a going concern basis.

AcknowledgementsYour Directors wish to thank all Employees, Bankers, Investors, Business Associates, Advisors etc. for their continued support.


Place: Mumbai Abbas PatelDate: 2nd August, 2013 Chairman


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REPORT ON CORPORATE GOVERNANCE(Pursuant to Clause 49 of the Listing Agreement)

Company’s Philosophy on Corporate Governance

Your Company’s philosophy on Corporate Governance is aimed at optimizing the balance between stakeholders’ interest and corporate goals through the efficient conduct of its business and meeting their obligation in a manner that is guided by transparency, accountability and integrity. The Company endeavours to comply with the requirements of Corporate Governance not merely as a regulatory requirement but also in spirit.

The Board of Directors of the Company fully support and endorses Corporate Governance practices as per the provisions of the amended Clause 49 of the Listing Agreement as applicable from time to time. The following is a report on the status with respect to compliance with Corporate Governance for the year ended 31 March, 2013.

COMPLIANCE WITH SEBI CODE OF CORPORATE GOVERNANCE

1. Board of Directors:

Six meetings of the Board of Directors were held during the year ended March 31, 2013 on 20.04.2012, 25.05.2012, 28.05.2012, 02.08.2012, 02.11.2012 and 01.02.2013. Attendance of Directors at the Board Meetings & Annual General Meeting are as under:

Sr. No.

Names of Directors Number of board meetings

held whilst a Board

member

Number of Board meetings attended

Whether attended last AGM held on

28.09.2012

1 Nowshir Engineer 6 5 No

2 Bela Desai 6 6 Yes

3 Abbas Patel 6 6 Yes

4 Anil Naik 6 4 Yes

The Directors of the Company possess highest personal and professional ethics, integrity and values, and are committed to representing the long term interest of the stakeholders. The Company’s Board comprises 4 Directors with considerable experience in their respective fields. Of these 3 Directors are Non Executive Directors. The Chairman of the Board is an Independent Non-Executive Director.

Details of Composition, Category of Directors, their other Directorships, Committee memberships:

Composition and category of DirectorsSr. No.

Name Designation Category Directorship in other

Companies

Board Committees

on which member

Board Committees

on which Chairperson

1 Abbas Patel

Chairman & Director

Independent, Non-Executive Director

1 4 2

2 Nowshir Engineer

Managing Director

Non-independent, Executive Director

4 2 0

3 Bela Desai

Director Promoter, Non-Executive Director

3 4 2

4 Anil Naik Director Independent, Non-Executive Director

5 4 0

No Director is related to any other Director on the Board in terms of the definition of relative given under the Companies Act, 1956.

No compensation is paid to Non-Executive Directors except sitting fees. No sitting fee is paid to the Executive Directors for attending the board meetings.

Equity Shares held by Non-Executive Directors are as follows:

Name of Director Equity Shares heldAbbas Patel 40,000

Bela Desai 4,94,100

Anil Naik Nil

The Board of Directors has laid down the Code of Conduct applicable to the Board members and senior executives of the Company. A declaration by the Managing Director affirming compliance to the Code of Conduct by the board members & senior executives is also annexed separately at the end of this report.

A brief resume of the Director offering himself for re-appointment at the Annual General Meeting is provided in the annexure annexed to the notice convening the Annual General Meeting for the year 2013.

2. Audit Committee

The Company has an Audit Committee at the Board level with powers and role that are in accordance with Clause 49 II (C) and (D) of the Listing Agreement. The Company has a qualified and Independent Audit Committee with all its members being Non-Executive Directors, to oversee the accounting and financial governance of the Company. The Committee acts as a link between the management, statutory auditors and the Board of Directors. Details of Committee meetings held during the year ended 31st March, 2013 and attendance of members are as under:

Sr. No.

Name Designation Category Number of Meetings

Held Attended

1 Abbas Patel Chairman & Member

Independent, Non-Executive Director

4 4

2 Bela Desai Member Promoter, Non-Executive Director

4 4

3 Anil Naik Member Independent, Non-Executive Director

4 3

The scope of the functioning of the audit committee is to review, from time to time, the internal control procedures, the accounting policies of the Company and such other functioning as may be recommended from time to time by SEBI, Stock Exchanges and/or the Companies Act, which inter-alia include review of:

1. Management Discussion and Analysis of financial condition and result of operations.

2. Statement of significant related party transactions submitted by the management.

3. Internal audit reports relating to internal control strengths & weaknesses.

4. Appointment, removal & terms of remuneration of Internal Auditors.

3. Shareholders / Investors’ Grievance Committee The Company has a Shareholders / Investors’ Grievance Committee

to focus on the prompt and effective redressal of the shareholders grievances and strengthening of the investor relations. The broad functions of the Committee includes redressal of shareholder and


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investor complaints pertaining to transfer of shares, non-receipt of share certificates, non-receipt of annual report, change of address, non-receipt of declared dividend and any other complaints received from the Shareholders/Investors etc.

During the year under review, the Committee met four times, details of attendance by the Committee members are as under:

Sr. No.


Held Attended1 Bela Desai Chairperson &

MemberPromoter, Non-Executive Director

4 4

2 Abbas Patel Member Independent, Non-Executive Director

4 4

3 Nowshir Engineer Member Non-independent, Executive Director

4 4

Mr. Dharmesh Parekh – Company Secretary is the Compliance Officer of the Company as approved by the Board of Directors.

During the year ended March 31, 2013 the Company has received one complaint from investor with respect to non receipt of Demat Credit and same has been resolved within stipulated time. There were no outstanding complaints pending for more than one month. There were no cases, which were not solved to the satisfaction of shareholders.

Status of Investor complaints received during the year under review is as follows:

Particulars Pending as on 1st April,

2012

Received during the

year

Disposed during the

year

Pending ason 31st March,

2013No. of Complaints Nil 1 1 Nil

4. Remuneration Committee

The Company has a Remuneration Committee at the Board level with the powers and role that are in accordance with Clause 49A of the Listing Agreement and the Members of the Committee are as under :

Sr. No.


Held Attended1 Abbas Patel Chairman &

MemberIndependent, Non-Executive Director

1 1

2 Bela Desai Member Promoter, Non-Executive Director

1 1

3 Anil Naik Member Independent, Non-Executive Director

1 1

The Remuneration Committee performs the following functions :

1. To frame the Company’s Policy from time to time on :

a. Compensation Policy to Directors

b. Role of Directors

c. Other matters relating to Directors and Employees

2. To recommend suitable candidates to Board for appointment as Executive/Non-Executive Director.

3. To review performance and recommend remuneration of Executive Directors’ to the Board.

4. To review the role and conduct of Director’s other than Members of the Committee and inform the Board.

Remuneration Policy

The Company has a credible and transparent policy in determining and accounting for the remuneration of Directors. The remuneration

policy is aimed at attracting and retaining high caliber talent. Executive Directors are entitled for the remuneration by way of Salary and Commission not to exceed limits prescribed under the Companies Act, 1956.

The Executive Director is appointed for a period of 3 years w.e.f. 1st July, 2011. The details of remuneration paid to Managing Directors during the year ended 31st March, 2013, have been provided under Notes on Accounts.

5. Other Committees The Share Transfer Committee, which approves share transfers,

transmission, issue of duplicate shares etc. and to sign documents, share certificates, deeds etc. in this regard.

6. Subsidiary Company During the year under review the Company has two unlisted

subsidiary companies namely EMDI (Overseas) FZ LLC and Eduhub Education Private Limited. The Audit Committee reviews the financial statement of the subsidiary companies. The statements of all significant transactions of the unlisted subsidiary companies are placed regularly before the Board of Directors for their review.

7. Disclosures There are no material transactions with related parties, which

require separate disclosure. A comprehensive list of related party transactions as required by Accounting Standard (AS) 18 issued by the Institute of Chartered Accountants of India, forms part of note no.30 of Notes to Financial Statements in the Annual Report.

There were no materially significant related party transactions i.e. transactions of the Company of material nature, with its Promoters, Directors or the Management, their subsidiaries or relatives etc. that may have potential conflict with the interest of the Company at large.

There is no material pecuniary transaction with any Non-Executive as well as Independent Directors of the Company that requires a separate disclosure.

The Board reviews the risk assessment and minimization procedure from time to time. The risk management issues are discussed in detail in the report of Management Discussion and Analysis.

The Management Discussion and Analysis Report is prepared in accordance with the requirements laid out in Clause 49 of the Listing Agreement.

The Company has complied with the requirements of the Listing Agreement as well as the regulations/guidelines prescribed by the Securities and Exchange Board of India. There has been no instance of non-compliance by the Company or no penalties were imposed on the Company by the Bombay Stock Exchange Limited or SEBI or any other statutory authority on any matter related to capital market during the last three years.

The details of compliance with mandatory requirements of Clause 49 are as contained in this Report.

8. Green initiative in Corporate Governance – Electronic Mode of service of documents

The Ministry of Corporate Affairs (MCA) has issued General Circular No. 17/2011 dated 21.04.2011 and General Circular No. 18/2011 dated 29.04.2011 for making awareness about the Green Initiative in Corporate Governance - Electronic mode of service of documents to the members of the Company.

To support the Green initiative in Corporate Governance, we propose to send all communications, including Notice of Annual General Meeting and Annual Report of the Company for the year 2012-2013 through electronic mode to your valid e-mail address available in the Register of Members of the Company. Physical copies will be sent to those shareholders who do not have valid e-mail address.

This initiative by the Government will not only go a long way in conservation of the environment but also enable you to receive notices/documents, etc. promptly and without loss in postal transit.


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In order to receive notices/documents of the Company on email, you would be required to update your email with your Depository Participant (DP) with NSDL/CDSL. As and when there are changes in your email address, you are requested to keep your DP informed of the same.

We request your support in this endeavor to receive the eversion of the Annual Report for the year ended 31.03.2013 and also in future. The Members holding shares in electronic mode may update their e-mail IDs with their depositary participants to ensure that the Annual Reports and other documents reach them at their preferred e-mail IDs and where the shares are held in physical form, please get your e-mail IDs updated in the records of the Registrar and Share Transfer Agent/Company. Besides ensuring that your mailbox has adequate free capacities to receive approximately 5 MB of communication.

However, in case you do desire to receive the Annual Report in physical form, you are requested to inform us by sending an email to [email protected] indicating your decision. You will be entitled to receive a copy of the annual report at free of cost.

Please note that the Annual Report will also be available on the Company’s website www.greycellsltd.com for viewing/downloading. Physical copies of the Annual Report will also be available at our Registered Office in Mumbai for inspection during office hours.

We look forward to your whole-hearted response for the success of this green initiative. Assuring you of our best services at all times.

9. CEOCertification Certificate from Mr. Nowshir Engineer, Managing Director in terms of

Clause 49 (V) of the Listing agreement entered into with the Bombay Stock Exchange Limited was placed before the Board of Directors of the Company at their meeting held on 2nd August, 2013 and is annexed to this report.

10. CompanySecretary’sCertificateonCorporateGovernance Certificate from M/s. A. K. Jain & Co, Company Secretaries in terms

of Clause 49 (VII) of the Listing agreement is attached and forms part of this report.

11. General Body Meetings Location and time of last three AGMs held

Year ended 31st March

Date of AGM

Time of AGM

Venue

2012 September 28, 2012

9.30 A.M. D-2, 1st Floor, Poddar Chamber, 126, Mathuradas Compound, N.M. Joshi Marg, Lower Parel (W), Mumbai – 400013

2011 September 29, 2011


2010 September 24, 2010


Special Resolution passed in the last three Annual General Meetings:

1. Authority to Board for creation of Charges/Mortgages - Annual General Meeting held on 24th September, 2010.

2. Appointment of Firm for holding an office in which Director is a Proprietor - Annual General Meeting held on 29th September, 2011.

3. Appointment of Company for holding an office in which Director is a Director - Annual General Meeting held on 29th September, 2011.

During the year under review, the following special resolution(s) were passed by the Company’s shareholders through postal ballot under Section 192A of the Companies Act, 1956 and Companies (Passing of Resolutions by Postal Ballot) Rules, 2001 :

1. Increase in Authorised Share Capital and Alteration of Memorandum of Association

2. Issue of Equity Share Warrants on Preferential Allotment Basis

Further, no resolution proposed at the ensuing Annual General Meeting needs to be passed through Postal Ballot.

12. Means of communications Quarterly/annual results are published in Free Press Journal & Nav

Shakti. Up-to-date financial results, annual reports, shareholding patterns, press releases, information on new developments and business opportunities are also available on the Company’s website www.greycellsltd.com. Shareholders information forms part of the Annual Report.

SHAREHOLDER INFORMATION

AGM: Date, Time and Venue

Monday, September 30, 2013 at 9.30 a.m. at D-2, 1st Floor, Poddar Chambers, 126, Mathuradas Compound, N.M. Joshi Marg, Lower Parel (West), Mumbai – 400013

Corporate Identity Number (CIN)

L65910MH1983PLC030838With the MCA21 initiative of the Ministry of Corporate Affairs going live, the Company’s master data and details of corporate filings made by the Company with the MCA may be viewed by the members and other stakeholders at www.mca.gov.in using the above mentioned CIN

Financial Calendar for 2013-14 (tentative and subject to change)

- Financial reporting for the quarter ending June 30, 2013

On or before August 15, 2013

- Financial reporting for the quarter ending September 30, 2013

On or before November 15, 2013

- Financial reporting for the quarter ending December 31, 2013

On or before February 15, 2014

- Financial reporting for the year ending March 31, 2014

End May, 2014

Date of Book Closure September 23, 2013 to September 30, 2013 (both days inclusive)

Dividend Payment Date N.A.

Listing on Stock ExchangesStock codeFees

The Bombay Stock Exchange Ltd.

Code – 508918The Listing fees paid to the BSE for the financial year 2013-14

Market price data The Company’s shares are frequently traded.

Registrar and Share Transfer Agents

Bigshare Services Private LimitedE-2/3, Ansa Industrial Estate,Sakivihar Road, Saki Naka,Andheri (E), Mumbai – 400 072Phone : 28470652 / 53Fax : 28475207Email: [email protected]


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Share Transfer System Shares transfers in physical form are registered and returned within 15 days of lodgment, if documents are clear in all respects and demat request are normally confirmed within prescribed time from date of the receipt. During the year under review total 1,00,000 equity shares transferred on 27.04.2012 in physical form.

SEBI Complaints Redress System (SCORES)

The investors’ complaints are also being processed through the centralized web base complaint redressal system. The salient features of SCORES are availability of centralized data base of the complaints, uploading online action taken reports by the Company. Through SCORES the investors can view online, the actions taken and current status of the complaints.

Dematerialization of shares and liquidity

The Company’s equity shares have been admitted in electronic/dematerialized mode by both Central Depository Services (India) Limited and National Securities Depository Limited under the International Securities Identification Number (ISIN) INE791H01011. This number is required to be mentioned in each correspondence relating to the dematerialization of shares of the Company. As on 31st March, 2013, 59,90,981 equity shares representing 99.72% of the company’s total number of shares have been dematerialized. The Company has paid the custodial charges to the respective depository participant for the financial year 2013-14.

Outstanding GDRs/ ADRs/ Warrants or any Convertible i n s t r u m e n t s , conversion date and likely impact on equity

The Company has 16,00,000 outstanding convertible equity share warrants of `10/- each issued and allotted at a price of ̀ 21/- per share warrant on preferential basis to the non promoter entities as per Chapter VII of SEBI (ICDR) Regulations, 2009. As per terms of issue, the warrant holder will have an option to apply for and be allotted one equity share of the Company per equity warrant at any time after the allotment of equity warrant but on or before the expiry of 18 months from the date of allotment of equity warrant, in one or more tranches. The total paid-up capital of the Company will be 76,07,715 equity shares of ̀ 10/- each amounting to ` 7,60,77,150/- assuming full conversion of share warrant. The equity shares to be issued on conversion of convertible share warrants and allotted in terms of issue shall rank pari passu in all respects with the existing equity shares of the Company including entitlement of dividend.

Plant Locations N.A.

Registered Office and Address for correspondence

GREYCELLS EDUCATION LTD.D-2, 1st Floor, Poddar Chamber,126, Mathuradas Compound,N.M. Joshi Marg, Lower Parel (West),Mumbai – 400013

Stock Market Data The Monthly High and Low quotation of equity shares traded on BSE

are as under :

Month Bombay Stock ExchangeHigh (`) Low (`)

April’ 12 22.40 16.30May’ 12 35.20 18.25June’ 12 37.00 30.30July’ 12 35.90 30.45August’ 12 35.50 30.75September’ 12 32.95 19.55October’ 12 21.50 17.90November’ 12 29.60 21.00December’ 12 27.10 24.10January’ 13 29.75 26.65February’ 13 28.40 20.00March’ 13 19.05 14.35

• Distribution of Shareholding as on March 31, 2013

Distribution – As on March 31, 2013Range Shareholders Shares

No. of Shares Numbers % to Total

Numbers % to Total

1 – 5000 617 72.93 89,039 1.485001 – 10000 64 7.57 53,419 0.891000 – 20000 44 5.20 73,222 1.2220001 – 30000 23 2.72 56,541 0.9430001 – 40000 12 1.42 42,710 0.7140001 – 50000 11 1.30 52,930 0.8850001 – 100000 27 3.19 2,00,881 3.34100001 and above 48 5.67 54,38,973 90.54

Total 846 100.00 60,07,715 100.00 • Shareholding Pattern as on March 31, 2013

Category No. of shares held

Percentage of shareholding

Promoter's holding- Indian Promoters 14,62,567 24.34%- Foreign Promoters -- --Non-Promoters HoldingForeign Institutional Investors 3,24,577 5.40%Bodies Corporate 17,36,199 28.90%Indian Public 11,63,479 19.37%Clearing Member 4,956 0.08%Non Resident Indians 13,15,937 21.91%

Total 60,07,715 100.00%


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ManagingDirector’sCertificationpursuanttoClause49 of the Listing Agreement

I, Nowshir Engineer, Managing Director of Greycells Education Limited, to the best of my knowledge and belief, certify that:1. I have reviewed the Balance Sheet and Statement of Profit and

Loss for the year ended 31st March, 2013 (consolidated and unconsolidated), and notes on accounts, as well as the Cash Flow Statements and the Directors’ Report;

2. Based on my knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the statements made;

3. Based on my knowledge and information, the financial statements, and other financial information included in this report, present in all material respects, a true and fair view of, the company’s affairs, the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report, and are in compliance with the existing accounting standards and / or applicable laws and regulations;

4. To the best of my knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company’s code of conduct;

5. I am responsible for establishing and maintaining disclosure controls and procedures and internal controls over financial reporting for the Company, and I have:a) designed such disclosure controls and procedures to ensure

that material information relating to the company, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

CertificateonCorporateGovernancepursuanttoClause 49 of the Listing Agreement

To

The Members of

Greycells Education Limited.

We have examined the compliance of conditions of Corporate Governance by Greycells Education Limited (The Company), for the year ended 31st March, 2013, as stipulated in Clause 49 of the Listing Agreement of the Company with the Bombay Stock Exchange Ltd.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination in accordance with the guidance note on certification of Corporate Governance as stipulated in clause 49 of the Listing Agreement and was limited to procedures and implementation thereof, adopted by the Company for ensuring the

c) evaluated the effectiveness of the Company’s disclosure, controls and procedures; and

d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting;

6. I have disclosed based on our most recent evaluation, wherever applicable, to the Company’s auditors and the Audit Committee of the Company (and persons performing the equivalent functions)a) all deficiencies in the design or operation of internal controls,

which could adversely affect the company’s ability to record, process, summarize and report financial data, and have identified for the Company’s auditors, any material weaknesses in internal controls over financial reporting including any corrective actions with regard to deficiencies;

b) significant changes, if any, in internal controls during the year covered by this report;

c) all significant changes in accounting policies during the year, if any, and that the same have been disclosed in the notes to the financial statements;

d) instances of significant fraud of which I am aware, that involves management or other employees who have a significant role in the Company’s internal control system;

7. I affirm that I have not denied any personnel, access to the Audit Committee of the Company (in respect of matters involving alleged misconduct) and I have provided protection to ‘whistle blowers’ from unfair termination and other unfair or prejudicial employment practices; and

8. I further declare that all board members and senior executives have affirmed compliance with the code of conduct for the current year.

For Greycells Education Limited

Place: Mumbai Nowshir EngineerDate : August 2, 2013 Managing Director

compliance of the conditions of Corporate Governance. It is neither an audit nor an express of opinion on the financial statements of the company.

In our opinion and to the best of our information and according to the explanations given to us, the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For A.K. Jain & Co Company Secretaries

Mumbai Ashish JainAugust 2, 2013 Proprietor

(C.P.No. 6124)

MANAGEMENT DISCUSSION AND ANALYSIS REPORT1. Education Industry The Indian education system is one of the largest in the world. The

education sector is divided into two main segments; the formal education is highly regulated and fall under the purview of Ministry of Human Resource Development (MHRD), Government of India, non-formal education is unregulated. Informal education comprises preschool, vocational training, coaching classes, multimedia and soft skills development. Education in India is mainly provided by the public sector, with control and funding coming from three levels: federal, state and local.

India’s higher education system is the third largest in the world, after China and the United States. The main governing body at the tertiary level is the University Grants Commission (India), which enforces its standards, advises the government, and helps coordinate between the centre and the state. Accreditation for higher learning is overseen by 12 autonomous institutions established by the University Grants Commission. The Central Government plays a vital role in the

evolution and monitoring of educational policies and programmes. Education market in India currently stands at a year-on-year (YoY)

growth of 15 per cent. The education spend in India is at US$ 600 billion and the private education segment alone is expected to cross US$ 45 billion mark by 2015 from the present US$ 35 billion, according to a research report prepared by Investor Relation Society, affiliated to US based Global Investor Relations Network. However there is a further demand of investments worth US$ 100 billion by 2014 according to a report titled ‘Indian Education Investment Report 2013’. The private education sector is estimated to reach US$ 70 billion by 2013 and US$ 115 billion by 2018, according to consulting firm Technopak.

The education sector has attracted foreign direct investments (FDI) worth Rs 3,332.97 crore (US$ 552.09 million) during April 2000 to March 2013, according to the data released by the Department of Industrial Policy and Promotion (DIPP).

India is emerging as one of the world’s largest consumers of education services with a target population of close to 450 million (in the age


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band of 5-24 years). This number is expected to increase to 486 million by 2025, exceeding the combined target population in China (354 million) and US (91 million) according to Report on Education Sector in India by Perth Education City.

Combine the thought with the fact that India is a nation of young people - out of a population of above 1.1 billion, 672 million people are in the age-group 15 to 59 years - which is usually treated as the “working age population”. This young population should be considered as an invaluable asset which if equipped with knowledge and skills, can contribute effectively to the development of the national as well as the global economy. The vision is to realize India’s human resource potential to its fullest in the education sector, with equity and inclusion.

Realizing the fast growth of education sector in India, many private companies are looking for relevant acquisitions and alliances in this space. Major investments are being seen in the areas of pre-schools, private coaching and tutoring, teacher training, the development and provision of multimedia content, educational software development, skill enhancement, IT training and e-learning.

For India to maintain its economic growth in the global marketplace fuelled by the knowledge economy, the country needs to increase student enrolments in higher education. The country’s demographic differentials reveal that India will have a distinct advantage of the younger age group (where many new opportunities can be fully optimized) over the next few years. To enroll this high number of young population in colleges, the country requires more universities and training institutes.

As per research by Perth Education City, the number of universities has grown manifold and a similar trend has been witnessed in the number of student enrolments (up to 14 million) in higher education. The annual student enrolments in higher education are expected to grow at a CAGR of nearly 8.7% during 2010-11 to 2012-13. Further, the market size of higher education will witness a CAGR of approximately 15% to cross US$ 22 billion by 2013.

Although the country has one of the largest higher education systems in the world, a report on ‘Indian Education Services - A Hot Opportunity’ has found that there remains a high growth potential for the development of the higher education system in India. Along with the quantity of graduates, the quality of education is anticipated to be another focus area for the Indian higher education system. With the entry of foreign players, it is expected that the competition will intensify and correspondingly improve the quality of education.

If addressed properly, there are a number of factors which can act as a catalyst for the growth of higher education in India. Availability of education loans, growing demand for skilled personnel and e-learning are few of the growth areas. The country also faces challenges like low pedagogic quality and lack of investment funds in providing quality education. The number of people who are waiting for quality education and availability of top class education has a great imbalance. This is allowing India to become the best target to feed private equity investment in the educational sector.

Dynamic growth in private investment in education is expected simply because there is strong and rising demand for such services and the public education system is not equipped to supply the same in terms of either quality or quantity. In fact, the huge preference for private sector schools in India can be well understood from the fact that 40% of students in India are enrolled in private schools which account for only 7% of the network! Source: Indian Education Sector Report IDFC. The involvement and participation of focussed, quality conscious private bodies is likely to grow multi-fold. Over the next decade, the education sector is expected to witness the emergence of new upstarts;

The Indian middle class demand for higher education for children has increased with rise in middle class incomes, causing the savings ratio for securing higher education for their children to touch 55%. Educational and related expenses are deemed an investment. This change in attitude will act as a catalyst, promoting higher investments in the said sector.

2. Vocational Training in India and the need for private participation Generally, vocation and career are used interchangeably. Vocational

education might be classified as teaching procedural knowledge. This may be contrasted with declarative knowledge, as used in education in a usually broader scientific field, which might concentrate on theory and abstract conceptual knowledge, characteristic of tertiary education. Vocational education is related to the age-old apprenticeship system of learning.

India has world’s second largest working age population, yet many of the vacancies go unfilled in need of the desired candidate. With a near double digit growth during the last decade, the demand for skilled resources has increased manifold. The high proportion of school

dropout along with rising impact of technology in almost all industries has expanded the demand of vocational training in India. Vocational training bridges the gap between theoretical classroom training and real work environment through its job-specific skill training.

Vocational education consists basically of practical courses through which one gains skills and experience directly linked to a career in the future. It helps students to be skilled and in turn, offers better employment opportunities. After finishing the courses, students are often offered placements in jobs. Vocational trainings in a way give students some work related experiences that many employers look for.

Vocational education/training in India is gathering huge investments from corporate and private equity (PE) firms as the methodology and technology pertaining to this sector is witnessing significant improvements. Enhancement in the demand and supply of online and correspondence courses, facilitation by government and quality improvement are the factors driving the vocational training segment.

India plans to enhance its formally skilled workforce through vocational education and training from the current 12 per cent to 25 per cent by 2017, thereby adding about 70 million people in the next five years. Hence, the higher education segment is expected to undergo intense changes and activities in terms of foreign partnerships and foreign players entering the market in the coming years, with Indian players rejuvenating and improvising their methodology, technology and course content to match the competition. Ministry of Finance, Press Information Bureau (PIB), Media Report, Ministry of Education, Department of Industrial Policy & Promotion (DIPP).

India is referred to as a ’young nation’ with 28 million population of youth being added every year. Only about 2.5 million vocational training seats are available in the country whereas about 12.8 million persons enter the labour market every year. About 90 per cent of employment opportunities require vocational skills, something that is not being imparted on a large scale in schools and colleges. The major reforms proposed for bringing about necessary ‘flexibility’ in the offering of vocational courses and development of ‘modular competency based curricula’ in collaboration with industry to suit the needs of both target groups and the employers (industry) will be useful in reducing the shortage of skilled manpower.

The direct involvement of the private sector assumes importance in this regard. By systematizing the involvement of selected private sector players from different sectors both in the local as well as larger economy, it will become possible to ensure the relevance of the curriculum, both in terms of being contemporary as well as in terms of being useful for actual work conditions. Secondly, private players can also provide trainers for vocational education, and work towards apprenticeships, or internship-type of arrangements for providing hands-on experience to students. In the long run, such arrangements would benefit both employers as well as employees.

Areas in which courses can be developed are translation and interpretation, journalism, media and entertainment, tourism and travel, handicrafts and design and fine arts.

Our Company attempts to bridge the widening gap between academia and industry requirements by catering to the student base at vocational level and making them industry ready. Our vision is to be an Institute of vocational learning, focusing on developing intellectual, personal and employability skills of our students. In the Indian private educational space, Greycells is a name synonymous for a wide range of high quality educational services and content, services and satisfaction have been the 3 critical success levers in Company’s journey and they continue to be our core strengths. Industry’s changing landscape and emerging challenges, our courses are well poised to deliver talent and harness the potential of young minds. Our courses in tandem with industry are well poised to train the youth to meet the challenges of a rapidly developing society and nation.

The Company offers programs that range from skill enhancement courses to job-oriented. The comprehensive courses and content will provide segment specific guidance to make candidates the best in their chosen field. The Company focused on imparting industry relevant skill to youth to make them industry – ready and skilled personnel using quality content and practices. Vocational education is education for employability therefore all our course encourage candidates to enhance employability skills, provide additional skills, look at industries which are growing and attract value.

Today, more than 7,000 EMDI students have graduated over the last 11 years, and majority of these students are employed and work at various companies in event management, advertising, PR & media sector at various levels. Our Company is marshalling its talent pool and resources to contribute relevant, top-of-the-line work in the field


9

of vocational training, both in India and abroad. We are one of the very few companies providing integrated vocational training in media and entertainment space in India, Dubai and Africa.

The strength of reputation and brand name of the Company is dependent on the quality and scope of our course offerings, and we continue to devote significant resources to enhance our current offerings and develop new quality educational programs and services that are responsive to the evolving market. The mission of the Company is to create a global conglomerate that sets new standards of excellence in Education, Entertainment and Media and grooms future leaders of the industry.

3. Media and Entertainment (M&E) Industry and Developments India’s M&E industry is expected to get double in size to `1.66 trillion

(US$ 28.72 billion) by 2017, from ` 82,000 crore (US$ 14.19 billion) in 2012, which would be a compounded annual growth rate (CAGR) of 15.2 per cent, according to the Indian Media and Entertainment Industry Report 2013 by KPMG. While, 2012 was a challenging year for the industry, with some improvement likely in the global economy in 2013 and India’s real GDP expected to be in the region of 6.1% to 6.7%, the prognosis for the industry looks much better going forward. Given the impetus introduced by digitization, continued growth of regional media, upcoming elections, continued strength in the film sector and fast increasing media businesses, the industry is estimated to achieve a growth of 11.8 percent in 2013 to touch INR 917 billion. Going forward, the sector is projected to grow at a healthy CAGR of 15.2 percent to reach INR 1661 billion by 2017, says the FICCI – KPMG Media & Entertainment Report 2013. Moreover, the Government’s drive towards digitalization and addressability for cable television by 2014 is expected to provide a boost to direct-to-home (DTH) and digital cable growth.

Total advertising spend across media was INR 327.4 billion in 2012. In light of continued economic slowdown, advertising revenues saw a growth of 9 percent in 2012 as against 13 percent in 2011 and 17 percent in 2010. Print continues to be the largest beneficiary, accounting for 46 percent of the advertising pie at INR 150 billion. M&E is still an advertising dependent industry in India. Hence, it remains sensitive to the impact of the economic slowdown.

In a nutshell, alignment of entertainment, information and telecommunication is increasingly affecting India’s overall M&E industry. Launch of more advanced media devices over the last decade has facilitated access of the same content on a variety of media platforms. This is helping in emergence of new business models and revenue streams, not only for content providers, but for a variety of new players becoming a part of the new media ecosystem. With all these factors well-in-place, the M&E sector certainly is marching towards new horizons of growth.

India is one of the largest media consuming markets in the world, however, the size and scale of industry is limited when compared with global M&E Industry. Mature players are increasingly looking to build scale across the media value chain and explore cross media synergies. In addition, existing foreign players are looking to expand their Indian portfolio and several other are expected to make and entry into India. Inorganic growth is likely to be a preferred route for many of these players. With increased digitization and accountability, Indian media companies are also expected to generate greater interest from private equity players.

There is a very large number of young workforces already gainfully employed in the business of events and activation, and many more are entering the industry year on year. There is a need for a standardization of education qualification for the industry. Most survey respondents felt that the talent entering the event industry is inadequate. According training was the most preferred way of developing talent, which we are providing in our EMDI Institute of Media and Communication courses to the students.

4. Environment The financial year 2012–13 was a very challenging period for the

Indian economy. GDP growth slipped to 5%, which is the slowest pace of growth in the last 10 years, impacting job creation. Economic growth was impacted by the slow pace of reforms, political and policy uncertainty, foreign exchange volatility, and high interest rates. Global economic headwinds created further uncertainty for businesses and lowered business confidence.

The economic environment remained weak and was much lower than anticipated at the start of the year. The global economy grew by 3.2% during the year 2012, against the growth of 3.8% and 5.2% during the year 2011 and 2010, respectively. During the financial year 2012-13, Indian economic growth slowed to a decade low of 5.0% against 6.2% and 9.3% during the financial year 2011-12 and 2010-11, respectively.

In this environment, the education and training sector remains a key determinant of economic growth and recovery, both for India and rest of the world. Governments are increasingly looking to education and skill development to promote economic growth. Extensive funding and policy reforms are occurring in India with skills development and vocational training high on the agenda of the Government and the Planning Commission.

To stimulate and support reforms in skills development and to facilitate nationally standardized and acceptable, international comparability of qualifications, a “National Vocational Qualifications Framework” (NVQF) is being established by the Central Government. The unified system of national qualification will cover schools, vocational education and training institutions and higher education sector. NVQF will be based on nationally recognized occupational standards which details listing of all major activities that a worker must perform in the occupation or competency standards – a detailed listing of the knowledge, skills and attitude that a worker should possess to perform a task written by the particular employment-led sector skills council.

5. Union Budget 2013-14 The education is the other high priority sector for the government. In

the budget presented during the fiscal, the government has allocated 658.67 billion to education, an increase of 17% over the last year. The space left unattended by the government has been picked up by the private sector. Over the last few years, there has been a visible increase of the private companies in the sector. As per a report on the sector by a brokerage house IL&FS, private education revenues are estimated at USD 30 billion in 2012 and are expected to grow at 19% and reach USD 45 billion by 2015. The Sarva Shiksha Abhiyan (SSA) and the Right to Education Act are firmly in place. The government allocated 272.58 billion for SSA in 2013-14.

6. Outlook Vocational Training is the ‘sun rise’ industry. The Company will

continue its process of exploring the potential in additional areas of related service offerings. These new developments will have a positive impact on the Company in the years to come. The Company plans to continue to expand its brand and product portfolios and its service and distribution networks in India and abroad in the near future, both organically and inorganically via strategic acquisitions and associations.

The Company believes that growth is planned & focused and based on efficient use of available resources to grow the business and we plan to retain and strengthen our leadership position in the marketplace. The Company will endeavor to be ‘partner by choice’ to both the industry and students and thereby increase the number of students multifold in the years to come.

Greycells shall continue to look for strategic opportunities in the acquisition are as well as fast and efficient penetration into the Indian domestic market for organic growth. The Company will continue to seek to pursue selective strategic acquisitions, majority investments and joint venture investments to augment its capabilities, broaden its service offerings and increase its geographic presence and to tap the huge unexplored markets both at domestic front as well as global front.

Our objective is to impart quality education through standardized and innovative teaching methods and emerge as an integrated education service provider in India. Our vision has to be broad enough to be able to see how we make the individual productive in changing world and what role education and learning can play in it. A broad vision such as this helps crafts a corporate strategy that creates superior value for our shareholders. Your Company has continued its journey towards capitalization of the opportunities presented by the rapidly expanding education market.

7. Opportunities and Threats Opportunities The Company will look to maximise locations of presence and

verticals in education to reach out to the student community and provide world class education. The Company shall seek to build on strengths and the management expertise and have to build a value based organisation that will come to dominate the media education industry.

Being a largely under-penetrated field, the education industry in India holds enormous opportunities for growth. While the entry barriers are likely to stay high for new companies in the near future, those that have already established themselves are likely to see tremendous growth. This is mainly due to the growing awareness of the need for quality education as well as the increasing population of students in the country, which are likely to lead to companies


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in the industry adopting operation models that can enable them to overcome both rigid regulations as well as low scalability. In areas of services, expertise and knowledge, your Company with its team of professionals is expected to tap the potential opportunities for growth.

The Company is always trying to push the envelope on ways to leverage the opportunities to provide high quality education content to students. It is trying to bring these to the students in every manner in which they would like to utilize it – through varying formats, styles and different devises. The Company has been on the forefront of heralding the next advancement in learning, thus becoming a distinctive player in bringing knowledge to students across geographical and cultural borders.

The Company will look at presence both domestic and internationally as in locations, collaboration with leading universities/education institutions to deliver courses to their existing students and resource/research opportunities globally. This shall mean a multifaceted and multi cultural education imparting entities with focus on world class education and standards. The Company plans to continue to expand its brand, scalability and distribution networks through franchisee/business associates in India and abroad.

The Company by geographic coverage strengthening its presence in business with a clear focused approach which would help increase revenue growth, improve profitability as well as de-risk the company from economic slowdowns. The Company will continue to tap opportunity to grow its business both organically and inorganically via strategic acquisitions in India and abroad.

The growing acceptance of vocational institutes and the focus on the media and entertainment sector as a serious career option in the minds of parents, key decision makers, students alike – will ensure that courses presented by Greycells are readily accepted in the market.

In this environment, Greycells strengthened its position by building strong credentials as one of the largest providers of vocational and professional skills across various service sectors. Given the above credentials, the Company is uniquely positioned to take advantage of both the long term trend towards improvement of education and skill levels as well as increasing outsourcing in India and overseas. The Company’s diverse operations are testament to its firm focus and strength. The Company is continuously looking for avenues for future growth in education industry and geared up to grab the business opportunities available in India as well as internationally.

Threats However, India continues to face stern challenges. Despite growing

investment in education, 35% of its population is still illiterate; only 15% of Indian students reach high school, and just 7% graduate. Indian Education system is facing challenges like “poor quality of education” and “access to education”. Both these challenges lead to the underperformance of the education system. The further challenges are uneducated & untrained population, irrelevance of courses, inadequate syllabus, inadequate practical training, poor enrolment, high drop-outs, lack of employment opportunities etc. Low enrollments and high dropout rates all though the chain, results in a very inadequate supply to the organized work force.

The education business has seen the entry of host of new players in almost all the sectors we have established our presence. Education as a business is one of high growth prospects with presence of a mix of various professional academies, private and public schools, international schools/academies, private tutors, government schools etc. The Company operates in a highly competitive environment that is subject to innovations, changes and varying levels of resources available to each players. This can be a matter of concern if the company does not adapt to the changing face of the Industry. The company has been keeping itself abreast with the latest changes in the industry to implement the same in its operation to keep itself ahead of competition.

One of the related challenges is to attract talented people to work with the Company and also retaining the pool of this talent. The management continuously reviews its talent pool for upgradation. The Company is focused on ensuring and has implemented employee friendly policies to retain talent.

The key management is responsible for the day-to-day operations and they are indeed the key force in driving the business growth because of their experience and knowledge of industry. There is always a risk that we may lose our key management team. If key management unable or unwilling to continue with us, we may find it difficult to replace such people and our business may be adversely affected. As we are in service industry, our growth and operations are dependent on the management team.

Our success is mainly attributable to our reach, experience and quality processes. We recognize that we can only grow and prosper if we can:a. acquire and retain top quality talent on a continual basisb. execute efficiently and manage growth challengesc. education for employabilityd. deliver relevant and innovative content to the studentse. remain close to the students at all timesf. on the job trainingg. earn while you learnh. placement opportunitiesi. reorientation of vocational courses

Another large challenge is managing expectation from students. Due to the previous achieved success in the field, especially when there was the first mover advantage - if the new courses or existing courses do not live upto expectations, it may lead to dissatisfaction. The Company is well aware of these risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions.

8. Segment-wise Performance The Company operates only in one segment and hence segmentwise

performance has not been given.9. Subsidiaries EMDI (Overseas) FZ LLC is a wholly owned subsidiary of the

Company caters into vocation of education, including teaching graduates, undergraduate and working professionals in the field of Event Management & Innovative Marketing, The Creative and Media Industry Landscape, Advertising & Design, Public Relations and Journalism, Wedding Planning, Radio Jockeying and Programming, Disc Jockeying and Music Promotion etc. in the form of class room training and workshops through general courses, specialist programs, comprehensive event and media management courses and training programs.

The joint venture company Eduhub Education Private Limited caters into business of providing vocational training in the field of event management, public relations, advertising and journalism. The Company also owns and manages the International Institute of Sports Management and imparts education and training in sports management and related areas through the Institute.

10. Risks Risk is an integral part of corporate world today for any going concern

and our endeavor has been to maximize stakeholder value by achieving an appropriate balance between risks and return. Since risk taking is intrinsic to business growth, all business entities face risks either from external environment or from internal operations. The most significant risks which the company has identified with mitigation plan are : External Risks (Political, Environment, Slowdown in economic

growth, Change in Education policy, Currency Rate Fluctuation, Competition, Changes in Law and Natural Calamities) and

Internal Risks (Business Concentration, Investment Process, Human Resource Management, Core Faculty etc.)

Further any change in tax law in India, particularly income tax and service tax might be to increase tax liability of the company thereby putting pressure on profitability.

To mitigate the same, the Company has constantly endeavored to broaden the charter of risk management to include opportunities as well as threats. It uses an integrated risk management approach, based on a number of techniques to cover the full range of risks in the framework. Today, risk assessment and mitigation is an important part of decision making and management at all levels of the company. To mitigate this, the Company will initiate steps for rationalization of infrastructure.

Apart from the regular operational & business risks, the other major risks faced by the Company are: a) Business Concentration The Company’s business today is largely concentrated in

vocational training primarily in few verticals of media and entertainment.

The poor performance of our Business Associates leads to downfall in projected revenues, which is out of our control. Further low quality services rendered by Business Associates to students may also one of the risk areas for the Company. To mitigate this risk, our senior officers frequently visit the centers and ensure that courses shall be conducted according to the Operational Manual established by the Company. The


11

Company can also take corrective measures to keep up the requisite academic standards.

To mitigate the risk arising from this concentration, the Company will strive towards expanding the Company’s’ business in additional areas of related service offerings.

b) Core Faculty The faculty plays a pivotal role in the system of education.

Further majority of our faculty members are visiting faculties from various industries and are in other occupation besides teaching at our centres. Any exodus by the visiting faculties can have adverse impact on business of the company. Failure to attract / retain qualified faculty members who have the necessary domain expertise or failure to provide continuous training to our faculty members so as to keep them abreast with the changing student expectations, examination pattern and other key trends that are necessary to effectively deliver the course may affect the pace of our growth and teaching quality across all our learning centres in different locations. Also, non availability of qualified faculty in one or more of our locations may have a material and adverse effect on our business.

The lack of trained faculties will be a serious area of concern. To overcome, the Company taps professionals from relevant industry. All faculty members lecture on subjects of their expertise, resulting in experience sharing, interaction and networking of these professional with the students. The faculty members contribute to our overall performance by providing good quality training to the students and thus enable us to maintain our brand and reputation. The team of outstanding and dedicated faculty members provides comprehensive and systematic guidance to students who aspire for nothing but the best.

c) Entry of other players The lack of an entry barrier with respect to a private setup

offering similar certificate courses is a threat. Centres offering similar courses are the first level of competition, however competition which enters the market, offers a poor product and then is forced to shut down later on is even worse as it spoils the education market and trust towards the other credible players.

d) Enrollment of students The Company’s ability to attract students to enroll for courses

depend on several factors such as to offer new courses, enhancing existing courses in response to changing industry needs, student’s demands, expanding our geographic reach, effectively marketing courses to a broader base of prospective students and responding to competitive pressures. Our course content incorporates the latest global trends and concepts, which required by fast growing and ever changing industry. Further the Company’s course content is developed by subject experts possessing long years of academic and industry related experience. The content so created is constantly upgraded to suit the requirements of the educational institutions and expectations of the student community. Our courses are structured and embellished with inspirational modules to make learning holistic and complete. Given the industry’s changing landscape and emerging challenges, our courses are well poised to deliver talent and harness the potential of young minds. To be an institute of vocational learning, focusing on developing intellectual, personal and employability skills of our students. Further our course curriculum designed with a focus on ensuing gainful employment.

11. Social Responsibility Your Company believes in being a responsible part of the community

and contributing back to it in every possible manner. SWAT (Students Working Against Tobbaco) is a youth initiative initiated by EMDI and its students against tobacco, operating at an awareness platform. The objective of SWAT is to urge India’s youth to stay away from the ravages and dangers of smoking. The purpose is to persuade young people to never try smoking and to encourage those who are trying to get rid of the habit of smoking. The SWAT team has taken various initiatives in the form of events to spread this message over the years by organizing Smoke Free Bike Rally, College Festival Activities, Candle Walk, Loud and Proud Smoke Free Rock Concert etc.

Another Social Initiative of the company is a Don’t Drink and Drive campaign. According to statistics that are available with the Home Ministry, out of the 75,000 road accidents, 75% are due to the human errors which include drunken and rash driving. The accidents owing to drunken driving have increased considerably. Innumerable lives have been lost. The EMDI initiative, ‘IF BAR, NO CAR’ aims at

highlighting the consequences of drinking and driving. EMDI students walked the stretch, in their bid to educate people, especially the youth with placards carrying messages like ‘Stay Alive’, Don’t Drink and Drive’, ‘You Booze, You Cruise, You Lose’, ‘Drive Hammered, Get Slammered’ by organizing rally.

Our business is focused on delivering good products and services to our customers and creating wealth for our shareholders; we must also be mindful of our contribution to society and use our finite capital and time to contribute to advancing the wealth of knowledge in society and making the lives of young people more fulfilling.

12. Internal Control Systems The Company recognizes the importance of internal controls and

has suitable internal control systems and processes in place for the smooth conduct of the business. Company’s internal controls are commensurate with its size and nature of its business. Internal control systems in the Company are intended to provide reasonable assurance that assets are safeguarded against loss from unauthorized use and all transactions are executed in accordance with Management’s authorization and properly and promptly recorded and accounting records are adequate for the preparation of financial statements and other financial information. The management continuously reviews the internal control systems and procedures to ensure orderly and efficient conduct of business. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors and independent Audit Committee.

13. Discussion on Financial Performance with respect to Operational Performance

The financial performance of the year ending March 31, 2013 reflects the steps have been initiated to become a more focused company, moving into areas where we have huge opportunities and greater long term potential.

The authorized share capital of the Company is ` 11,70,00,000/- divided into 1,70,00,000 equity shares of ` 10/- each. The paid up share capital of the Company is ̀ 6,00,77,150/- divided into 60,07,715 equity shares of par value ` 10/- each.

Highlights of the Company’s standalone financial performance are as under:

(` in thousand)

Particulars 2012-2013 2011-2012Revenues 43122.78 54030.89PBDIT (2757.11) (2334.66)PBT and Exceptional Items (7447.76) (7030.92)PBT (7447.76) (7030.92)PAT (6271.79) (6499.90)EPS:- Basic Diluted

(1.04)(0.82)

(1.08)(0.89)

14. Human Resources The Company firmly believes that its human resources are its true

assets and constitute the most vital force in moving the organization forward. The key management is responsible for the day-to-day operations and they are indeed the key force in driving the business growth. The Company has strong management team with experience and expertise and focus in the areas of media and entertainment education. The management team effectively plans and oversees implementation of growth strategies. We believe that the strong and experienced management team enables us to understand the needs and preferences of the student community and industry that is critical for overall success and growth of the Company. To reduce attrition levels, the Company has initiated a number of programs that include an empowered work environment, learning opportunities, employee friendly policies and competitive compensation packages.

FORWARD LOOKING STATEMENT Forward-looking statement in this Annual Report should be read

in conjunction with the following cautionary statements. Certain expectations and projections regarding future performance of the Company referenced in this Annual Report are forward – looking statements. These expectations and projections are based on currently available competitive, financial and economic data along with the Company’s operating plans and are subject to certain future events and uncertainties, that could cause actual results to differ materially from those that may be indicated by such statements. The Company undertakes no obligations to publicly update or revise any forward-looking statements, whether as a new information, future events or otherwise.


12

To the Members of Greycells Education Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Greycells Education Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by The Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For Ford, Rhodes, Parks & Co.Chartered Accountants

Firm’s Registration No. 102860W

Astha KariyaPlace : Mumbai PartnerDate : 30th May, 2013 Membership No. 122491

INDEPENDENT AUDITOR’S REPORT


13

ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph thereof)

As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956 (the Act), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of the audit, we further report that: -1. a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of its fixed assets.

b) The fixed assets of the Company have been physically verified by the management during the year and there were no material discrepancies noticed on such physical verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its business.

c) During the year, the Company has not disposed off a substantial part of fixed assets so as to affect the going concern status of the Company.

2. The Company did not hold any inventories during the year. 3. a) The Company has granted interest bearing unsecured loans

to two companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was ` 22,551,584 and the year-end balance of such loans granted was ` 15,431,901.

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company

c) These loans given by the Company are repayable on demand. d) Since the above loans are repayable on demand, the question

of overdue amount does not arise e) The Company has taken an interest bearing loan from a party

covered in the register maintained under Section 301 of the Act. The maximum amount of such loans involved during the year was ` 2,559,178 and the year-end balance of loans taken from such party was NIL.

f) In our opinion, the rate of interest and the other terms and conditions of the aforesaid loan taken by the Company are prima facie not prejudicial to the interest of the Company.

g) The Company is regular in the repayment of interest on the above loan. As informed to us there were no stipulation as to the repayment of the principal amount of this loan but the same has been repaid during the year.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regard to purchase of fixed assets and for the sale of services. During the course of our audit, we have neither been informed nor have we observed any continuing failure to correct major weaknesses in internal controls.

5. a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

b) Based on the information and explanations given to us, we are unable to comment on whether such transactions exceeding the value of rupees five lakhs in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices, as no comparative prices were available in view of the exclusive nature of these transactions.

6. The Company has not accepted any deposits from the public within the meaning of the provisions of Sections 58A and 58AA or any relevant provisions of the Act.

7. The Company has no internal audit system in operation during the year. However, in our opinion, the Company had adequate internal controls in place during the year, commensurate with its size and the nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956, of the Company.

9. a) According to the information and explanations given to us by management and on the basis of the examination of the books of account carried out by us, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Excise Duty, Cess and other statutory dues, wherever applicable, with the appropriate authorities. There were no undisputed arrears of statutory dues outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, sales-tax, wealth tax, service-tax, customs duty, and excise duty which have not been deposited as on 31st March, 2013 on account of any disputes.

10. The accumulated losses of the Company as at 31st March, 2013 are not more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and also in the immediately preceding financial year.

11. In our opinion, and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of its dues to any financial institution or bank. The Company has not issued any debentures during the year.

12. As per the books and records of the Company examined by us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause (xiii) of the Order is not applicable, as the Company is not a chit fund company or nidhi / mutual benefit fund / society.

14. The Company has not dealt or traded in shares, securities, debentures or other investments during the year.

15. According to the information given to us and as per the records examined by us, the Company has not given any guarantee for the loans taken by others from banks or financial institutions during the year.

16. As per the information and explanations given to us, the Company has not taken or utilized any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures during the year. 20. The Company has not raised any money by public issue during the

year.21. According to the information and explanations given to us by the

management and on the basis of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of fraud on or by the Company during the year.

For Ford, Rhodes, Parks & Co.Chartered Accountants

Firm’s Registration No. 102860W

Astha KariyaPlace : Mumbai PartnerDate : 30th May, 2013 Membership No. 122491


14

As Per Our Report of Even Date For and on behalf of the board

For Ford, Rhodes, Parks & Co.Chartered AccountantsFirm's Registration No. 102860W

Nowshir EngineerManaging Director

Bela DesaiDirector

Astha KariyaPartnerMembership No: 122491Place : MumbaiDated : 30th May, 2013

Dharmesh ParekhCompany Secretary

Balance Sheet as at 31st March, 2013 Notes As At 31st March, 2013 As At 31st March, 2012

` `

EQUITY AND LIABILITIES

Shareholders' Funds

(a) Share Capital 2 60,081,025 60,081,025

(b) Reserves and Surplus 3 180,722,843 169,119,634

(c) Money Received Against Share Warrants 4 8,400,000 17,875,000

Non - Current Liabilities

(a) Long-Term Provisions 5 408,852 319,013

Current Liabilities

(a) Trade Payables 6 1,988,546 1,834,695

(b) Other Current Liabilities 7 7,513,167 9,366,855

(c) Short-Term Provisions 8 75,854 881

Total 259,190,287 258,597,103

ASSETS

Non-current Assets

(a) Fixed Assets 9

(i) Tangible Assets 2,540,377 5,359,012

(ii) Intangible Assets 1,000,000 2,727,184

(b) Non-Current Investments 10 213,014,810 213,014,810

(c) Deferred Tax Assets (net) 11 2,843,048 1,568,060

(d) Long-Term Loans and Advances 12 3,005,806 3,019,886

Current Assets

(a) Current Investments 13 4,000,000 -

(b) Trade Receivables 14 173,996 981,142

(c) Cash and Cash Equivalents 15 14,320,397 2,204,661

(d) Short-Term Loans and Advances 16 17,958,039 26,388,617

(e) Other Current Assets 17 333,815 3,333,731

Total 259,190,287 258,597,103

Summary of significant accounting policies 1

Notes to Financial Statements 1-32


15

StatementofProfitandLossfortheyearended31stMarch,2013

Notes Year Ended 31st March, 2013

`

Year Ended 31st March, 2012

`

Revenue from Operations 18 39,030,790 50,951,055

Other Income 19 4,091,987 3,079,831

Total Revenue 43,122,777 54,030,886

Expenses:

Direct Expenses 20 15,231,325 20,310,116

Employee Benefit Expenses 21 6,219,183 7,410,448

Other Expenses 23 24,429,379 28,644,984

Depreciation and Amortization Expense 9 4,534,487 4,696,258

Finance Costs 22 156,167 -

Total Expenses 50,570,541 61,061,806

Profit/(Loss) Before Tax (7,447,764) (7,030,920)

Tax Expense : (1,175,973) (531,018)

Current Tax - -

Deferred Tax 11 (1,274,988) (553,854)

Prior Years Tax Adjustments 99,015 22,836

Profit/(Loss) for the Year (6,271,791) (6,499,902)

Earnings per equity share in ` - Basic 31 (1.04) (1.08)

- Diluted (0.82) (0.89)

Summary of significant accounting policies 1

Notes to the financial statements. 1-32




Bela DesaiDirector




16

Cash Flow Statement for the year ended 31st March, 2013 31st March, 2013 31st March, 2012

` `Cash Flow from Operating ActivitiesNet Loss before tax (7,447,764) (7,030,920)Adjustments for:Depreciation / Amortization 4,534,487 4,696,258Amortization of Ancillary Cost - 294,443Provision for Doubtful Debts and Advances 2,099,922 -Preliminary Expenses Written-off - 40,700Loss on Sale of Assets 11,175 -Interest Expenses 156,167 -Interest on Loan to Subsidiaries (2,370,990) (1,049,696)Interest on Fixed Deposits (663,559) (725,449)Dividend Income - (127,100)Interest on Income Tax Refund (12,392) -Net Exchange Fluctuation Gain (916,583) (528,415)

Operating Profit/(Loss) before working capital changes (4,609,536) (4,430,179)Adjustments for:Trade and other Payables 153,851 (1,103,194)Provisions 164,812 (9,464)Other Current Liabilities (1,853,688) 555,186Trade Receivables 664,516 642,464Loans and Advances 600,882 (974,045)Other Current Assets 2,999,916 (760,407)Unrealised Exchange Gain 916,583 528,415

3,646,872 (1,121,045)Cash generated / (used in) operations (962,664) (5,551,224)Direct taxes (paid) / refund (154,190) (421,883)Interest on Income Tax Refund 12,392 -Net prior year adjustments (99,014) (22,836)Net Cash from Operating Activities (1,203,476) (5,995,943)Cash Flow from Investing ActivitiesPurchase of Fixed Assets - (364,004)Proceeds from sale\scrap of Fixed Assets 160 -Redemption of Current Investments - 18,570,826Purchase of Current Investments (4,000,000) -Repayment of Loan from Subsidiaries 6,040,671 (15,211,665)Interest on Loan to Subsidiaries 2,370,990 1,049,696Interest Income 663,559 725,449Dividend Income - 127,100

Net Cash from Investing Activities 5,075,380 4,897,402Cash Flow from Financing ActivitiesShare Warrant money received 8,400,000 -Interest Paid (156,167) -

Net Cash from Financing Activities 8,243,833 -Net Increase/(Decrease) in cash and cash equivalents 12,115,736 (1,098,543)Cash and Cash equivalents at the beginning of the year (Opening Balances) 2,204,661 3,303,204Cash and Cash equivalents at the end of the year (closing Balances) 14,320,397 2,204,661Components of Cash and Cash Equivalents:Cash on Hand 15,169 43,103Balance with Bank 14,305,228 2,161,558

14,320,397 2,204,661Notes:1. The Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard 3 "Cash Flow Statement".2. Previous year figures have been re-grouped and rearranged wherever necessary.As Per Our Report of Even Date For and on behalf of the board



Bela DesaiDirector




17

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

a. Accounting Convention

The Accompanying Financial Statements have been prepared in accordance with the historical cost convention and in accordance with the Companies Act, 1956 and in all material aspects with applicable accounting standards issued by the Institute of Chartered Accountants of India.

b. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. Income from the student fees are recognized over the period of instruction of course. Non-refundable premier relationship fees receivable under business association agreements are taken to income as and when due.

Dividend income is accounted for as and when declared.

c. Fixed assets and depreciation

Fixed assets are carried at cost of acquisition less accumulated depreciation / amortization.

a) The Company provides depreciation on tangible fixed assets as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

b) Intangible assets are amortized as under :

i) Goodwill over the period of five years.

ii) Trade Mark over the period of ten years.

iii) Capital expenditure on office improvement is amortized equally over the lease period.

d. Impairment of Assets

At each balance sheet date the Company reviews the carrying value of assets for any possible impairment. An impairment loss is recognized when the carrying amount of asset exceeds its recoverable amount which is the higher of net realizable amount as on the Balance Sheet date and the present value of the economic benefit resulting from the future use of the asset.

e. Investments

Investments are capitalized at cost of acquisition plus incidental expenses. Provision for diminution in the value of long term investments is made in accordance with Accounting Standard 13 issued by the Institute of Chartered Accountants of India.

f. EmployeeBenefits

The Company provides for gratuity benefits to its employees as per the provisions of The Payment of Gratuity Act, 1972. The gratuity benefit scheme is unfunded and provision for the same is made on actuarial basis.

g. Foreign Currency Translation

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the statement of profit & loss of the year.

Monetary assets and liabilities in foreign currency, which are outstanding as at the year end are translated at the year end at the closing exchange rate & resultant exchange difference are recognized in the statement of profit & loss.

Non monetary assets & non-monetary liabilities denomination in foreign currency and are measured at historical cost are translated at exchange rate prevailing at the date of transaction.

h. Provisions and Contingent Liabilities

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are disclosed in the notes to accounts.

i. Taxation

Provision for taxation has been made in accordance with the Income Tax laws prevailing for the relevant assessment years.

j. Deferred Tax

Deferred tax assets / liabilities resulting from timing differences between book and tax profits is accounted for at the current rate of tax to the extent that the timing differences are expected to crystallize in future. Deferred tax assets in respect of carried forward business losses and unabsorbed depreciation as per Income Tax provisions is recognized only if there is virtual certainty of recoupment of the same out of future taxable income.


18

Notes to Financial Statements for the year ended 31st March, 201331st March, 2013 31st March, 2012

` `

2 Share Capital:Authorized :11,700,000 (previous year 8,000,000) Equity shares of ` 10 each 117,000,000 80,000,000

117,000,000 80,000,000Issued, subscribed and fully paid-up 6,007,715 Equity shares of `10 each 60,077,150 60,077,150Forfeited Shares Amount paid up on 1,550 forfeited Equity Shares 3,875 3,875

60,081,025 60,081,025

a During the year, the company has increased its Authorised Share Capital by 3,700,000 Equity Shares of ` 10 each leading to increase in the authorised share capital from ` 80,000,000 to ` 117,000,000 .

b Terms and Rights:The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share.In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c The above issued, subscribed and paid up share capital includes 5,40,000 equity shares which were issued to Mr.Nowshir Engineer pursuant to acquisition of EMDI (Overseas) FZ LLC for consideration other than cash in the past five years.The above issued, subscribed and paid up share capital includes 2,276,215 Equity shares of ` 10 each fully paid up which were issued on rights basis at the premium of ` 40 per share in last five years.

d Shareholders holding more than 5% of Shares

Name of the ShareholderBela Naishadh Desai No. of Shares 494,100 494,100

% holding 8.22% 8.22%Krisma Investments Pvt Ltd No. of Shares 711,317 711,317

% holding 11.84% 11.84%Koppara Sajeeve Thomas No. of Shares 884,390 884,390

% holding 14.72% 14.72%Nowshir Rusi Engineer No. of Shares 421,000 421,000

% holding 7.01% 7.01%Religare Finvest Ltd No. of Shares 687,162 600,000

% holding 11.44% 9.99%

3 Reserves and Surplus:

Securities Premium

As per last Balance Sheet 285,579,100 285,579,100

Closing Balance 285,579,100 285,579,100

General Reserve

As per last Balance Sheet 880,566 880,566

Closing Balance 880,566 880,566

Capital Reserve

As per last Balance Sheet - -

Add: Share Warrant Forfeited 17,875,000 -

Closing Balance 17,875,000 -

DeficitinStatementofProfitandLoss:

As per Last Balance sheet (117,340,032) (110,840,130)

Add: Deficit for the year as per the Statement of Profit And Loss (6,271,791) (6,499,902)

Closing Balance (123,611,823) (117,340,032)

180,722,843 169,119,634


19

31st March, 2013`

31st March 2012`

4 Share Warrants:

Equity Share Warrants

1,300,000 partly paid share warrants of ` 55 each, ` 13.75 paid up . 17,875,000 17,875,000

Add: 1,600,000 partly paid share warrants of ` 21 each, ` 5.25 paid up . 8,400,000 -

Less:Share Warrants forfeited transferred to Capital Reserve 17,875,000 -

8,400,000 17,875,000

During the year, the Company has made further issue of 1,600,000 partly paid convertible share warrants for cash to Non Promoter Group on preferential allotment basis. These share warrants are convertible into equity shares of ` 10 each at a premium of ` 11 per share in the ratio 1:1 and the so converted equity shares shall rank parri passu in all respects with the existing equity shares of the Company. As per SEBI (ICDR) Regulations, 2009, the conversion of these warrants will be made within the period of 18 months from the date of allotment in one or more tranches subject to full payment being received and on such terms and conditions as the Board may deem appropriate. If the investors do not opt for the conversion of the warrants, the upfront amount so paid would stand forfeited by the Company and all the rights attached to the warrants shall lapse automatically. As per the terms of issue of the share warrants, an amount equivalent to 25% of the issue price of the warrants amounting to ` 84,00,000 was received and is retained under share warrants.

The Company had also issued 13,00,000 Share Warrants of ` 10 each in the financial year 2010-11 at a price of ` 55 (including premium of ` 45). As per the terms of the issue, since the 18 month period expired and holders did not opt for conversion, the same is forfeited by the Company during the year and shown under Capital Reserve.

5 Non Current Liabilities:

Long-term Provisions

Provision for Employee Benefits:

Gratuity 408,852 319,013

408,852 319,013

6 Current Liabilities:

Trade Payables 1,988,546 1,834,695

1,988,546 1,834,695

7 Other Current Liabilities:

Advance Fees Received 6,789,245 8,937,489

Other Payables 723,922 397,031

TDS Payable - 29,515

Professional Tax Payable - 2,820

7,513,167 9,366,855

8 Short-term Provisions:

Provision for Employee Benefits

Gratuity 12,206 881

Leave Encashment 63,648 -

75,854 881

Notes to Financial Statements for the year ended 31st March, 2013


20


9 Fixed Assets: Amount in `

Gross Block Depreciation Net Block

As at 31/03/2012

Additions During the

Year

Disposals During the

Year

As at 31/03/2013

Up to 31/03/2012

For the Year

On Disposals

Up to 31/03/2013

W.D.V. as on

31/3/2013

W.D.V. as on

31/03/2012

Tangible Assets:

Furniture And Fixtures 1,157,106 - 5,880 1,151,226 578,554 104,105 3,586 679,073 472,153 578,552

Office Equipments 2,348,527 - - 2,348,527 705,649 230,003 - 935,652 1,412,875 1,642,877

Computer System 3,422,091 - 29,500 3,392,591 2,770,227 260,568 20,459 3,010,335 382,256 651,864

Library Books 172,149 - - 172,149 172,149 - - 172,149 - -

Office Improvements 6,269,110 - - 6,269,110 3,783,390 2,212,627 - 5,996,017 273,093 2,485,720

Total A 13,368,983 - 35,380 13,333,603 8,009,969 2,807,303 24,046 10,793,226 2,540,377 5,359,012

Intangible Assets:

Goodwill 7,635,920 - - 7,635,920 6,108,736 1,527,184 - 7,635,920 - 1,527,184

Trade Marks 2,000,000 - - 2,000,000 800,000 200,000 - 1,000,000 1,000,000 1,200,000

Computer Software 350,000 - - 350,000 350,000 - - 350,000 - -

Total B 9,985,920 - - 9,985,920 7,258,736 1,727,184 - 8,985,920 1,000,000 2,727,184

Total (A+B) 23,354,903 - 35,380 23,319,523 15,268,705 4,534,487 24,046 19,779,146 3,540,377 8,086,196

Previous Year 68,473,207 364,004 45,482,368 23,354,903 10,572,448 4,696,258 - 15,268,705 8,086,196

31st March 2013 31st March 2012

` `

10 Non Current Investments:

Trade Investments (Unquoted, at cost )

In subsidiaries:

50 Equity Shares of AED 1000 each in EMDI (Overseas) FZ LLC. 161,002,810 161,002,810

10,400 Equity Shares of ` 10 each in Eduhub Education Pvt.Ltd. 1,612,000 1,612,000

Non Trade Investment (Unquoted, at cost)

In Others:

245,554 Equity Shares of ` 10 each in AAT Academy India Ltd. 50,400,000 50,400,000

50,000 Equity Shares of ` 10 each in Minds Eye Production Pvt.Ltd. 13,000,000 13,000,000

63,400,000 63,400,000

Less: Provision For Diminution In Value Of Investment in Minds Eye Production Pvt.Ltd. 13,000,000 13,000,000

213,014,810 213,014,810

11 Deferred Tax Assets / (Liabilities):

Deferred Tax Asset (Gross) :

On Depreciation Differential 2,064,065 1,258,439

On Right Issue Expenses - 210,774

On Provision of Gratuity 130,107 98,847

On Provision for Doubtful Debts 648,876 -

2,843,048 1,568,060

Deferred Tax Liability (Gross) : - -

Deferred Tax Asset (Net) : 2,843,048 1,568,060

No Deferred tax asset has been recognized on unabsorbed depreciation and carried forward business losses as there is no virtual certainty that the same will be realized out of future taxable income.


21


31st March 2013`

31st March 2012`

12 Long Term Loans and Advances

(Unsecured and Considered Good):

Security Deposits 2,226,000 2,226,000

Advance Tax (Net of Provision): 779,806 793,886

3,005,806 3,019,886

13 Current Investments:

Quoted units of Mutual Fund (valued at lower of cost or market value )

IDFC Dynamic Bond Fund 4,000,000 -

(Market Value ` 4,003,235.76)

4,000,000 -

14 Trade Receivable - Unsecured:

Debts overdue for more than six months :

Considered Good 173,996 592,762

Considered Doubtful 142,630 -

Other Debts Considered Good - 388,380

316,626 981,142

Less : Provision for Doubtful Debts 142,630 -

173,996 981,142

15 Cash and Cash Equivalents:

Balances with Bank-Current Account 14,305,228 2,161,558

Cash on hand 15,169 43,103

14,320,397 2,204,661

16 Short Term Loans / Advances:

(Unsecured, Considered Good)

Loans to Subsidiaries:

Loan to EMDI (Overseas) FZ LLC 12,231,901 16,972,572

Loan to Eduhub Education Pvt Ltd. 3,200,000 15,431,901 4,500,000 21,472,572

Security Deposits - 906,375

Advances net of Provisions 809,815 641,548

Balances with Statutory Authorities 855,713 1,146,265

Loan to Employees 61,800 78,680

Prepaid Expenses 798,810 2,143,177

17,958,039 26,388,617

17 Other Current assets

Accrued Interest on Fixed Deposit 333,815 -

Receivable From Business Associate (see Note 27) 1,957,292 3,333,731

Less: Provision For Doubtful Receivable 1,957,292 - - 3,333,731

333,815 3,333,731


22

31st March 2013`

31st March 2012`

18 Revenue from Operations

Course Fees 37,830,790 50,951,055

Income from Premier Relationship fees 1,200,000 -

39,030,790 50,951,055

19 Other Income

Interest Income on:

Bank Fixed Deposits 663,559 725,449

Loan to Subsidiary 2,370,990 1,049,696

Loan to Business Associate 34,592 171,296

3,069,141 1,946,441

Dividend Income On:

Current Investment - 127,100

Provision No Longer Required Written Back - 217,748

Exchange Gain Fluctuation (Net) 916,583 528,415

Sundry Balance written off 74,340 -

Interest on IT Refund 12,392 -

Miscellaneous Income 19,531 260,127

4,091,987 3,079,831

20 Cost of Services Rendered (direct)

Faculty Fees 3,228,967 5,142,013

Business Auxiliary Services 10,630,590 14,206,019

Certification Fees 1,050,516 631,340

Student Activities 321,252 330,745

15,231,325 20,310,116

21 EmployeeBenefitExpenses

Salaries, Wages and Bonus 5,911,851 7,144,261

Staff Welfare Expenses 134,750 217,476

Leave Encashment 71,418 58,175

Gratuity Expenses 101,164 (9,464)

6,219,183 7,410,448

22 Finance Cost:

Interest 156,167 -

156,167 -


23


24 The Company has carried out business operations only in the segment of ‘Vocational Education’ during the year. The Company does not have more than one segment eligible for reporting in terms of Accounting Standard 17 issued by The Institute of Chartered Accountant of India.

25 No vendors have informed the Company of their being registered under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, as per the information available with the Company, there are no amounts payable to such vendors as at the year end.

26 Managerial Remuneration:

PARTICULARS 2012-13 2011-12

(`) (`)

Salary and Allowances - 177,699

27 The business association with Mrs. Ruchi Mahajan has concluded in terms of Memorandum of Understanding. The balance outstanding amount of ` 19,57,292 which is doubtful of recovery has been provided for in the financial statement under the head “Other Current Assets”.

28 Foreign Currency Income and ExpensesPARTICULARS 2012-13 2011-12

(`) (`)Earnings In Foreign CurrencyInterest 1,935,293 596,918Expenses in Foreign CurrencyTravelling 106,074 36,242

29 The Company operates an unfunded gratuity scheme for its employees. The disclosures in respect of the scheme as required in the Accounting Standard 15 – ‘Employee Benefits’, issued by the Institute of Chartered Accountants of India’ are given below :

DefinedBenefitPlans

Gratuity Scheme (Unfunded Scheme)

In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:-

31st March 2013`

31st March 2012`

23 Other Expenses:

Electricity Charges 618,793 636,789

Rent 8,426,559 9,673,916

Repair and Maintenance 310,510 577,588

Rates and Taxes 41,620 48,709

Auditors Remuneration

Audit Fees 80,000 80,000

Others 60,000 50,000

Limited Review Fees 45,000 45,000

Legal and Professional Fees 5,553,663 7,801,355

Advertisement and Marketing Expenses 4,713,705 7,244,921

Directors Sitting Fees 16,000 13,000

Postage and Courier 61,274 33,149

Printing and Stationery 193,084 389,274

Company Law Matter and Listing Fees 561,923 204,924

Telephone Expenses 424,944 654,193

Travelling Expenses 521,533 519,087

Conveyance Expenses 442,657 372,958

Loss on Sale/Scrapping of Fixed Assets 11,175 -

Preliminary Expenses - 40,700

Bad Debts Written-off - 5,896,574

Less: Provision on Bad Debts Adjusted - 5,896,574 -

Intangible Asset Written-off 45,482,368

Less: Impairment Provision Adjusted - 45,482,368 -

Provision For Doubtful Debts 142,630 -

Provision For Doubtful Receivable from Business Associate Refer Note No: 27 1,957,292 -

Other Miscellaneous Expenses 247,017 259,421

24,429,379 28,644,984


24

I Assumptions as at Valuation Date Valuation Date31st March, 2013 31st March, 2012

Mortality LIC(1994-96)Ult LIC(1994-96)UltDiscount Rate 8.05% 8.25%Rate of increase in compensation

6% 6%

Rate of return (expected) on plan assetsWithdrawal rates 2% 2%

II Changes in present value of obligations

2012-13(`)

2011-12(`)

PVO at beginning of period 319,894 329,358Interest cost 27,991 27,127Current Service Cost 133,936 139,977Benefits Paid (transfer out as at 31.12.2011)

- -

Actuarial (gain)/loss on obligation (60,763) (176,613)PVO at end of period 421,058 319,894

III Changes in fair value of plan assets

2012-13(`)

2011-12(`)

Fair Value of Plan Assets at beginning of period

- -

Adjustment to Opening Fair Value of Plan Assets

- -

Expected Return on Plan Assets - -Contributions - -Benefit Paid - -Actuarial gain/(loss) on plan assets - -Fair Value of Plan Assets at end of period

- -

IV Fair Value of Plan Assets 2012-13(`)

2011-12(`)


- -


- -

Actual Return on Plan Assets - -Contributions - -Benefit Paid - -Fair Value of Plan Assets at end of period

- -

Funded Status (421,058) (319,894)Excess of actual over estimated return on Plan Assets

- -

V Actuarial Gain/(Loss) Recognized 2012-13(`)

2011-12(`)

Actuarial Gain/(Loss) for the period (Obligation)

60,763 176,613

Actuarial Gain/(Loss) for the period (Plan Assets)

- -

Total Gain/(Loss) for the period 60,763 176,613

Actuarial Gain/(Loss) recognized for the period

60,763 176,613

Unrecognized Actuarial Gain/(Loss) at end of period

- -

VI Amounts to be recognized in the Balance Sheet and Statement of Profit&LossAccount

2012-13(`)

2011-12(`)

PVO at end of period 421,058 319,894Fair Value of Plan Assets at end of period

- -

Funded Status (421,058) (319,894)Unrecognized Actuarial Gain/(Loss) - -Net Asset/(Liability) recognized in the balance sheet

(421,058) (319,894)

VII Expense recognized in the statement of P & L A/C

2012-13(`)

2011-12(`)

Current Service Cost 133,936 139,977Interest cost 27,991 27,127Expected Return on Plan Assets - -Net Actuarial (Gain)/Loss recognized for the period

(60,763) (176,613)

Expense recognized in the statement of P & L A/C

101,164 (9,464)

VIII Movements in the Liability recognized in Balance Sheet

2012-13(`)

2011-12(`)

Opening Net Liability 319,894 329,358Adjustment to Opening Fair Value of Plan Assets

- -

Expenses as above 101,164 (9,464)Contribution paid - -Closing Net Liability 421,058 319,894

IX Experience Anyalisis - Liabilities 2012-13(`)

2011-12(`)

Actuarial (Gain)/Loss due to change in bases

36,391 -

Experience (Gain) / Loss due to Change in Experience

(97,154) -

Total (60,763) (176,613)Experience Anyalisis - Plan AssetsExperience (Gain) / Loss due to Change in Plan Assets

- -

X Schedule VI Details 2012-13(`)

2011-12(`)

Current Liability 12,206 881Non-Current Liability 408,852 319,013

30 Related Party Disclosures : (A) List of Companies under Common Control Subsidiaries EMDI (Overseas) FZ LLC Eduhub Education Pvt Ltd

(B) Names of related parties with whom transactions have taken place during the year / previous year :



25

Notes to Financial Statements for the year ended 31st March, 2013a) Key Management Personnel : Mr.Deepak Chaudhary till 30th June, 2011b) Transactions with Related Parties :

Nature of Transactions Subsidiaries With Key Managerial Personnel

Loan Given by the CompanyEMDI (Overseas) FZ LLC -

(14,288,941)Eduhub Education Pvt Ltd -

(3,200,000)Loan given received backEMDI (Overseas) FZ LLC 5,578,811

(3,391,188)Eduhub Education Pvt Ltd 1,300,000

-Business auxiliary services paidEduhub Education Pvt Ltd 3,231,731

(2,957,176)Interest chargedEMDI (Overseas) FZ LLC 1,935,293

(596,918)Eduhub Education Pvt Ltd 435,697

(452,778)Managing Director's Remuneration -

(177,699)Balances of related enterprises at the year end: Debit /(Credit)EMDI (Overseas) FZ LLC 12,231,901

(16,972,572)Eduhub Education Pvt Ltd 3,200,000

(4,500,000)* Figures in bracket indicate previous year figures




Bela DesaiDirector



31 Earning Per Equity Share

2012-13 2011-12

Profit After Tax (6,271,791) (6,499,902)

Number of Equity Shares- Basic 6,007,715 6,007,715

Number of Equity Shares- Diluted 7,607,715 7,307,715

Earning Per Share (Basic) (1.04) (1.08)

Earning Per Share (Diluted) (0.82) (0.89)

32 Previous period figures have been regrouped / recast wherever necessary to make them comparable.


26

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANY

Name of the Subsidiary EMDI (Ovearseas) FZ LLC Eduhub Education Pvt.Ltd.

(A) The Financial Year of the Subsidiary Company 31st March, 2013 31st March, 2013

(B) Shares of the Subsidiary held by GREYCELLS EDUCATION LIMITED on the above dates

(a) Number and face value 50 Equity Shares of AED 1000each fully paid up.

20,400 Equity Shares of ` 10/-each fully paid up.

(b) Extent of holding 100% 51%

( C ) The net aggregate of Profit/(Loss) of the Subsidiary Companies so far as it concerns the members of GREYCELLS EDUCATION LTD.

(a) not dealt with In the accounts of GREYCELLS EDUCATION LTD. for the year ended March 31, 2013 amounted to-

(i) For the subsidiary’s financial year ended as in (A) above. AED 3,69,593 ` (1,91,541)

(ii) For the previous financial years of the subsidiary since they became the Holding Company’s Subsidiary.

AED (5,32,150) ` (29,02,624)

(b) dealt with in the accounts of the GREYCELLS EDUCATION LTD. for the year ended March 31, 2013 amounted to-

(i) For the Subsidiary’s financial year ended as in (A) above. NIL NIL

(ii) For the previous financial years of the Subsidiary since they became the Holding Company’s Subsidiary.

NIL NIL

Name of the Company

Share Capital

Reserves TotalAssets

TotalLiabilities

Details of Investment

Turnover Profit Before

Taxation

Provision for

Taxation

Profit/(loss)After

Taxation

ProposedDividend

AED AED AED AED AED AED AED AED AED AED

EMDI (Overseas) FZ LLC

50,000 (1,260,881) 670,210 1,881,091 - 2,769,140 369,593 - 369,593 -

` ` ` ` ` ` ` ` ` `

Eduhub Education Pvt.Ltd

204,000 (4,558,990) 2,895,431 7,250,421 - 11,870,995 (487,941) (112,371) (375,571) -


27

INDEPENDENT AUDITOR’S REPORTTo the Board of Directors of Greycells Education Limited

We have audited the accompanying consolidated financial statements of Greycells Education Limited (“the Company”) and its subsidiaries (the Company and its subsidiaries constitutes “the group”), which comprise the Consolidated Balance Sheet as at 31st March, 2013, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

The Company’s Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by The Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the consolidated financial statements.

Other Matter

We did not audit the financial statements of the subsidiaries, whose financial statements reflect total assets of `173.81 lacs as at 31st March, 2013, total revenues of ` 512.41 lacs and total expenditure ` 470.28 lacs for the year ended on that date, as considered in the consolidated financial statements.

These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion, in so far as it relates to the amounts and disclosures included in respect of the subsidiaries, is based solely on the report of the other auditors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries, the aforesaid consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at 31st March , 2013;

(b) in the case of the consolidated Statement of Profit and Loss, loss of the Group for the year ended on that date; and

(c) in the case of the consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

Matter of Emphasis

We draw attention to note 34 to the consolidated financial statements, which states the that although the net worth of one of the subsidiary – EMDI (Overseas) FC LLC is completely eroded the same is consolidated on going concern basis for reasons stated in the said note.

For Ford, Rhodes, Parks & Co.

Chartered AccountantsFirm’s Registration No. 102860W

Astha Kariya Place : Mumbai Partner Date : 30th May, 2013 Membership No. 122491


28

Consolidated Balance Sheet as at 31st March, 2013 Notes As At 31st March, 2013 As At 31st March, 2012

` `

EQUITY AND LIABILITIES

Shareholders' Funds

(a) Share Capital 2 60,081,025 60,081,025

(b) Reserves and Surplus 3 171,051,782 156,013,945

(c) Money Received Against Share Warrants 4 8,400,000 17,875,000

Minority Interest (2,163,680) (1,979,651)

Non - Current Liabilities

(a) Long-Term Provisions 5 2,232,791 1,428,891

Current Liabilities

(a) Short-Term Borrowings 6 1,000,000 782,683

(b) Trade Payables 7 2,003,563 1,860,399

(c) Other Current Liabilities 8 24,400,124 21,433,383

(d) Short-Term Provisions 9 75,854 881

Total 267,081,460 257,496,556

ASSETS

Non-Current Assets

(a) Fixed Assets 10

(i) Tangible Assets 4,749,170 8,755,912

(ii) Intangible Assets 174,213,263 175,953,447

(b) Non-Current Investments 11 50,400,000 50,400,000

(c) Deferred Tax Assets (net) 12 2,995,285 1,607,926

(d) Long-Term Loans and Advances 13 3,785,706 4,336,998

Current Assets

(a) Current Investments 14 4,000,000 -

(b) Trade Receivables 15 1,020,940 1,598,826

(c) Cash and Cash Equivalents 16 19,914,527 4,617,276

(d) Short-Term Loans and Advances 17 5,668,754 6,892,440

(e) Other Current Assets 18 333,815 3,333,731

Total 267,081,460 257,496,556

Significant accounting policies 1

Notes to the Financial Statements. 1-35




Bela DesaiDirector




29

Consolidated Statement of Profit and Loss for the year ended 31st March, 2013

Notes Year Ended 31st March, 2013

Year Ended 31st March, 2012

` `

Revenue from Operations 19 87,128,532 87,604,100

Other Income 20 824,427 2,160,097

Total Revenue 87,952,959 89,764,197

Expenses:

Direct Expenses 21 16,072,557 21,066,983

Employee Benefit Expenses 22 20,931,737 20,290,967

Finance Costs 23 156,657 39,532

Depreciation and Amortization 10 5,616,298 5,971,256

Other Expenses 24 49,292,745 53,515,258

Total Expenses 92,069,994 100,883,996

Profit/(Loss) Before Exceptional Items And Tax (4,117,035) (11,119,798)

Exceptional Items - -

Profit /(Loss) Before Tax (4,117,035) (11,119,798)

Tax Expense : (1,288,343) (570,815)

Current Tax - -

Deferred Tax 12 (1,387,358) (593,651)

Previous Year Tax 99,015 22,836

Profit /(Loss) for the Year (2,828,692) (10,548,983)

Less: Minority Interest (184,030) (1,823,193)

Profit /(Loss) for the Year (2,644,662) (8,725,790)

Earnings per equity share in ` - Basic 32 (0.44) (1.45)

- Diluted (0.35) (1.19)

Significant accounting policies 1

Notes to the Financial Statements. 1-35




Bela DesaiDirector




30

Consolidated Cash Flow Statement for the year ended 31st March, 2013 31st March 2013 31st March 2012

` `Cash Flow from Operating ActivitiesNet Loss before tax (4,117,035) (11,119,798)Adjustments for:Depreciation / Amortization 5,616,298 5,971,256 Amortization of Ancillary Cost - 294,490 Provision for Doubtful Debts and Advances 2,329,439 - Preliminary Expenses Written-off - 40,700 Loss on sale of Assets 240,427 49,839 Interest Expenses 156,657 39,532 Interest on Fixed Deposits (663,559) (725,449)Dividend Income - (127,100)Interest on Income Tax Refund (12,392) - Operating Profit / (Loss) before working capital changes 3,549,835 (5,576,531)Adjustments for:Trade and Other Payables 143,164 (1,487,556)Provisions 878,873 204,343 Other Current Liabilities 2,966,740 4,261,536 Trade Receivables 205,740 684,561 Loans and Advances 44,726 (2,252,018)Other Current Assets 2,999,916 (760,407)

7,239,159 650,459 Cash generated / (used in) operations 10,788,994 (4,926,072)Direct taxes (paid) / refund (227,040) (455,539)Interest on Income Tax Refund 12,392 - Net prior year adjustments (99,009) (22,836)Cash Flow before extraordinary items 10,475,337 (5,404,447)Extraordinary items / Exceptional Items - - Foreign Currency Traslation Reserve (192,500) (1,908,667)Net Cash from Operating Activities 10,282,837 (7,313,114)

Cash Flow from Investing ActivitiesPurchase of Fixed Assets (138,669) (1,040,416)Proceeds from sale\scrap of Fixed Assets 28,863 2,500 Proceeds from sale of Non- current Investments - 18,570,826 Purchase of Current Investments (4,000,000) -Interest Income 663,559 725,449 Dividend Income - 127,100

Net Cash used in Investing Activities (3,446,247) 18,385,459 Cash Flow from Financing ActivitiesShare Warrant money received 8,400,000 - Interest (156,657) (39,532)Short term Loans taken during the year 300,000 - Short term Loans repaid during the year (82,683) (12,142,341)Net Cash from Financing Activities 8,460,660 (12,181,873)

Net Increase / (Decrease) in cash and cash equivalents 15,297,250 (1,109,528)Cash and Cash equivalents at the beginning of the year (Opening Balances) 4,617,276 5,726,804 Cash and Cash equivalents at the end of the year (closing Balances) 19,914,527 4,617,276 Components of Cash and Cash Equivalents:Cash on Hand 32,105 51,302 Balance with Bank 19,882,422 4,565,974

19,914,527 4,617,276 Notes:1. The Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard 3 "Cash Flow Stateement".2. Previous year figures have been re-grouped and rearranged wherever necessary.




Bela DesaiDirector




31

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

a. Accounting Convention

The Accompanying Financial Statements have been prepared in accordance with the historical cost convention and in accordance with the Companies Act, 1956 and in all material aspects with applicable accounting standards issued by the Institute of Chartered Accountants of India.

Principles of Consolidation

The consolidated financial statements are prepared on following basis:

i) The Financial Statements of Subsidiaries have been combined on the line by line basis by adding together the book value of like items of assets, liabilities, income, expenditure after eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses.

ii) The consolidated financial statements are prepared by adopting uniform accounting policies for like transactions or other events in similar circumstances and are presented to the extent possible, in the same manner as the parent company's financial statements.

iii) The functional currency of the Parent Company is Indian Rupee. The functional currency of the subsidiary is its respective local currency. Its accounts are converted from its local currency to Indian Rupees in the following manner :

All income and expenses items are translated at the average rate of exchange applicable for the period. All monetary and non-monetary assets and liabilities are translated at the closing rate as on Balance Sheet date. The equity share capital is stated at the exchange rate at the date of investment. The exchange difference arising out of the year/period end translation is debited or credited to Foreign Currency Translation Account.

iv) The difference between the Company's cost of investment in the subsidiaries over its portion of equity at the time of acquisition of shares is recognized in the consolidated financial statements as Goodwill or Capital Reserve as the case may be.

b. Revenue Recognition

The Group follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. Income from the student fees are recognized over the period of instruction of course. Non-refundable premier relationship fees receivable under business association agreements are taken to income as and when due.

Dividend income is accounted for as and when declared.

c. Fixed assets and depreciation

Fixed assets are carried at cost of acquisition less accumulated depreciation / amortization.

a) The Group provides depreciation on tangible fixed assets as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

b) Intangible assets are amortized as under :

i) Goodwill over the period of five years. ii) Trade Mark over the period of ten years. iii) Capital expenditure on office improvement is amortized equally over the lease period

d. Impairment of Assets

At each balance sheet date the Group reviews the carrying value of assets for any possible impairment. An impairment loss is recognized when the carrying amount of asset exceeds its recoverable amount which is the higher of net realizable amount as on the Balance Sheet date and the present value of the economic benefit resulting from the future use of the asset.

e. Investments

Investments are capitalized at cost of acquisition plus incidental expenses. Provision for diminution in the value of long term investments is made in accordance with Accounting Standard 13 issued by the Institute of Chartered Accountants of India.

f. Employee Benefits

The Company provides for gratuity benefits to its employees as per the provisions of The Payment of Gratuity Act, 1972. The gratuity benefit scheme is unfunded and provision for the same is made on actuarial basis.

g. Foreign Currency Translation

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the profit & loss account of the year.

Monetary assets and liabilities in foreign currency, which are outstanding as at the year end are translated at the year end at the closing exchange rate & resultant exchange difference are recognized in the profit & loss account.

Non monetary assets & non-monetary liabilities denomination in foreign currency and are measured at historical cost are translated at exchange rate prevailing at the date of transaction.

h. Provisions and Contingent Liabilities

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are disclosed in the notes to accounts.

i. Taxation

Provision for taxation has been made in accordance with the Income Tax laws prevailing for the relevant assessment years.

j. Deferred Tax

Deferred tax assets / liabilities resulting from timing differences between book and tax profits is accounted for at the current rate of tax to the extent that the timing differences are expected to crystallise in future. Deferred tax assets in respect of carried forward business losses and unabsorbed depreciation as per Income Tax provisions is recognized only if there is virtual certainty of recoupment of the same out of future taxable income.

Notes to Consolidated Financial Statements for the year ended 31st March, 2013


32


31st March, 2013`

31st March, 2012`

2 Share Capital:Authorized :

11,700,000 (previous year 8,000,000) Equity shares of `10 each 117,000,000 80,000,000

Issued, subscribed and fully paid-up

6,007,715 Equity shares of `10 each 60,077,150 60,077,150

Forfeited Shares

Amount paid up on 1,550 forfeited Equity Shares 3,875 3,875

60,081,025 60,081,025

a During the year, the company has increased its Authorised Share Capital by 3,700,000 Equity Shares of `10 each leading to increase in the authorised share capital from `80,000,000 to `117,000,000 .

b Terms and Rights:The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is entitled to one vote per share.In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c The above issued, subscribed and paid up share capital includes 5,40,000 equity shares which were issued to Nowshir Engineer pursuant to acquisition of EMDI (Overseas) FZ LLC for consideration other than cash in the past five years.The above issued, subscribed and paid up share capital includes 2,276,215 Equity shares of `10 each fully paid up were issued on rights basis at the premium of `40 per share in last five years.

d Shareholders holding more than 5% of Shares

Name of the ShareholderBela Naishadh Desai No. of Shares 494,100 494,100

% holding 8.22% 8.22%Krisma Investments Pvt Ltd No. of Shares 711,317 711,317

% holding 11.84% 11.84%Koppara Sajeeve Thomas No. of Shares 884,390 884,390

% holding 14.72% 14.72%Nowshir Rusi Engineer No. of Shares 421,000 421,000

% holding 7.01% 7.01%Religare Finvest Ltd No. of Shares 687,162 600,000

% holding 11.44% 9.99%

3 Reserves and Surplus:Securities Premium:

As per last Balance Sheet 285,579,100 285,579,100 Closing Balance 285,579,100 285,579,100 General Reserve :As per last Balance Sheet 880,566 880,566Closing Balance 880,566 880,566Capital Reserve:As per last Balance Sheet - - Add: Share Warrant Forfeited 17,875,000 - Closing Balance 17,875,000 - Exchange Fluctuation Reserve:As per Last Balance sheet (2,965,932) (1,057,265)Add: Addition during the year (192,500) (1,908,667)Closing Balance (3,158,432) (2,965,932)Deficit in Statement of Profit and Loss:As per Last Balance sheet (127,479,789) (118,753,999)Add: Deficit for the year as per the Statement of Profit and Loss (2,828,692) (10,548,983)Less: Minority Interest 184,030 1,823,193 Closing Balance (130,124,451) (127,479,789)

171,051,782 156,013,945


33


31st March, 2013`

31st March, 2012`

4 Share Warrants:

Equity Share Warrants

1,300,000 partly paid share warrants of ` 55 each, `13.75 paid up. 17,875,000 17,875,000

Add: 1,600,000 partly paid share warrants of ` 21 each, ` 5.25 paid up. 8,400,000 -

Less:Share Warrants forfeited transferred to Capital Reserve 17,875,000 -

8,400,000 17,875,000

During the year, the Company has made further issue of 1,600,000 partly paid convertible share warrants for cash to Non Promoter Group on preferential allotment basis. These share warrants are convertible into equity shares of `10 each at a premium of ` 11 per share in the ratio 1:1 and the so converted equity shares shall rank parri passu in all respects with the existing equity shares of the Company. As per SEBI (ICDR) Regulations, 2009, the conversion of these warrants will be made within the period of 18 months from the date of allotment in one or more tranches subject to full payment being received and on such terms and conditions as the Board may deem appropriate. If the investors do not opt for the conversion of the warrants, the upfront amount so paid would stand forfeited by the Company and all the rights attached to the warrants shall lapse automatically. As per the terms of issue of the share warrants, an amount equivalent to 25% of the issue price of the warrants amounting to ` 84,00,000 was received and is retained under share warrants.

The company had also issued 13,00,000 Share Warrants of ` 10 each in the financial year 2010-11 at a price of ` 55 (including premium of ` 45). As per the terms of the issue, since the 18 month period expired and holders did not opt for conversion, the same is forfeited by the company during the year and shown under Capital Reserve.

5 Non Current Liabilities:

Long-term Provisions

Provision for Employee Benefits 2,232,791 1,428,891

2,232,791 1,428,891

6 Current Liabilities:

Short Term Borrowings

Loan from directors 300,000 -

Other Loans 700,000 782,683

1,000,000 782,683

7 Trade Payables 2,003,563 1,860,399

2,003,563 1,860,399

8 Other Current Liabilities:

Advance Fees Received 23,215,532 19,876,541

Other Creditors 1,140,747 1,455,737

TDS Payable 43,070 97,135

Professional Tax Payable 775 3,970

24,400,124 21,433,383

9 Short-term Provisions

Provision for Employee Benefits

Gratuity 12,206 881

Leave Encashment 63,648 -

75,854 881


34

31st March 2013 31st March 2012` `

11 Non Current Investments:Non Trade Investment (Unquoted, at cost)In Others:245,554 Equity Shares of `10 each in AAT Academy India Ltd. 50,400,000 50,400,000

50,000 Equity Shares of `10 each in Minds Eye Production Pvt.Ltd. 13,000,000 13,000,000

63,400,000 63,400,000Less: Provision For Diminution In the Value Of Investment in Minds Eye Production Pvt.Ltd. 13,000,000 13,000,000

50,400,000 50,400,000

12 Deferred Tax Assets /(Liabilities):Deferred Tax Asset (Gross) : On Depreciation Differential 2,124,602 1,298,305 On Right Issue Expenses - 210,774 On Provision of Gratuity 130,107 98,847 On Provision for Doubtful Debts 648,876 - On Provision of Bonus 91,700 -

2,995,285 1,607,926

Deferred Tax Liability (Gross) : - - Deferred Tax Asset (Net) : 2,995,285 1,607,926

No Deferred tax asset has been recognized on unabsorbed depreciation and carried forward business losses as there is no virtual certainty that the same will be realized out of future taxable income.

13 Long Term Loans and Advances (Unsecured and Considered Good):Security Deposits 3,005,900 3,477,350 Advance Tax And TDS Net of Provision 779,806 859,648

3,785,706 4,336,998

Notes to Consolidated Financial Statements for the year ended 31st March, 201310 Fixed Assets: Amount `

Gross Block Depreciation Net Block

As at 31/03/2012

Additions During the

Year

Disposals During the

Year

As at 31/03/2013

Up to 31/03/2012

For the Year

On Disposals

Up to 31/03/2013

W.D.V. as on 31/03/2013

W.D.V. as on 31/03/2012

Tangible Assets:

Furniture And Fixtures 6,185,192 42,414 375,221 5,852,386 3,091,404 900,266 123,485 3,868,184 1,984,202 3,093,789

Office Equipments 2,901,333 10,125 6,140 2,905,318 818,519 292,093 1,300 1,109,312 1,796,006 2,082,814

Computer System 4,170,705 86,130 38,200 4,218,635 3,266,267 370,434 25,486 3,611,215 607,420 904,445

Motor Car 475,410 - - 475,410 287,359 99,602 - 386,961 88,450 188,051

Library Books 185,879 - - 185,879 184,786 1,093 - 185,879 - 1,093

Office Improvements 6,269,110 - - 6,269,110 3,783,390 2,212,627 - 5,996,017 273,093 2,485,720

Total A 20,187,630 138,669 419,561 19,906,738 11,431,724 3,876,114 150,271 15,157,568 4,749,170 8,755,912

Intangible Assets:

Goodwill 7,635,920 - - 7,635,920 6,108,736 1,527,184 - 7,635,920 - 1,527,184

Goodwill on Cosolidation 173,187,263 - - 173,187,263 - - - - 173,187,263 173,187,263

Computer Software 350,000 - - 350,000 350,000 - - 350,000 - -

Trade Marks 2,065,000 - - 2,065,000 826,000 213,000 - 1,039,000 1,026,000 1,239,000

Total B 183,238,183 - - 183,238,183 7,284,736 1,740,184 - 9,024,920 174,213,263 175,953,447

Total (A+B) 203,425,813 138,669 419,561 203,144,921 18,716,460 5,616,298 150,271 24,182,488 178,962,433 184,709,359

Previous Year 247,927,554 1,040,416 45,542,218 203,425,813 12,752,715 5,971,256 7,511 18,716,460 184,709,359


35

Notes to Consolidated Financial Statements for the year ended 31st March, 201331st March 2013 31st March 2012

` `

14 Current InvestmentsQuoted units of Mutual Fund (valued at lower of cost or market value )IDFC Dynamic Bond Fund 4,000,000 - (Market Value `4,003,235.76)

4,000,000 -

15 Trade Receivable - Unsecured:Debts overdue for more than six months :Considered Good 1,098,704 1,042,057 Considered Doubtful 142,360 - Other Debts Considered Good 155,171 556,769

1,396,235 1,598,826 Less : Provision for Doubtful Debts 375,295 -

1,020,940 1,598,826

16 Cash and Cash EquivalentsBalances with Bank-Current Account 19,882,422 4,565,974 Cash on hand 32,105 51,302

19,914,527 4,617,276

17 Short Term Loans/ Advances:(Unsecured, Considered Good)Security Deposits - 906,375 Advance Tax (Net of Provisions) 948,430 641,548 Balances with Statutory Authorities 867,188 1,222,752 Loans and Advances to Employees 61,800 78,680 Advance to a Director 74,481 71,181 Other Advances 211,663 - Prepaid Expenses 3,505,192 1,960,941

5,668,754 6,892,440

18 Other Current Assets:Accrued Interest on Fixed Deposit 333,815 - Receivable From Business Associate (see Note 27) 1,957,292 3,333,731 Less: Provision For Doubtful Receivable 1,957,292 - - 3,333,731

333,815 3,333,731 19 Revenue from Operations

Course Fees 85,928,532 87,604,100 Income from Premier Relationship fees 1,200,000 -

87,128,532 87,604,100

20 Other IncomeInterest Income on:Bank Fixed Deposits 663,559 725,449 Loan to Business Associate 34,592 171,296

698,151 896,745 Dividend Income On: Current Investment - 127,100 Provision No Longer Required written Back - 283,568 Interest on Income Tax Refund 12,392 1,600 Rental Income 92,340 331,072 Miscellaneous Income 21,544 520,012

824,427 2,160,097


36


31st March 2013 31st March 2012 ` `

21 Cost of Services Rendered (direct): Faculty Fees 6,711,748 8,161,212 Business Auxiliary Services 7,486,333 11,549,238 Certification Fees 1,050,516 631,340 Student Activity 823,960 725,194

16,072,557 21,066,983 22 Employee Benefit Expenses:

Salaries, Wages and Bonus 19,819,768 19,738,380 Staff Welfare Expenses 291,302 350,902 Leave Encashment Expenses 93,284 - Gratuity Expenses 727,383 201,685

20,931,737 20,290,967

23 Finance CostInterest 156,657 39,532

156,657 39,532 24 Other Expenses

Electricity Charges 709,843 733,359 Rent and Other Compensation 15,023,714 17,920,820 Repair and Maintenance 1,256,258 1,404,136 Rates and Taxes 506,988 482,035 Auditors Remuneration

Audit Fees 234,263 292,639 Others 95,000 50,000 Limited Review Fees 45,000 45,000

Legal and Professional Fees 8,568,989 10,021,009 Advertisement and Marketing Expenses 15,406,425 17,920,859 Directors Sitting Fees 16,000 13,000 Postage and Courier 80,112 53,600 Printing and Stationery 381,929 623,684 Company Law Matter and Listing Fees 561,923 204,924 Telephone Expenses 1,136,542 1,384,314 Travelling Expenses 912,928 883,158 Conveyance Expenses 505,449 457,326 Loss on Sale/Scrapping of Fixed Assets 240,427 49,839 Preliminary Expenses - 40,700 Bad Debts Written-off 209,308 6,094,035 Less: Provision on Bad Debts Adjusted - 209,308 5,896,574 197,461 Intangible Asset Written-off - 45,482,368 Less: Impairment Provision Adjusted - 45,482,368 - Provision For Doubtful Debts 372,147 - Provision For Doubtful Receivable from Business Associate Refer Note No: 27

1,957,292 -

Other Miscellaneous Expenses 1,072,208 737,395 49,292,745 53,515,258


37

25 No vendors have informed the Company of their being registered under the Micro, Small and Medium Enterprises Development Act, 2006. Hence, as per the information available with the Company, there are no amounts payable to such vendors as at the year end.

26 Managerial Remuneration:PARTICULARS 2012-13

(`)2011-12

(`)Salary and Allowances 6,355,063 4,647,384

27 The business association with Mrs. Ruchi Mahajan has concluded in terms of Memorandum of Understanding. The balance outstanding amount of ` 19,57,292 which is doubtful of recovery has been provided for in the financial statement under the head "Other Current Assets".

28 The Group has carried out business operations only in the segment of ‘Vocational Education’during the year. The Company does not have more than one segment eligble for reporting in terms of Accounting Standard 17 issued by The Institute of Chartered Accountant of India.

29 The Company operates an unfunded gratuity scheme for its employees. The disclosures in respect of the scheme as required in the Accounting Standard 15 – ‘Employee Benefits’, issued by the Institute of Chartered Accountants of India’ are given below :Defined Benefit PlansGratuity Scheme (Unfunded Scheme)In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was performed in respect of the aforesaid defined benefit plans based on the following assumptions:-

I Assumptions as at Valuation Date Valuation Date31st March, 2013 31st March, 2012

Mortality LIC(1994-96)Ult LIC(1994-96)UltDiscount Rate 8.05% 8.25%Rate of increase in compensation

6% 6%

Rate of return (expected) on plan assetsWithdrawal rates 2% 2%

II Changes in present value of obligations

2012-13(`)

2011-12(`)

PVO at beginning of period 319,894 329,358Interest cost 27,991 27,127Current Service Cost 133,936 139,977Benefits Paid (transfer out as at 31.12.2011)

- -

Actuarial (gain)/loss on obligation (60,763) (176,613)PVO at end of period 421,058 319,894

III Changes in fair value of plan assets

2012-13(`)

2011-12(`)


- -


- -

Expected Return on Plan Assets - -Contributions - -Benefit Paid - -Actuarial gain/(loss) on plan assets - -Fair Value of Plan Assets at end of period

- -

IV Fair Value of Plan Assets 2012-13(`)

2011-12(`)


- -


- -

Actual Return on Plan Assets - -Contributions - -Benefit Paid - -Fair Value of Plan Assets at end of period

- -

Funded Status (421,058) (319,894)Excess of actual over estimated return on Plan Assets

- -

V Actuarial Gain/(Loss) Recognized 2012-13(`)

2011-12(`)

Actuarial Gain/(Loss) for the period (Obligation)

60,763 176,613

Actuarial Gain/(Loss) for the period (Plan Assets)

- -

Total Gain/(Loss) for the period 60,763 176,613Actuarial Gain/(Loss) recognized for the period

60,763 176,613

Unrecognized Actuarial Gain/(Loss) at end of period

- -

VI Amounts to be recognized in the Balance Sheet and statement of Profit & Loss Account

2012-13(`)

2011-12(`)

PVO at end of period 421,058 319,894Fair Value of Plan Assets at end of period

- -

Funded Status (421,058) (319,894)Unrecognized Actuarial Gain/(Loss) - -Net Asset/(Liability) recognized in the balance sheet

(421,058) (319,894)

VII Expense recognized in the Statement of P & L A/C

2012-13(`)

2011-12(`)

Current Service Cost 133,936 139,977Interest cost 27,991 27,127Expected Return on Plan Assets - -Net Actuarial (Gain)/Loss recognized for the period

(60,763) (176,613)

Expense recognized in the statement of P & L A/C

101,164 (9,464)

VIII Movements in the Liability recognized in Balance Sheet

2012-13(`)

2011-12(`)

Opening Net Liability 319,894 329,358Adjustment to Opening Fair Value of Plan Assets

- -

Expenses as above 101,164 (9,464)Contribution paid - -Closing Net Liability 421,058 319,894


38

IX Experience Anyalisis - Liabilities 2012-13(`)

2011-12(`)

Actuarial (Gain)/Loss due to change in bases

36,391 -

Experience (Gain) / Loss due to Change in Experience

(97,154) -

Total (60,763) (176,613)Experience Anyalisis - Plan AssetsExperience (Gain) / Loss due to Change in Plan Assets

- -

X Schedule VI Details 2012-13(`)

2011-12(`)

Current Liability 12,206 881Non-Current Liability 408,852 319,013

30 The subsidiary companies considered in the financial statements are:Name of the Subsidiaries Country of

IncorporationProportion

of ownership interest

Accounting year ending on

EMDI (Overseas) FZ LLC U.A.E. 100% 31/03/2013

Eduhub Education Pvt. Ltd. India 51% 31/03/2013

31 Related Party Disclosures: (a) List of Companies under Common Control - Nil(b) Key Management Personnel : Mr. Deepak Chaudhary till 30th June, 2011 Mr. Nowshir Engineer Mrs. Rasika Kulkarni

(c) Transactions with Related Parties

Nature of Transactions

With Key Managerial Personnel

2012-13 2011-12(`) (`)

Managing Director's Remuneration 6,355,063 5,418,933

32 Earning Per Share

Profit After Tax (2,644,662) (8,725,790)Number of Equity Shares 6,007,715 6,007,715 Number of Equity Shares- Diluted 7,607,715 7,307,715 Earning Per Share (Basic) (0.44) (1.45)Earning Per Share (Diluted) (0.35) (1.19)

33 The negative minority interest (debit balance) represents minority share of losses in the subsidiary to the extent the minority have binding obligation to make good the same.

34 The financial results of one of the subsidiary - EMDI (Overseas) FC LLC are consolidated in the above financial statement as a going concern basis although the net worth of the subsidiary has got completely eroded. The continuation of the business was then dependent on the financial support provided by the parent holding company. During the financial year(s) 2012 & 2013, the subsidiary has repaid part of the loans given by the parent holding company alongwith interest out of profits generated from business activities. The trend for the last two years being positive, the trend continuing, the management is hopeful of a turnaround for the subsidiary company.

35 Previous period figures have been regrouped / recast wherever necessary to make them comparable.




Bela DesaiDirector




39

ATTENDANCE SLIPGREYCELLS EDUCATION LIMITED

D-2, 1st Floor, Poddar Chamber, 126, Mathuradas Compound, N.M. Joshi Marg, Lower Parel (West), Mumbai - 400013

(Please complete this Attendance Slip and hand it over at the entrance of the meeting hall)

I hereby record my presence at the Annual General Meeting of the Shareholders of the Company being held on Monday,

September 30, 2013 at 9.30 a.m. at D-2, 1st Floor, Poddar Chambers, 126, Mathuradas Compound, N.M. Joshi Marg, Lower

Parel (West), Mumbai – 400013

Folio No. No. of Shares held

DP Id. Client Id.

Name of the Shareholder: (1st name)

(Joint Holder)

Name of Proxy (To be filled in case of the proxy attends instead of shareholder)

Signature of Shareholder/Proxy* * Strike out whichever is not applicable

Signed this day of 2013

Note : The proxy form must be returned so as to reach the Registered Office of the Company not less than 48 hours before the time for holding the aforesaid meeting. The proxy need not be a shareholder of the Company.

PROXY FORM

GREYCELLS EDUCATION LIMITEDD-2, 1st Floor, Poddar Chamber, 126, Mathuradas Compound, N.M. Joshi Marg, Lower Parel (West), Mumbai - 400013

Folio No. No. of Shares held

DP Id. Client Id.

I/We

of being a member/members of GREYCELLS EDUCATION

LIMITED hereby appoint of or

failing him/her of as

my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on Monday,

September 30, 2013 or any adjournment thereof.

Affix a` 1/-

RevenueStamp

TEAR HERE Tear

Her

e

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