The Directors take pleasure in presenting the First Annual Report of
 the Company together with Audited Statement of Accounts for the period
 from January 4, 2010 being the date of incorporation of the Company, up
 to March 31, 2011.
 
 FINANCIAL PERFORMANCE
 
                                                        (Amount in Rs.)
 Particulars                                       For the period ended
                                                   march 31, 2011
 
 Sales & Services                                      438,981,035
 
 Other Income                                           10,880,542
 
 Total Income                                          449,861,577
 
 Total Expenses                                        415,457,629
 
 Operating Profit                                       34,403,948
 
 Less: Finance Cost                                      1,455,155
 
 Less: Depreciation                                      7,527,362
 
 Profit before tax                                      25,421,431
 
 Provision for Taxation (Net)                            6,900,745
 
 Profit after tax                                       18,520,686
 
 Balance Carried to Balance Sheet                       18,520,686
 
 
 DIVIDED
 
 With a view to conserve resources for funding any future business
 requirements and expansion plans, your Directors have not recommended
 any dividend on Equity Shares for the period under review.
 
 SHARE CAPITAL & VESTING OF EDUCATION BUSINESS UNDERTAKING PURSUANT TO
 THE SCHEME
 
 During the period under review, the Authorised Share Capital of the
 Company was sub-divided & increased from Rs. 5,00,000/- (Rupees Five
 Lacs only) divided into 50,000 (Fifty Thousand) Equity Shares of Rs.
 10/- (Rupees Ten only) each to Rs. 15,00,00,000/- (Rupees Fifteen Crores
 only) divided into 15,00,00,000 (Fifteen Crores) Equity Shares of Rs.
 1/- (Rupee one) each.
 
 Your Company was incorporated as a special purpose vehicle with a view
 to acquire the Education Business Undertaking demerged from Zee
 Entertainment Enterprises Limited (ZEEL), pursuant to a Composite
 Scheme of Amalgamation and Arrangement approved by Honble Bombay High
 Court vide order passed on July 16, 2010. The said Scheme became
 effective from August 30, 2010 and consequently all assets and
 liabilities of Education Business Undertaking of ZEEL as at April 1,
 2010 (Appointed Date) were transferred to and vested on the Company
 with effect from Effective Date. In pursuance of the said Demerger, the
 Company had allotted and issued 12,22,38,599 (Twelve Crores Twenty Two
 Lacs Thirty Eight Thousand Five Hundred Ninety Nine) Equity Shares of
 Rs. 1/- each of the Company to the shareholders of ZEEL, in the ratio of
 1 (one) Equity Share of Rs. 1/- each of the Company for every 4 (four)
 Equity Shares of Rs. 1/- each held in ZEEL. Thereafter the entire issued
 Equity Shares of the Company were listed and admitted for trading on
 the Bombay Stock Exchange Ltd.  and the National Stock Exchange of
 India Ltd. with effect from December 20, 2010.
 
 BUSINESS OVERVIEW
 
 During the period under review, your Company earned revenue of Rs. 43.89
 crores and Net Profit after tax of Rs. 1.85 crores.  This performance is
 on the back of over 46,500 enrolments in Kidzee, over 3,700 enrolments
 in Mount Litera Zee Schools, 1,263 enrolments in Zee Institute of
 Creative Arts (ZICA) and 290 enrolments in Zee Institute of Media
 Arts (ZIMA). Your Company also added 206 new Kidzees, 33 new Mount
 Litera Zee Schools and 10 new ZICAs into its franchise system during
 the period under review. Your Company entered the School Solutions
 segment with Zee Learn School Innovations (ZLSI), which offers Zee
 Learn Gakken Science Academies (ZLGSA) to schools that want to
 improve the performance and understanding of their students in Science.
 During the period under review 51 schools signed up for ZLGSAs.
 
 Your Companys performance during the period makes it the largest chain
 of preschools in India and one of the fastest growing K-12 school
 chains. With ZLGSA, your Company is the only organized Activity Based
 Learning solutions providers to schools in the country.
 
 MERGER OF ESSEL ENTERTAINMENT MEDIA LIMITED WITH THE COMPANY
 
 The Scheme of Amalgamation for merger of Essel Entertainment Media
 Limited (EEML) with the Company, approved by the Members at the Court
 Convened General Meeting held on March 28, 2011, awaits approval of
 Honble Bombay High Court.  As per the said Scheme, EEML shall merge
 with the Company with effect from March 31, 2011 (Appointed Date).
 However pending receipt of final approval from Honble Bombay High
 Court, the effect of the Scheme of Amalgamation is not given in the
 financial statements for the period ended March 31, 2011. Details of
 Assets and Liabilities of EEML as at March 31, 2011, which will vest on
 the Company upon effectiveness of the Scheme of Amalgamation is given
 in Schedule 17B Note 2B of the Notes to Accounts. Upon approval of
 Honble Bombay High Court and the Scheme becoming effective, your
 Company would be required to issue 14,00,00,000 (Fourteen Crores)
 equity shares of Rs. 1/- each of the Company, to the shareholders of
 EEML, in ratio of 1 (one) Equity Share of Rs. 1/- each of the Company
 for every 5 (five) Equity Shares of Rs. 1/- each of EEML.
 
 With a view to facilitate issuance of further Equity Shares in
 accordance with the Scheme of Amalgamation, your Directors have subject
 to your approval, approved a proposal for increase in Authorised Share
 Capital of the Company from Rs. 15,00,00,000/- (Rupees Fifteen Crores
 only) divided into 15,00,00,000 (Fifteen Crores) Equity Shares of Rs.
 1/- each to Rs. 30,00,00,000/- (Rupees Thirty Crores) divided into
 30,00,00,000 (Thirty Crores) Equity Shares of Rs. 1/- each. Requisite
 proposal seeking Members approval for the proposed increase in the
 Authorised Share Capital forms part of the Notice of ensuing Annual
 General Meeting.
 
 CREDIT RATING AND VESTING OF NON-CONVERTIBLE DEBENTURES
 
 Pursuant to the Composite Scheme of Amalgamation and Arrangement, the
 Non-Convertible Debentures (NCDs) of Rs. 50,00,00,000/- (Rupees Fifty
 Crores only) issued by the erstwhile ETC Networks Ltd. were transferred
 and vested on the Company. The said NCDs are listed on Wholesale Debt
 Market Segment of the National Stock Exchange of India Ltd.
 
 Credit Analysis & Research Limited (CARE) has reaffirmed the rating of
 CARE AA (SO), assigned to the NCDs issued by the Company. Based on
 the said rating, the said NCDs are construed to offer high safety for
 timely servicing of debt obligation and carries very low credit risk.
 
 EMPLOYEED STOCK OPTION SCHEME
 
 As approved by the Members at the Extra-ordinary General Meeting of the
 Company held on October 13, 2010, your Company has implemented an
 Employee Stock Option Scheme called ZLL ESOP-2010, in accordance with
 Securities and Exchange Board of India (Employee Stock Option Scheme
 and Employee Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines)
 for grant of stock options to its eligible employees. The Remuneration
 Committee of the Board administers and monitors the Scheme.
 
 During the period under review, the Remuneration Committee had pursuant
 to ZLL ESOP 2010, granted 11,07,000 Stock Options convertible into
 equivalent number of equity shares of Rs. 1/- each of the Company. The
 aforesaid grant includes 60,000 Stock Options granted to the
 Non-Executive Independent Directors of the Company. Applicable
 disclosures as stipulated under the SEBI Guidelines as at March 31,
 2011 are annexed herewith and forms part of this report.
 
 The Company has received a Certificate from the Statutory Auditors,
 M/s. MGB & Co., Chartered Accountants, confirming that the Scheme has
 been implemented in accordance with SEBI Guidelines and the resolution
 passed by the shareholders.  The Certificate shall be placed at the
 ensuing Annual General Meeting and a copy of the same shall be
 available for inspection at the Registered Office of the Company on all
 working days (except Saturday and Sunday) between 2.00 p.m.  to. 5.00
 p.m., upto the date of Annual General Meeting.
 
 DIRECTORS
 
 As per Article 84 of the Articles of Association, Mr. Himanshu Mody,
 Dr. Manish Agarwal and Mr. Sumeet Mehta were appointed as First
 Directors of the Company with effect from the date of incorporation of
 the Company i.e. January 4, 2010. Thereafter upon vesting of Education
 Business Undertaking from Zee Entertainment Enterprises Ltd. pursuant
 to the Composite Scheme, your Board had approved appointment of Mr.
 Sumeet Mehta, the Whole-time Director & CEO of the Education Business
 Undertaking of erstwhile ETC Networks Ltd. as Whole-time Director of
 the Company for a period of 3 years with effect from September 1, 2010,
 and Mr. Surjit Banga as an Additional Director of the Company in the
 capacity of Independent Director with effect from September 1, 2010.
 
 The Shareholders of the Company, at the Extra-ordinary General Meeting
 held on October 1, 2010 had approved the appointment of Mr. Surjit
 Banga as a Director and Mr. Sumeet Mehta as a Whole-time Director of
 the Company.
 
 As per the provisions of the Companies Act, 1956 read with Article 97
 of the Articles of Association, Dr. Manish Agarwal, one of the first
 Directors, retires by rotation and being eligible, offers himself for
 re-appointment at the ensuing Annual General Meeting.
 
 Brief Profile of all Directors including Directors proposed to be
 appointed/re-appointed at the ensuing Annual General Meeting has been
 included in the Report on the Corporate Governance forming part of the
 Annual Report.
 
 CORPORATE GOVERNANCE
 
 Your Company is committed to maintain the highest standards of
 Corporate Governance and adhere to the Corporate Governance
 requirements set out in the Listing Agreement with the Stock Exchanges.
 Report on Corporate Governance as stipulated under the Listing
 Agreement(s) with the Stock Exchanges as also the Management
 Discussions and Analysis Report forms part of the Annual Report.
 
 Certificate from the Statutory Auditors of the Company M/s. MGB & Co.,
 Chartered Accountants, Mumbai, confirming compliance with the
 provisions of Corporate Governance as stipulated in Clause 49 of the
 Listing Agreement(s), is annexed to the said Corporate Governance
 Report.
 
 AUDITORS
 
 M/s. MGB & Co., Chartered Accountants, the First Statutory Auditors of
 the Company having firm registration No. 101169W hold office until the
 conclusion of the ensuing Annual General Meeting and are eligible for
 re-appointment. The Company has received a letter from them to the
 effect that their re-appointment, if made, will be in accordance with
 the limits specified under Section 224(1B) of the Companies Act, 1956.
 
 GROUP
 
 Pursuant to the communication received by the Company from the
 Promoters, the names of the Promoters and entities comprising ‘group
 for the purpose of Clause 3(1)(e) of the SEBI (Substantial Acquisition
 of Shares and Takeovers) Regulations, 1997, are disclosed in the Annual
 Report.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 As a responsible citizen, your Company believes that a Business cannot
 succeed in a society that fails and therefore it is imperative for
 business houses, to invest in the future by taking part in CSR
 activities. Being engaged in the education business, CSR activity forms
 part of every business decisions of the Company. As a part of CSR
 activity, the Company through Zee Learn Education Society has been
 providing School Management Services under Public Private Partnership
 to the Schools managed by Gujarat State Tribal Development Residential
 Educational and Institutional Society under the Eklavya Model
 Residential School project of Government of Gujarat. Additionally, the
 Company regularly organizes various Education awareness events/programs
 for the various sections of the Society.
 
 PUBLIC DEPOSITS
 
 During the period under review, your Company has neither accepted nor
 renewed any deposits within the meaning of Section 58A of the Companies
 Act, 1956 and rules made there under.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION and FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Your Company is engaged in the business of delivering learning
 solutions and training to entire spectrum of the society from toddler
 to teens through its multiple products. Since these activities do not
 involve any manufacturing activity, most of the information required to
 be provided under Section 217(1)(e) of the Companies Act, 1956 read
 with the Companies (Disclosure of Particulars in the Report of the
 Board of Directors) Rules, 1988 is not applicable.
 
 However, the information as applicable are given hereunder:
 
 I.  energy Conservation
 
 Your Company being a service provider, requires minimal energy
 consumption and every endeavor has been made to ensure optimal use of
 energy and avoid wastages and conserve energy as far as possible.
 
 II.  technology absorption
 
 In its endeavor to deliver the best to its users and business partners,
 your Company has been constantly active in harnessing and tapping and
 best technology in the industry.
 
 III.  Foreign exchange earning and Outgo
 
 Particulars of foreign exchange earnings and outgo during the period
 under review is given in Schedule 17B Note 15(b) of the Notes to
 Accounts forming part of the Annual Accounts.
 
 PARTICULARS OF EMPLOYEES
 
 No Employee, other than Mr. Sumeet Mehta, Whole-time Director of the
 Company draw remuneration in excess of limits prescribed under the
 Companies (Particulars of Employees) Rules, 1975, as amended. Requisite
 details of remuneration paid to Mr. Sumeet Mehta (during the period
 from September 1, 2010 to March 31, 2011), pursuant to Section 217(2A)
 of
 
 the Companies Act, 1956 read with the Companies (Particulars of
 Employees) Rules, 1975, is as detailed herein:
 
 Name, Designation 
 & Age                          Sumeet Mehta, Whole-time Director, 35
 
 Total Remuneration             Rs. 39,47,880
 
 Qualification                  MBA (IIM, Ahmedabad)
 
 Total Experience & 
 Date of Joining                12 Years, September 1, 2010
 
 Previous Employment            Zee Entertainment Enterprises Ltd.
 
 Total remuneration includes Salary, Bonus, Incentive, Commission,
 Allowances, Leave Travel Assistance, Medical Benefits, Gratuity,
 Companys contribution to Provident Fund and other perquisites and
 benefits valued as per the Income Tax Act, 1961.
 
 DISCLOSURE PURSUANT TO CLAUSE 5A OF THE LISTING AGREEMENT
 
 As per Clause 5A of the Listing Agreement inserted as per SEBI
 notification no. SEBI/CFD/DIL/LA/1/2009/24/04 dated April 24, 2009, the
 details in respect of the shares, which were issued pursuant to the
 Composite Scheme of Amalgamation and Arrangement and lying in the
 suspense account, is as under:
 
 Description                           Number of         Number of
                                       shareholders      equity Shares
 
 Aggregate number of shareholders 
 and the outstanding shares in the
 suspense                                  231            44,645
 account post allotment and 
 issuance on October 14, 2010
 
 Number of shareholders who approached 
 the Company for transfer of
 shares from                                -                -
 suspense account till March 31, 2011
 
 Number of shareholders to whom shares 
 were transferred from the
 suspense                                   -                -
 account till March 31, 2011
 
 Aggregate number of shareholders and 
 the outstanding shares in the
 suspense                                  231            44,645
 account lying as on March 31, 2011
 
 The voting rights on the shares outstanding in the suspense account as
 on March 31, 2011 shall remain frozen till the rightful owner of such
 shares claims the shares. In compliance with the said requirements,
 these shares will be transferred into one folio in the name of
 Unclaimed Suspense Account in due course.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement of Section 217(2AA) of the Companies Act,
 1956, and based on representations received from the operating
 management, the Directors hereby confirm that:
 
 a) in the preparation of the Annual Accounts for the period ended March
 31, 2011, the applicable Accounting Standards have been followed and
 here are no material departures;
 
 b) they have selected such accounting policies in consultation with the
 statutory auditors and applied them consistently and made judgments and
 estimates that are reasonable and prudent so as to give a true and fair
 view of the state of affairs of the Company for the period ended March
 31, 2011 and the profit of the Company for that period;
 
 c) they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 d) they have prepared the Annual Accounts on a going concern basis.
 
 ACKNOWLEDGEMENTS
 
 Your Board takes this opportunity to place on record their appreciation
 for the dedication and commitment of employees shown at all levels,
 Franchisees and Business Partners that have contributed to the success
 of your Company. Your Directors also express their gratitude for the
 valuable support and co-operation received from the Central and State
 Governments including Ministry of Human Resource Development and other
 stakeholders including Bankers, Financial Institutions, Investors,
 Service Providers as well as regulatory and government authorities.
 
                                         For and on behalf of the Board
 
                                      Sumeet mehta          Surjit Banga
                                      Whole-time Director   Director
 
 Place : Mumbai 
 Date  : May 20, 2011