Investor Presentation

May 2011

About Educomp
Educomp is the largest Education company in India and the only company spread across the
entire Education Ecosystem

Educomp currently works with ~25,000 schools and serves over 15.5 million learners and
educators across the world

Educomp owns Indias largest K12 content library with over 16,000 modules of rich 3D
multimedia educational content reaching out to 3.9 million students across ~5,500 private school and 5.8 million students across ~10,550 government schools

Educomp runs ~800 pre-schools, 50 brick & mortar K12 schools, 7 higher-ed colleges, over 275
vocational training centers and has 2.5 million users of its various online businesses

All businesses have a high component of intellectual property and high branding The company has been growing Revenues & Profits at a 5yr CAGR of over 100% with EBITDA
margins close to 50%

Mission: Be among the top five Education Companies Worldwide by 2012

Presence across entire Educational Life Cycle

Online & Supplemental Initiatives

Online & Supplemental Education

Assessments & Counseling

Tutoring Services

Test Preparation Higher Education

E-learning Platforms

Admissions Advisory Services

Vocational Education

Higher & Vocational Initiatives

Digital Content Solutions

High School Initiatives

High Schools

Pre-Schools
PreSchool Initiative s

Professional Development

2 5 years

5 18 years

18 21 years
3

21 25 years

Education Life-Cycle

The only Education Ecosystem Company In India

School Learning Solutions Higher Learning Solutions
Professional Development: Teacher Training in technology integration, pedagogy and best classroom practices. Trained 1.6million teachers till date

Smart Class: Teacher-led educational content solution that dramatically improves learning outcomes in Private Schools. Market leader with presence in 5534 schools

JV with Raffles Education: Professional development programs in Fashion Design, Management, B.Com etc. across 7 colleges EduReach (formerly ICT): Turnkey solutions for computer aided learning in government schools; Only company to have content in 10 regional languages. Market leader with presence in 10550 schools across 13 states

JV with Pearson: Vocational Training programs in English Language training, Accounting, IT, Retail etc. across 279 centers

K12 Schools

Online, Supplemental & Global Initiatives

Pre-Schools (~799 franchisee sign-ups) Roots to Wings: Educomps own pre-school brand; currently 220 preschools franchisee sign-ups EuroKids: 50% stake in Eurokids, the largest pre-school chain in India with 579 pre-schools franchisee sign-ups Vendor to Schools owned & run by independent trusts (currently 50 schools operational, visibility of 81 schools) Millennium Schools: K12 schools in Tier I and Tier II cities Takshila Schools: K12 schools in Tier III and Tier IV cities Universal Academy Schools: Budget schools brand targeted at semi-urban towns with a tuition fee of Rs.800 per month Le Mont High Schools: International Curriculum schools

LearningHour: Premium tutoring centers Mathguru: Indias first & largest online math tutor & content portal WizIQ: Internet Learning Platform to connect students and teachers Learnhub: Social Learning Network Studyplaces: Education portal for admission advisory services EducompOnline: Online Learning & Testing platform Vidya Mandir Classes: Indias premier IITJEE Test Prep organization Gateforum: Indias premier GATE Test Prep organization Learning.com: Leading web based K12 Company in US Ask-N-Learn: Singapore's largest K12 company

The Education opportunity in India is estimated at $40 billion

India Education Overall Market estimated at $40bn growing at CAGR 16%

FY09

FY14

K12 Schools

$ 80bn

$ 40bn
$ 20 billion
$ 7 billion

Higher Education

$ 39 billion

$ 15 billion

$ 4 billion $ 7 billion $ 1.4 billion

Books/ CD Roms/ Stationery/ Multimedia in School Vocational Training $ 15 billion

$ 7 billion

$ 4 billion

Test Prep./ Tutoring

*CLSA Report March 2008

Investment case for Educomp

Educomp benefits from huge cross-selling opportunities by monetizing students across the
education life cycle from age 2 to age 25 years

Flawless execution demonstrated across years Demonstrated innovation in products: SmartClass, Millennium Learning System, One-on-One
Learning, ETEN, VSAT technology, Online learning, Technology integrated Supplemental education etc.

High investment in R&D: 400 people in content development, over 100 people in non-digital
learning materials

Best in class partnerships & Joint Ventures: Raffles Education Corp. for Higher Education and
Pearson plc for Vocational Education

Highly entrepreneurial & experienced management team Best positioned to benefit from the growing middle class aspirations, growing consumption of
quality Educational products as well as growing numbers (because of economic growth, urbanization as well as high birth rates)
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Investment case for Educomp (contd)

High growth:
FY10 consolidated revenues ~$230 million growing at a 5yr CAGR of 108% FY10 consolidated EBITDA ~$107 million growing at a 5yr CAGR of 106% FY10 consolidated PAT ~$60 million growing at a 5yr CAGR of 110%

High profit margins:

EBITDA margins approx. 46% over the last 5 years PAT margins approx. 25% over the last 5 years

Business models with annuity type revenue streams (3yr to 12yr annuity streams) Low levels of penetration even in our most scaled businesses Multiple engines of growth & value creation many of them in early stage
Multimedia in schools K12 schools Higher Education Vocational Education Supplemental Education Internet/ Online Learning
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Multiples engines of growth & value creation

Current Mkt Size Multimedia Content ICT Pre Schools K12 Schools Professional Development Higher Education Vocational Education Online & Supplemental Global $160m $90m $1bn $20bn $15m $7bn $1.4bn $7bn N/A

Educomp Presence SmartClass EduReach Roots to Wings, Eurokids Millennium, Takshila, Universal Academy, Le Mont High Teacher Training Raffles JV Pearson JV Mathguru, WizIQ, VMC, Gateforum, Learnhub, Learning Hour, EduIgnite, EducompOnline, Studyplaces Learning.com, Ask-n-Learn

Current Penetration Market Position <1.5% <2% <3% Shortage of 200,000 schools NM Shortage of 1500 universities NM NM NM No. 1 player No. 1 player No. 1 player No. 1 corporate player No. 1 player Growing presence Among Top 5 players Largest e-learning footprint NM

Value Creation High Medium High High Low High High High High

Educomp Business Description

SmartClass: Empowering Teaching, Inspiring Learning

Covering 5534 schools and ~3.9 million students

What is SmartClass Solution designed to assist teachers & enhance students academic performance Also enables teachers to instantly assess and evaluate the learning achieved

How does it work Indias largest Digital Content library of over 16,000 modules of curriculum-mapped, multimedia rich, 3D content Classrooms are equipped with Plasma screens, Interactive digi-boards and overhead projectors

No of Schools Signed
5534 4585 3921

6000 5000 4000 3000 2000 1000 0 90

3077

CAGR 142%
1737 331 933

FY06

FY07

FY08

FY09

FY10

Q1FY11

Q2FY11

10

Q3FY11

EduReach: Partnering with Govt. to Bridge the Digital Divide

Covering 10,550 schools and ~5.8 million students Overview of ICT Solution Educomp participates in government initiatives in a Public Private Partnership model to IT enable ~1,000,000 government schools in India Educomp sets up Computer Labs in Govt. Schools and provides:
Multimedia Content in regional languages Testing and certification in computer education Full time assistants as well as teacher training Monitoring and Supervision
No of Schools Signed

16000 12012 12000 8000 2808 4000 0 FY06 FY07 FY08 FY09 600

15426

CAGR 125%
6004

FY10

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Pre-Schools Indias largest Pre-School company with ~800 Pre-Schools

First structured and process driven IP in the

fragmented space for early childhood education (2 to 4 years)

Eurokids: Indias leading chain of Pre-Schools

579 pre-schools franchisee sign-ups in the

country catering to over 39,800 kids enrolled from age 2-4

220 pre-schools franchisee sign-ups till

date catering to over 8300 kids

Created pioneering IP of over 100,000

11 Euroschools (K12 schools), operational on

Franchise Basis

pages
Recipient of Best Franchisor Award, 2008 at Roots-to-Wings has been awarded 'Emerging
Franchisor of the Year 2008' for excellence in Franchising and Business Development, by Franchise India Holdings Ltd.
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Franchise India 2008

Creating core K12 Schools capacity

Market Scenario Shortage of 200,000 schools in the country Over 100million school-age children not attending school High birth rates in the region, leading to increase in enrollment numbers Indias middle class has a high willingness to pay for good education Portfolio of Brands K12 schools in Tier I & Tier II cities Co-branded schools with Shriram Schools Co-branded schools with PSBB group of Schools K12 schools in Tier III and IV cities Budget schools with a tuition fee of Rs.800 per month International Curriculum schools
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Educomps Goal Educomp aspires to set up 150 schools in the country Currently 50 schools under operation with 25,000+ students Visibility of 81 schools

Edu-Schools
Strong R&D Capability

Over 750 textbooks and workbooks Over 19,000 Lesson Plans Over 26,000 worksheets Over 11,000 Activities and 3,000 projects Over 500 Teaching manuals

Characteristics of K12 Schools business

Important characteristics of K12 Schools business Assured annuity type revenues till perpetuity and lock-in of customers for 14 years (2 years in Pre-School and 12 years in High School) High margins in steady state High return on capital employed in the range of 30-35% Recession proof business with no volatility Negative Working Capital business High demand supply gap ensures high capacity utilization in all schools High willingness in Indian middle class to pay for good education: Spending on Education is the highest non-food expense category in the consumption basket and is mostly nonnegotiable spend With high growth rates in the country and rising disposable income of middle class parents, there is a high propensity to pay for quality education

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Creating core K12 Schools capacity

The Millennium School, Lucknow

The Millennium School, Mohali

PSBB Learning Leadership Academy, Bangalore

Chiranjiv Bharti, Sushant Lok, Gurgaon

The Millennium School, Noida

The Millennium School, Panipat

The Millennium School, Amritsar

The Millennium School, Kurukshetra

The Millennium School, Patiala

Feb 2011

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Creating core K12 Schools capacity

Takshila School, Hoshiarpur

PSBB Millennium School, Coimbatore

Mussoorie International School

The Millennium School, Meerut

The Millennium School, Nagpur

Le Mont High, Lavasa

Chiranjiv Bharti School, Palam Vihar, Gurgaon

PSBB Millennium School, Chennai OMR

PSBB Millennium School, Chennai Porur

Feb 2011

16

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Creating core K12 Schools capacity

Takshila School, Ahmednagar

Chiranjiv Bharti School, Sushant Lok, Gurgaon

Millennium School, Bhatinda

The Millennium School, Indore

Universal Academy, Dehradun

PSBB Millennium School, GST Road, Chennai

Shriram Millennium School, Noida

Millennium School, Agra

Millennium School, Karnal

Feb 2011

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Rapidly expanding Pan India Presence

Hoshiarpur Firozpur Jalandhar Ludhiana Bhatinda Amritsar Barnala Ambala Panipat Kurukshetra Taoru-Mewat Patiala

Current Location of Schools (Visibility* of 81 Schools, 50 currently Operational)

Kundli Mohali Meerut Dehradun Nagina Noida Kashipur Musoorie Bazpur Faridabad Gadarpur Ghaziabad Gurgaon Nuh Agra Patns Hanumangarh Begusarai Karnal Lucknow Alwar Kanpur Sirka Gaya Jodhpur Gwalior Ahmedabad Nadiad Indore Ahmednagar Airoli Pune Le Mont High Davangere Tumkur Bangalore Tirupur Coimbatore Nagpur Hyderabad Sangli Hassan Sricity Mysore Reddipalayam Tirunelveli Porur Chennai Erode Salem Trichy Madurai Jalna Bhuvneshawar

Guwahati Tura

Land Acquired Operational Takshila Schools Universal Academy/ Vidya Prabhat EuroSchool Le Mont High

* Visibility of Schools covers all Schools (including Dry Management, land sites and under-construction sites

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JV with Raffles for opportunities in Higher Education

An Educomp Raffles Joint Venture

7 Raffles Millennium International colleges operational in Delhi, Bangalore,

Chandigarh, Kolkata, Hyderabad, Ahmedabad and Chennai

RMI offers courses in Fashion Design, Interior Design, Fashion Marketing,

Graphic Design, Product Design, Jewellery Design, Commerce and Interactive Multimedia Design

International faculty from US, UK, Italy, Spain and Singapore Got AICTE approval to launch Engineering & PGDM programs in July/August
2011 in Greater Noida
Delhi Campus

Chennai Campus

Ahmedabad Campus

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Greater Noida Campus

JV with Pearson for opportunities in Vocational Education

An Educomp Pearson Joint Venture

Vocational

Network of 115 centers in place with a target to reach 150 centers Over 37,400 students enrolled ETEN ACE (Civil Services and Bank PO) pilots underway Piloting ETEN Academy of Competitive Exams (over 100 enrolments) Delivery channels in 110 colleges and runs 10 Robotics labs Over 4,000 students enrolled Programs for Engineering and MBA in place Rolled out CCNA & Embedded Systems courses; plans to roll out Telecom course

Network of 55 centers signed up with over 11,000 enrollments Sales program launched in 5 centers; Retail program to be launched in December
2010 Launched Media course with NDTV Launched Oracle and Accounting courses Various government projects worth Rs20 crores in hand
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Educomp Supplemental - A unique Supplemental Education platform

Supplemental

Assessments & Counseling

Tutoring Services

Test Preparation

E-learning Platforms

Admissions Advisory Services

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Content Leadership in North America & South East Asia

Premier provider of Webdelivered K12 curriculum and assessments

Leading K12 education

company in Singapore

Digital Learning
Environment products

Catering to over 230

Reach across 7,700

schools, 1550 school districts and 3.2 :

educational institutions across

Singapore, China, Thailand, Philippines, Vietnam, Japan and Brunei

million students
and 125,000 teachers across the US

Started groundwork to
launch SmartClass in China through CDEL (China Distance Education Holdings)

Unparalleled distribution
access and strong footprint in the US

US is the largest education

market in the world

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Financials Snapshot (Consolidated basis)

Revenue Growth
Rs.Cr

EBITDA Growth
Rs.Cr
1,041 480

1,200 1,000 800 600 400 200 0 FY06 FY07 FY08 FY09 56 286 110

500 400

CAGR 108%
634

CAGR 108%

290

300 200 100 0 FY10 FY06 FY07 FY08 FY09 FY10 26 50 125

PAT Growth
Rs.Cr
272

EBITDA & PAT Margins

300 250 200 133 150 100 50 0 FY06 FY07 FY08 FY09 14 71 29

50% 40% 30% 20% 10% 0%

46%

45%

44%

46%

46%

CAGR 110%

25%

26%

25%

21%

26%

FY10

50% 40% 30% 20% 10% 0%

FY06
FY06

46% 25%

FY07

45% 26%

44%

FY08
25% FY08

FY09
21% FY09

46%

FY10
26%

46%

Rs 1 Cr = Rs 10 Million

FY07 EBITDA Margin

FY10 PAT Margin

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FY10 Financial Statements (Consolidated basis)

Income Statement
Particulars Net Income from Operations Total Expenditure Cost of Goods Sold Staff Cost Selling, Distribution & Administration expenses Prior Period Items & Miscellaneous Items EBIDTA (before minority interest and share of profits of associates) Share of profit in associates Minority interest / Pre-acquisition profit EBIDTA (after minority interest and share of profits of associates) Depreciation & Amortization Finance Charges OPBT Other Income PBT Tax (including deferred) PAT before minority interest & pre-acquisition profits PAT after minority interest & pre-acquisition profits Basic EPS (Rs.) Diluted EPS (Rs.) Q4 FY'09 226.5 134.7 58.6 37.3 38.8 0.0 91.7 1.2 90.5 28.4 8.0 55.3 38.7 94.0 37.3 56.8 55.6 6.4 6.3 Q4 FY'10 333.1 174.178 46.6 53.2 73.9 0.5 158.9 0.01 0.4 158.4 20.1 12.8 125.9 10.4 136.4 75.5 60.8 60.4 6.4 5.8 % Chg YoY 47.1% 29.3% -20.6% 42.4% 90.7% NA 73.2% NA -63.3% 75.0% -29.3% 60.3% 127.7% -73.1% 45.1% 102.8% 7.2% 8.7% -0.6% -6.7%

Amount in Rs cr
FY'09 634.2 336.4 113.2 118.8 104.2 0.2 297.8 0.8 6.7 290.4 80.4 18.4 199.0 21.9 220.9 80.7 140.2 132.7 15.4 15.0 FY'10 % Chg YoY 64.1% 1,040.5 554.7 64.9% 43.2% 162.1 50.9% 179.3 103.1% 211.6 702.9% 1.8 63.1% 485.8 NA 0.0 -9.8% 6.0 479.8 65.2% 41.6% 113.8 166.1% 48.9 323.1 62.3% 433.9% 116.7 439.9 99.1% 101.3% 162.5 97.8% 277.3 104.4% 271.3 90.7% 29.3 82.0% 27.3

Key Ratios
Key Ratios (as a % of Net Income from Operations) EBIDTA Margin after minority interest & pre-acquisition profits PAT Margin after minority interest & pre-acquisition profits Total Expenditure Consumption of Raw material Staff Cost Selling, Distribution & Administration expenses
* Other income includes foreign exchange gain/ loss Note: FY09 figures are un-audited as disclosed to Stock Exchange in Q4 FY09

Q4 FY'09 40.0% 24.5% 59.5% 25.9% 16.5% 17.1%

Q4 FY'10 47.6% 18.1% 52.3% 14.0% 16.0% 22.2%

FY'09 45.8% 20.9% 53.0% 17.8% 18.7% 16.4%

FY'10 46.7% 26.1% 53.3% 15.6% 17.2% 20.3%

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FY10 Financial Statements Segmental Analysis (Consolidated)

Amount in Rs cr
Revenues School Learning Solutions Higher Learning Solutions K-12 Schools Online, Supplementary & Global Total Net Sales/ Income from Operations PBIT School Learning Solutions Higher Learning Solutions K-12 Schools Online, Supplementary & Global Less: Interest (Net) Other un-allocable expenses (net of un- allocable income and prior period items) Total Profit before Tax
PBIT Margins School Learning Solutions Higher Learning Solutions K-12 Schools Online, Supplementary & Global Revenue Break up School Learning Solutions Higher Learning Solutions K-12 Schools Online, Supplementary & Global

Q4 FY'09 166.5 8.7 23.7 27.5 226.5 Q4 FY'09 72.3 1.3 9.8 0.7 84.0 8.0 (17.8) 93.8

Q4 FY'10 % Chg YoY 269.0 61.5% 7.8 -10.9% 30.2 27.1% 26.2 -4.7% 333.1 47.1% Q4 FY'10 % Chg YoY 162.6 124.8% (3.9) NA 8.8 -9.5% (4.0) NA 163.6 94.6% 12.8 60.3% 14.3 NA 136.4
Q4 FY'10 60.5% NA 29.3% NA Q4 FY'10 80.8% 2.3% 9.1% 7.9%

FY'09 430.3 30.6 62.3 110.9 634.2 FY'09 210.1 9.5 30.6 17.9 268.1 18.4 28.8 220.9

FY'10 % Chg YoY 806.5 87.4% 28.5 -6.9% 98.3 57.8% 107.2 -3.4% 1,040.5 64.1% FY'10 % Chg YoY 448.3 113.4% (10.7) NA 33.1 8.1% (16.7) NA 69.4% 454.0 48.9 166.1% (34.7) NA 439.9 99.1%

45.4%
FY'09 48.8% 30.9% 49.1% 16.2% FY'09 67.9% 4.8% 9.8% 17.5%

Q4 FY'09 43.4% 14.6% 41.2% 2.4% Q4 FY'09 73.5% 3.9% 10.5% 12.1%

FY'10 55.6% NA 33.6% NA FY'10 77.5% 2.7% 9.4% 10.3%

Note: FY09 figures are un-audited as disclosed to Stock Exchange in Q4 FY09

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Q3FY11 Consolidated Income Statement

Income Sales & Service income Other income Total Income Expenditure Cost of goods sold Personnel expenses Administration and other expenses Finance charges Depreciation Total Expenditure Profit before tax PBT Margin Provision for tax Pre-acquisition profits Share of profit in associates Minority interest Profit after tax,minority interest & pre-acquisition profits PAT Margin EBITDA EBITDA Margin EBIT EBIT Margin EPS (Rs) Basic Diluted Consolidated Financials Q3 FY11 Q3 FY10 Rs Cr Rs Cr 357.5 8.7 366.2 260.1 15.8 275.9 YoY % Q2 FY11 Rs Cr 276.8 8.4 285.2 QoQ %

33%

28%

69.8 65.1 57.6 27.9 20.1 240.5 125.7 34% 25.3 0.2 0.5 3.0 96.7 26% 162.4 44% 142.3 39%

24.8 46.8 55.0 13.9 33.8 174.1 101.6 37% 37.5 -0.1 0.0 3.0 61.2 22% 136.6 49% 102.8 37%

38% 24%

59.5 63.2 48.2 21.2 20.8 212.9 72.3 25% 14.1 -1.6 0.6 1.4

13% 74%

58%

57.8 20% 103.4 36% 82.6 29%

67%

19%

57%

38%

72%

10.13 9.23

6.48 6.08

56% 52%

6.06 5.47

67% 69%

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Q3FY11 Segmental Analysis (Consolidated)

Revenue by Segments Q3 FY11 Q3 FY10 Rs Cr Rs Cr 198.7 279.4 25.1 30.4 7.8 14.6 28.5 33.1 357.5 260.1 EBIT by Segments Q3 FY11 Q3 FY10 Rs Cr Rs Cr 121.6 170.9 10.3 10.7 -4.1 -6.0 -4.7 -4.4 171.1 123.1 YoY Q2 FY11 % Rs Cr 41% 192.3 21% 32.1 87% 13.7 16% 38.7 37% 276.8 QoQ % 45% -5% 7% -14% 29%

School Learning Solutions K12 Schools Higher Learning Solutions Online, Supplemental & Global Total

School Learning Solutions K12 Schools Higher Learning Solutions Online, Supplemental & Global Total Debtor Days* School Learning Solutions: Smart Class ICT K12 Schools Higher Learning Solutions Online, Supplemental & Global Total

YoY Q2 FY11 % Rs Cr 41% 88.8 3% 12.9 NM -6.5 NM 3.1 39% 98.3

QoQ % 92% -17% NM NM 74%

Q3 FY11 87 52 22 4 3 168

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Consolidated Balance Sheet

Sources of funds Shareholders' funds Share capital Reserves and surplus ESOP outstanding account Minority interest Loan funds Deferred tax liability (Net) Total Sources of Funds Consolidated Balance Sheet As at 31st Dec 2010 Rs Cr 19.1 1,974.2 14.7 235.7 1,461.3 9.7 3,714.7 As at 30th Sep 2010 Rs Cr 19.1 1,720.3 12.4 205.1 1,400.2 3.1 3,360.2

Application of funds Goodwill Total Fixed Assets Foreign currency monetary long term translation account Investments Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Loans and advances Other current assets Less : Current liabilities and provisions Liabilities Provisions Net current assets Miscellaneous Expenditure [to the extent not written off or adjusted] Total Application of Funds

819.8 1,589.1 -1.9 141.3

634.4 1,399.8 -3.0 78.2

35.3 551.2 504.5 440.5 17.3 343.7 38.6 1,166.4

23.8 748.2 472.9 327.6 21.0 323.6 19.0 1,250.8

0.0 3,714.7

0.0 3,360.2

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Shareholding Pattern As on Dec 31, 2010

Equity Shares Outstanding-95,539,396

Public, 6.7% Body Corporate, 3.3%

4.17%

Others, 1.4%

Foreign Institutional Investors/ Foreign Financial Institutions, 37.1%

Promoters, 49.8%

60.08%

FIs/ Banks/ MFs, 1.7%

Company has sub-divided each of the existing Equity Shares of the face value of Rs.10/- each fully paid-up into five Equity Shares of the face value of Rs.2/- each fully paid-up.

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Contact Us

For any Investor Relations queries please contact:

Ms. Sangeeta Gulati, CFO Educomp Solutions Limited Educomp Towers, 514, Udyog Vihar Phase III Gurgaon 122 001, Haryana Email: investor.relations@educomp.com Ph: 0124 - 4529000

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