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CORE Education & Technologies Ltd.

BSE: 512199 Sector: Services
NSE: COREEDUTEC ISIN Code: INE247G01024
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OPEN 1.95
PREVIOUS CLOSE 1.86
VOLUME 5590
52-Week high 3.10
52-Week low 1.67
P/E
Mkt Cap.(Rs cr) 20.28
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.77
Sell Qty 12416.00
OPEN 1.95
CLOSE 1.86
VOLUME 5590
52-Week high 3.10
52-Week low 1.67
P/E
Mkt Cap.(Rs cr) 20.28
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.77
Sell Qty 12416.00

CORE Education & Technologies Ltd. (COREEDUTEC) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 30th Annual Report of your Company alongwith the audited financial statements for the year ended 31st March 2015.

RESULTS FROM OPERATIONS

Amt in Rs. (million)

Standalone

2014-15 2013-14
Income from Operations 3437.56 6275.32
Other Income 480.49 (33.40)
Variation in Inventory 287.43 530.03
Expenses 10324.35 10220.07
Exceptional Items 4052.95 745.97
Profit Before tax (10746.68) (5254.16)
Less: Provision for tax (current) - -
Excess/(Short) Provision for earlier years - -
Provision for tax (deferred) - (232.84)
Profit after Tax (10746.68) (5021.32)
Add: Balance B/F from Previous Year 1000.54 5942.03
Excess/(Short) Provision for Earlier years - -
Profit Available for appropriations (10746.68) (5021.32)
Debenture Redemption Reserve 30.79 -
Transfer to General Reserve - -
Proposed Dividend - (68.69)
Provision for Taxes on Dividends - (11.14)
Minority Interest - -
Balance C/F to Balance Sheet (9776.93) 1000.54

Overview

The Company continued to face strong headwinds during the year under review. Asreported last year the Company’s CDR proposal was approved by the CDR EG. Theapproved proposal envisaged an investment of Rs. 100 crores from a prospective jointventure partner. In spite of the Company’s best efforts such a joint venture did nothappen as a result of which it was decided to withdraw the CDR proposal. The withdrawalis at present under consideration with the CDR EG.

Consequent to the withdrawal your Company’s management continues its efforts torevive the operations by pursuing all alternatives available to it. Disposal of non-coreassets divestment of the company’s overseas subsidiaries and a continued sustainedsearch for an appropriate joint venture partner are part of these efforts. Recovery ofdues on various government and other projects is also under way both thru commercial andlegal means.

In view of these continued and sustained efforts your Directors have thought it fit todraw up the Company’s accounts on a "going concern" basis as observed bythe Statutory Auditors’ in their Audit Report.

Your Company achieved a total operating income of 3437.56 million as compared to Rs.6275.32 million during the previous financial year with a loss of 10746.68 million ascompared to a loss of 5254.16 million during the previous financial year. Loss after taxwas 10746.68 million as compared to Rs. 5021.32 million during the previous financialyear.

The losses are mainly attributed towards the writing off of Trade receivables andImpairment of IPRS and also for providing for impairment in the value of investments inthe subsidiary companies.

On the exports and overseas operations many customers had raised quality issuesrelating to assessment and intervention segment of the products. As reported last year amanagement committee was formed to analyse and suggest the future course of action. Basedon its findings the committee had decided to write off INRs 1769. 92 million last yearand make efforts to recover the rest. Based on the developments during the year underreport a further amount of INRs 1730.49 has been written off in the current year.

As part of its annual exercise the management also reviewed the carrying value of itsIPR. Technological changes adoption of new standards in the USA and fast changing studentbehavioural patterns have shortened the life of a lot of hitherto long term products.Based on an analysis of the current demand and relevance for our products the Company hasdecided to write down the value of its IPR.

Therefore management has made provisions for impairment of 3287.84 million ascompared to 1291.52 million in the previous year towards the carrying cost of such IPRsand treated an exceptional item.

The operations of the overseas subsidiaries have also suffered due to the abovereasons. The revenues in USA subsidiaries have reduced to INRs 2843.35 million from5459.59 million in FY 13. The carrying value of IPR in the subsidiaries has also reducedsubstantially due to reasons mentioned above. In view of this the value of investments inthe subsidiaries has eroded substantially. An amount of INRs 4052.99 million has beenprovisioned during the current year to provide for such erosion.

To mitigate the financial stress the Company has taken various steps including costcutting exercise and bidding for low capital intensive projects with high margin. Alsorationalization is done in terms of number of employees. The No. Of employees have reducedto 124 from 277.

A fire accident occurred on 18th July 2014 at the Corporate office of the Companysituated at 10th Floor Lotus Business Park Off Link Road Andheri (West) Mumbai - 400053. Because of this incident the Company has lost some important data both in thephysical & the digital form though there are no major financial losses other thandamage to property. The Company is in the process of assessing the extent of the damagecaused to the data and rebuilding/recoupment of such data.

Dividends and Appropriations

In view of the losses incurred your Directors do not recommend any dividend for thefinancial year 2014-15.

Transfer to reserves

There are no transfer of funds to General Reserves during the financial year 2014-15.

Changes in Capital Structure

There is no change in Capital Structure of the Company during the year under review.

Extract of the Annual Return

An extract of the Annual Return as provided under Section 92 (3) of the Companies Act2013 is annexed to this Report.

Number of meetings of the Board of Directors

5 (Five) Board Meetings were held during the period under review. The dates of theseBoard Meetings are 10th June 2014 14th August 2014 4th September 2014 14th November2014 and 14th February 2015.

During the year the Board of Directors of the Company comprised of Non-ExecutivePromoter Chairman Mr.Sanjeev Mansotra; two Executive Directors namely Mr. Naresh SharmaExecutive Director Mr. Nikhil Morsawala Director-Finance; and two Independent Directorsnamely Mr. Sunder Shyam Dua and Mr.Harihar Iyer. Mr Naresh Sharma resigned on 12thNovember 2014. The term of appointment of Mr. Nikhil Morsawala as Director - Financeended on 11th August 2015. He now continues to be on the Board as a Non-ExecutiveDirector.

In accordance with the provisions of the Companies Act 2013 Mr.Sanjeev MansotraNon-Executive Chairman of your Company is retiring by rotation at the ensuing AnnualGeneral Meeting and expressed his willingness to be reappointed as Director of the Companyfor a period of 5 years from the date of this Annual General Meeting. Brief resume of Mr.Sanjeev Mansotra proposed to be reappointed as Director nature of his expertise inspecific functional areas and names of companies in which he holds Directorships andMemberships of the Board Committees as stipulated in Clause 49 of the Listing Agreementwith the stock exchanges are provided in the Corporate Governance forming part of theAnnual Report.

Directors’ Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act 2013 for the year ended 31st March2015 the Directors confirm that: a) in the preparation of the annual accounts theapplicable accounting standards had been followed along with proper explanation relatingto material departures if any; b) the Directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit or loss of the Company for that period; c) theDirectors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; and d) theDirectors had prepared the annual accounts on a going concern basis; e) the Directors hadlaid down internal financial controls to be followed by the Company and that suchfinancial controls are adequate and were operating effectively. f) the Directors haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

Material developments in human resources and industrial relations

The past year has been a challenging year with the slowdown in economy coupled with theeducation sector also facing a slump. This required the company to manage its cost moreefficiently without compromising on its productivity. Core understands the business needsto adapt to the economic realities and had taken steps like cutting the strength of itsIndia team across functions to maintain the equilibrium in terms of right fit for rightskill.

Recognizing the necessity to maintain its core team of skilled and competent work forceevery effort would be made to ensure the perfect balance in terms of employees’skills and demand and nurture a core team of dedicated employees to face the economicturnaround in the future.

Best Practice

Your Company continues to be a CMMiLevel5 certification and an ISO 9001:2008organizations.

Directors and Key Managerial Personnel

Mr. Pundi L. Narasimham ceased to be a Director of the Company with effect from 18July 2014. Mr. Naresh Sharma ceased to be a Director of the Company with effect from 12thNovember 2014. The Board has placed on record its appreciation of the significant roleplayed by Mr. Narasimham and Mr. Sharma during their respective tenure as a Director ofthe Company.

As per the provisions of the Companies Act 2013 and the Articles of Association of theCompany Mr. Sanjeev Mansotra retires by rotation and being eligible offers himself forre-appointment.

During the year under review Mr. Ganesh Umashankar resigned as the Company Secretarywith effect from 31st December 2014. Mr. Ashutosh Ghare was appointed as the CEOeffective 14th November 2014. No other Key Managerial Personnel has been appointed or hastendered resignation during the Financial Year 2014-15.

Declaration given by Independent Directors

Pursuant to the approval of the Members at the 29th Annual General Meeting Mr. HariharIyer and Mr. Sunder Shyam Dua were appointed as the Independent Directors of the Companyfor a period of 5 (five) consecutive years for a term up to the conclusion of the 34thAnnual General Meeting.

As per the requirement of Section 149 (7) of the Companies Act 2013 Mr. Harihar Iyerand Mr. Sunder Shyam Dua the Independent Directors have given a declaration that theymeet the criteria of independence as specified under Section 149 (6) of the Act.

Explanations or Comments on qualifications reservations or adverse remarks

Consequent to the withdrawal your Company’s management continues its efforts torevive the operations by pursuing all alternatives available to it. Disposal of non-coreassets divestment of the Company’s overseas subsidiaries and a continued sustainedsearch for an appropriate joint venture partner are part of these efforts. Recovery ofdues on various government and other projects is also under way both thru commercial andlegal means.

In view of these continued and sustained efforts your Directors have thought it fit todraw up the Company’s accounts on a "going concern" basis as observed bythe Statutory Auditors’ in their Audit Report.

Reporting of Frauds

During the year under review there have been no frauds reported by the StatutoryAuditors of the Company.

Particulars of Loans guarantees or investments

During the year the Company has not made loan or given guarantees and investment.

Remuneration Policy

A Remuneration Policy for Directors Key Managerial Personnel and other employees ofthe Company as required under Section 178 (3) of the Companies Act 2013 is being adopted.

Particulars of contracts or arrangements with related parties

Particulars of contracts or arrangements with related parties in form No. AOC- 2 asrequired pursuant to the provisions of Section 134(3)(h) and Rule 8 of the Companies(Accounts) Rules 2014 is annexed to this Report [Annexure 2].

Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgoings

Particulars prescribed under Section 134(3)(m) of the Companies Act 2013 are given inan Annexure to this Report.

Risk Management Policy

The Company has adopted a Risk Management and Mitigations Policy. A formal Riskreporting system has been devised by the Company. Risk Management Committee has also beenconstituted comprising of Director and senior officials of the Company.

Annual Evaluation

The performance of Board of Directors and the committees constituted by the Board andthe individual directors has been evaluated during the Financial Year ended 31st March2015.

Particulars of Subsidiary companies or Joint ventures or associate company

The Company has 18 subsidiaries including step-down subsidiary companies as on 31stMarch 2015. During the year the Board of Directors (the Board) reviewed the affairs ofmaterial subsidiaries. The Company has in accordance with Section 129(3) of the CompaniesAct 2013 prepared consolidated financial statements of the Company and all itssubsidiaries which form part of the Annual Report. Further the report on the performanceand financial position of each of the subsidiary associate and joint venture and salientfeatures of the financial statements in the prescribed Form AOC-1 is annexed to thisreport [Annexure 1]. The Consolidated Financial Statement has been prepared in accordancewith applicable Accounting Standards issued by The Institute of Chartered Accountants ofIndia. Details of the subsidiary companies are discussed in the Management Discussion& Analysis forming part of this report.

In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited financial statements of each of the subsidiary will be available onour website www.core-edu-tech.com. These documents will also be available for inspectionduring business hours at the registered office of the Company.

Particulars of Deposits

During the year under review the Company has neither accepted any deposits coveredunder Chapter V of the Companies Act 2013 nor has it accepted deposits which are not incompliance with the requirements of Chapter V.

Particulars of Material Orders

During the year under review neither any Regulator nor any Court or Tribunals haspassed any significant and material Order impacting the going concern status and theCompany’s operations in future.

Audit Committee

The Audit Committee comprises of Mr. Sunder Shyam Dua Chairman Mr. Harihar IyerIndependent Director and Mr. Nikhil Morsawala Director. Mr. Pundi L. Narasimham resignedas a Director of the Company with effect from 18th July 2014 and consequently ceased tobe a Member of the Audit Committee. The Audit Committee continues to provide valuableadvice and guidance in the areas of costing finance and internal controls.

Auditors

M/s. Sushil Budhia Chartered Accountants the Statutory Auditors of the Companyresigned from the office of the Statutory Auditors effective 13th July 2015 owing to someother commitments. The Board has at its Meeting held on 17th August 2015 appointed M/s.Aniket Kulkarni & Associates Chartered Accountants (Registration No. 130521W) as theStatutory Auditors in the casual vacancy so caused due to resignation of the former AuditoRs.

M/s. Aniket Kulkarni & Associates Chartered Accountants (Registration No. 130521W)are due to retire at the ensuing Annual General Meeting. The Company has received awritten consent and a certificate from the Statutory Auditors under Section 139 of theCompanies Act 2013 stating that the appointment if made will be in accordance with Rule4 (1) of the Companies (Audit and Auditors) Rules 2014.

Particulars of Employees

Information as per Section 197(12) of the Companies Act 2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part ofthis Report.

Secretarial Audit Report

During the year under review the Company had appointed M/s. Jaiprakash. R. Singh &Associates Practicing Company Secretary (Membership No. 7391) (C.P. No. 4412) Mumbai asthe Secretarial

Auditor for the Financial Year 2014-15. The report in form MR- 3 on the Audit carriedout by the said Auditor is annexed to this Report.

Purchase of shares of the Company

The Company does not give any loan guarantee or security or any financial assistanceto the employees of the Company for the purpose of a purchase or subscription for anyshares of the Company pursuant to Section 67 (2) of the Companies Act 2013.

Corporate Social Responsibility Committee

The provisions of Section 135 of the Companies Act 2013 are not applicable to theCompany as none of the thresholds viz. Net Worth of Rs. 500 crore or more Turnover of Rs.1000 crore or more or Net Profit of Rs. 5 crore or more were satisfied. Consequently theCompany has not constituted the Corporate Social Responsibility Committee.

Vigil mechanism

The Company had adopted a Whistle Blower Policy to report to the Management instancesof unethical behaviour actual or suspected fraud or violation of the Company’s codeof conduct or ethics policy.

Issue of shares with differential voting rights

The Company has not issued any shares with differential voting rights pursuant to theprovisions of Rule 4 of the Companies (Share Capital and Debenture) Rules 2014.

Issue of sweat equity shares

During the year under review the Company has not issued any sweat equity shares to anyof its employees pursuant to the provisions of Rule 8 of the Companies (Share Capital andDebenture) Rules 2014.

Employee Stock Option

During the year under review the Company has not granted any stock options to any ofits Directors or employees pursuant to the provisions of Rule 12 of the Companies (ShareCapital and Debenture) Rules 2014. Disclosure pursuant to the provisions of Securitiesand Exchange Board of India (Employee Stock Option Scheme and Employee Stock PurchaseScheme) Guidelines 1999 as on 31st March 2015 are given in the Annexure and the saidAnnexure forms part of this Report.

Corporate Governance

The Company endeavourers to attain highest values of Corporate Standards. The Report onCorporate Governance as stipulated under Clause 49 of the Listing Agreement forms part ofthe Annual Report.

The Chairman’s declaration regarding compliance with CETL Code of Conduct forDirectors and Senior Management personnel forms part of report on Corporate Governance.

Management Discussion and Analysis

Management Discussion and Analysis for the year under review as stipulated underClause 49 of the Listing Agreement with the Stock Exchanges is presented as a separatesection forming part of this Annual Report.

Acknowledgements

We thank our customers investors bankers and other stakeholders for their continuedsupport during the year. We place on record our sincere appreciation of the contributionmade by employees at all levels. Our consistent growth was made possible by their hardwork solidarity cooperation and support and look forward to their continued support.

For and on behalf of the Board
Sanjeev Mansotra
Non-Executive Chairman
Date: 17th August 2015 DIN No.: 01030000

ANNEXURES TO THE DIRECTORS’ REPORT

Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgoings

Information as per Section 134(3)(m) read with Companies (Accounts) Rules 2014 andforming part of the Directors’ Report for the Financial Year ended 31st March 2015:

A) Details on Conservation of Energy

Though the operations of your Company are not energy-intensive significant measuresare taken to reduce energy consumption. We constantly evaluate new technologies and investto make our infrastructure more energy-efficient.

Some of the energy efficient practices adopted across the facilities of the Company toreduce consumption of power are:

• Installation of energy efficient lighting.

• Use of energy efficient computers and by purchasing energy- efficient equipment.

• Energy monitor and controlling system.

• Incorporating new technologies in the air-conditioning systems at all upcomingfacilities to optimize power conservation.

• Identification and replacement of outdated and low-efficient UPS systems in aphased manner.

• Installation of LCD monitors (Energy Efficient) in place of normal CRT monitorsthereby saving energy.

• Turning of lights in all floors when COREans are not working.

• Turning off the Air conditioners during non peak hours and on weekends.

• Toughened glass windows to reduce infrared radiation.

• Effective management of ventilation to ensure acceptable air quality.

Our strategy to adopt the best practices latest technologies and high levels ofefficiency in our operations will help us build an environment where energy is conserved.

B) Technology Absorption and Research & Developments

Research and Development for new solutions and services designs frameworksprocesses and methodologies continue to be of top priority for us. This allows us toenhance quality productivity and customer satisfaction through continuous innovation. TheCompany believes that technological obsolescence is a reality. Only progressive researchand development will help us to accomplish future challenges and opportunities. We investand encourage continuous innovation.

C) Foreign Exchange Earnings and outgo:

The Company continued to be net foreign earner during the year. Total foreign exchangeearned by the company during the year under the review was INRs 550.38 million as comparedto INRs 1261.94 million during previous year.

Total Foreign exchange outflow during the year under the review was NIL as againstINRs 287.63 million during the previous year.

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