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IEC Education Ltd.

BSE: 531840 Sector: Services
NSE: N.A. ISIN Code: INE172B01017
BSE LIVE 15:15 | 12 Dec 4.14 -0.10
(-2.36%)
OPEN

4.38

HIGH

4.40

LOW

4.06

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 4.38
PREVIOUS CLOSE 4.24
VOLUME 1790
52-Week high 5.00
52-Week low 3.02
P/E
Mkt Cap.(Rs cr) 6
Buy Price 4.14
Buy Qty 650.00
Sell Price 4.40
Sell Qty 112.00
OPEN 4.38
CLOSE 4.24
VOLUME 1790
52-Week high 5.00
52-Week low 3.02
P/E
Mkt Cap.(Rs cr) 6
Buy Price 4.14
Buy Qty 650.00
Sell Price 4.40
Sell Qty 112.00

IEC Education Ltd. (IECEDUCATION) - Chairman Speech

Company chairman speech

IEC EDUCATION LIMITED (FORMERLY KNOWN AS IEC SOFTWARES LIMITED) ANNUAL REPORT 2008-2009 CHAIRMAN'S REPORT Dear Shareholders I have great pleasure in welcoming you to the 15th Annual General Meeting of your Company. The entire world economy has gone through the most challenging period of its time during last year. The unprecedented financial crisis considered as worst since the Great Depression has brutally shaken the foundations of some of the strongest economies in the world. India has also not been untouched by this but at an cumulative level our country has displayed commendable resilience to it. Despite of pall of gloom on us, there are reasons to remain optimistic and confident. The more-than-a-billion population of India calls for a vast education system, which has observed a high growth rate. This growth rate has become more rapid recently with globalisation and entry of a number of global organisations in corporate and education sector in particular. India currently has over 400 universities and more than 20,000 colleges with an enrolment of around 14 million students. In spite of these numbers, India still faces a lack of adequate infrastructure in higher education. This is in light of the fact that institutions in India can accommodate only 7-8% of the country's college-age students. The recent initiatives and high-level discussion among the bureaucratic circles and industry chambers to bring changes in the education sector have brought hopes of a new thrust in strengthening India's position as a global knowledge hub. However, the Government's expenditure pattern indicates that a rapid scaling-up of infrastructure for higher education will not be within reach in the near future. Considering that the Planning Commission has identified a resource gap of INR 2.2 trillion, it seems unlikely that the Government alone will be able to meet optimum infrastructure requirements. Owing to constrained investment, the sector is unable to cope with growing market demand and global competition. Increased private investment is thus imperative to expand infrastructure and provide greater access to quality higher education in India. Gone are the days when educational institutes were started with the sole aim of knowledge dissemination. The future belongs to educationists who believe in knowledge creation through high quality research and development. For this the institutes will have a strong focus on providing world-class ambience and infrastructure in which intellectual capital will thrive and bloom. India will thus be a knowledge hub where the public funds will be used for teaching, coaching and learning. In this way the educational institution will indulge in infinite value creation for the society. K12 Education: India has the largest population globally in the K12 age group. Despite a mere 37% of the K12 age group net enrolled on school rosters, private spends on K12 schools stand at an astounding $20bn - which makes the segment the largest within IES. The large market can be explained by a consistent shift towards private schools - catalyzed by the absence of quality public schools and growing awareness about importance of quality education as also increasing ability and willingness of Indians to pay. Within the private K12 space, the last decade has seen a gradual shift from private aided to private unaided (i.e. costlier) schools. This clearly indicates that more and more parents now prefer to spend substantially higher amounts in their quest for better quality of education for their children. Driven by such price discovery and growing acceptance of private schools as the medium for quality education, the market for K12 is expected to reach $30bn by 2012. Your Company is in process of entering agreements with trusts possessing land for the joint development of schools. The Company has already identified Two Sites (Alwar and Solan) for the school and is waiting for the concerned trust to get possession of lands from relevant authorities. The Company has entered into agreement with VET for the joint development of Senior Secondary School along with Women's Engineering College at Alwar. VET as part of its obligation has already made 50% of payment towards land cost and rest 50% will be made by August 2009. Once VET gets the possession of land it will apply to statutory bodies for necessary approval. During the year under review, your company has also done work on the finishing schools and in the line of the same, amalgamation of erstwhile VEF Information Systems Pvt ltd with IEC EDUCATION LIMITED has approved by the Hon'ble High Court of Delhi, which was involved in providing the technical and other support services to the vocational institution in North India. Due to the amalgamation with a profit making concern having a good brand value in the market, management has opinion that abovesaid amalgamation will be beneficial for the company in the terms of increasing quality of the services as well as increasing the profitability of the Company. The imperative for students to draw on skill sets to effectively compete in a dynamic business environment has given birth to vocational training-a parallel $1.5bn education system. Also, the increasing relevance of services sector in the Indian economy calls for enhanced technical and soft skill sets. Corporate across industries too are gleaning from their global counterparts the culture of continuous upgradation in skill sets of employees at all levels. While the factors suggest rapid growth as new training areas emerge, the space remains highly fragmented. Nearly 95% of the youth in the 15-25 years age group formally learn a trade or acquire a skill/ competency in most of the developed world. In contrast, only 5% of India's young labour force (19-24 years) is estimated to have acquired formal training. The Vocational education space encompasses training services at all levels, be it for students passing out from schools and colleges or re-training needs of the employed set. The Indian IT Training market has been estimated at $525 million. The number of non-IT graduates employed in IT sector is growing faster than the number of IT graduates, fuelling demand for private institutions offering IT education. Another opportunity, which has come in wake of liberalisation efforts, is the approval of Public Private Partnership (PPP) by Government of India for upgradation of Industrial Training Institutes (ITIs) and transforming them into Centres of Excellence. IEC Education Limited (IEC) and Vocational Educational Foundation(VEF) as consortium, have been awarded a project under a concession agreement signed by VEF with Department of Technical Education, Punjab for the establishment of Polytechnic and Integrated Campus at Nanowal Vaid, Hoshiarpur. The said agreement was signed on 30th January 2009 and the concession period is for 60 years. Your company shall fulfill its obligations as per the terms laid down in Consortium Agreement. ICT in Education: With government's increased focus on computer literacy in public schools, private companies are lining up to service the demand. For awarding the contracts, tenders are floated by state governments for a number of schools in a district. The contracts are awarded to 2-3 private players based on LI and Tl bidding. While some state governments follow the 'outright buy' model, wherein the government pays upfront (at the beginning of the contract) for the hardware, the contracts are commonly structured as BOOT contracts for a period of 3-6 years. ICT is being implemented in schools through the PPP route. To date, various states have auctioned ICT contracts to private suppliers for ~100,000 schools (indicating a market size of $90m). With the government increasing spend for ICT (29,000 schools expected to be up for bidding in FY09) and low market penetration (currently 11% of total public schools), we expect this market to exhibit 70% CAGR in the years to come. What the Future holds: The demands of a clear structure in the Indian Education sector and the skills requirement are so compelling that evolution of a new era in the sector is imminent. The experience of our Company in the education sector and the expertise of the promoters in higher education is being leveraged to create a consolidated education business, taking one step at a time. Brig. A.V.S. Chowdhry Chairman