IEC Education Ltd.
|BSE: 531840||Sector: Services|
|NSE: N.A.||ISIN Code: INE172B01017|
|BSE 00:00 | 15 Apr||IEC Education Ltd|
|NSE 05:30 | 01 Jan||IEC Education Ltd|
|BSE: 531840||Sector: Services|
|NSE: N.A.||ISIN Code: INE172B01017|
|BSE 00:00 | 15 Apr||IEC Education Ltd|
|NSE 05:30 | 01 Jan||IEC Education Ltd|
Your Directors take pleasure in presenting to you the 23rd Annual Report together withthe Audited Accounts of the Company covering the Financial Year ended March 31 2017.
The Financial highlights of the Company for the Financial Year ended March 31 2017 areas follows:
Operational Review / State of Companies Affairs
Income from operations of the Company increased to Rs. 2.43 Lakhs. Profit beforetaxation was Loss of Rs. 56.83 Lakhs as against Income of Rs. 12.12 Lakhs in the previousyear. The net Loss of the Company is Rs. 48.99 Lakhs as against Loss of Rs. 8.36 Lakhs inthe Previous Year. The Company has closed all of the Franchise centers imparting computereducation w.e.f. March 31 2017 and is in the process of identifying new opportunitiesavailable in Professional and Technical Education.
Consolidated Financial Results
In compliance with Regulation 33 and Regulation 34 of SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 Financial Statements are prepared inaccordance with the Accounting Standards notified under section 133 of the Companies Act2013 read with rule 7 of Companies (Accounts) Rules 2014. The Consolidated FinancialStatements have been prepared in accordance with Accounting Standard 21 AccountingStandard 23 and Accounting Standard 27 as issued by The Institute of Chartered Accounts ofIndia and illustrate the financial resources assets liabilities income profit andother details of the company and its subsidiaries as a single entity after elimination ofminority interest. The Consolidated Financial Statements together with Auditor's reportthere on from part of the annual report.
The paid up equity capital of the Company as on March 31 2017 was Rs. 1526. Lakhs.During the year under review the Company has not issued any equity share preferenceshare or any other security.
The reserves of the Company stood at Rs. 1893.79 Lakhs as against Rs. 1942.78 Lakhs inthe last Financial Year.
Your directors had not recommended any dividend for the financial year ended March 312017.
Your Company has not accepted any deposit withing the meaning of section 73 of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014. During theyear under review there were no outstanding deposits.
During the year under consideration no Director was appointed during Financial Year2016-17. Mr. Girish Narang Non Executive Director of the Company resigned on July 132016 due to other pre occupations. Mr. Dheeraj Mangal one of the Directors of the Companyresigned on May 30 2017. Mr. Ajay Kumar Jain was appointed as Additional Director by theBoard of Directors at their meeting held on May 30 2017.
Meeting of the Board of Directors
During the Financial year ended March 31 2017 the meeting of Directors of yourCompany held 5 times on 30.05.2016 13.08.2016 29.08.2016 12.11.2016 and 11.02.2017
Key Managerial Personnel
The Key Managerial Personnel of IEC Education Limited are:
1. Dr. Naveen Gupta - Managing Director
2. Mr. Ashutosh Kumar Jha - Chief Financial Officer
3. Mr. Mohnish Dutta - Company Secretary
M/s Nath & Hari Chartered Accountants continued as statutory auditors of thecompany for financial year ended March 31 2017. Pursuant to Section 139 of the CompaniesAct 2013 read with Companies Removal of Difficulties Third Order 2016 the term ofoffice of Statutory Auditors is expiring on ensuing AGM of the Company i.e. till September02 2017. Board of Directors of the Company at their Meeting held on July 17 2017 hasrecommended the appointment of M/s Rakesh Varshney & Co. Chartered Accountants (FRN:019108N) for a period of 1 year until the conclusion of next Annual General Meeting of theCompany. The Company has received necessary certificate from them under section 139 and141 of the Companies Act 2013 to the effect that they satisfy the conditions under thesaid Act and the rules made thereunder for their appointment. As required under the SEBI(LODR) Regulations 2015 the Statutory Auditors have also confirmed that they hold avalid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.
Auditors submitted their report on the financials of the Company for the year endedMarch 31 2016. The report was subjected to the
following observations by the Auditor:
(i) Note No: 2.8 of financial statements relating to non registration of title deeds inrespect of one building premises (Net book value as at year end Rs. 48.38 Lakhs Previous year Rs. 49.56 Lakhs)
Management's Response: The property originally belongs to two of the promotersjointly one of the promoters passed away and legal heirs were not available to completethe registration process. The property is in possession of the company since two decadesand company runs their Corporate Office on the same. The company is still putting itsefforts to get this done. All legal documents have been signed by Transferor in favor ofthe Company by means of Will Affidavit Surrender deed etc.
(ii) Note No.: 2.21 at serial no.2 of financial statements relating to adjustments ofentries arising out of confirmation/reconciliation of the accounts of parties;
(i) The amount includes an investment of Rs. 8.56 Lakhs in one of the erstwhilesubsidiary IEC Infotech Sdn. Bhd. Against which shares were not issued the matter isdisputed.
(ii) An amount advanced to one party during company's project of "School of Artsand Fashion" which shall be recoverable.
(iii) Note No.2.21 at serial no.5 of financial statements relating to non provision oftrade receivables and long term loans and advances considered doubtful amounting to Rs.427.50 Lakhs and Rs. 15.57 Lakhs respectively (Previous Year 427.50 Lakhs and Rs. 15.57Lakhs respectively)
Management's Response: Company was awarded "Computer Education Project"by Delhi Government and "Rajasthan School and College Project" by RajasthanGovernment during year 2000 and year 2003 respectively. Company successfully completedboth the projects however the payment was disputed by then Delhi Government and RajasthanGovernment. The matter is subject to Arbitration between Delhi Government and the Company.Regular correspondences are made with Rajasthan Government for recovery of the amount due.The management is confident that the money will be received from both the Governments.
iv. Note No.2.21 at serial no.6 of Financial Statement relating to not booking theincome of Rs. 154.80 Lakhs (Previous Year 6.14 Lakhs) as per Agreement with two Trusts inwhich a Director of the Company is interested. Accordingly revenue from operation wouldhave been increased by Rs. 154.80 Lakhs (Previous Year 6.14 Lakhs) and profit before taxand Shareholders' fund would have been increased accordingly (previous Year 6.14 Lakhs)
Management's Response: The Company has cancelled the agreement with VocationalEducation Trust (The Trust) owing to delay in completion of Educational Project. Due todelays in receiving the regulatory approvals by the Trust and henceforth start of revenuesharing the Company has decided to annul the Agreement and recover the amount invested.The Company is in process of recovering the balanced amount invested in the project.
Extract of Annual Return
The details forming part of Annual Return in form MGT-9 is annexed herewith as AnnexureA.
Directors Responsibility Statement
In terms of section 134(5) of the Companies Act 2013 the directors would like tostate that:
1. In the preparation of the Annual Accounts for the period ended as on 31st March2017 the applicable Accounting Standards have been followed and no material departure hasbeen identified.
2. Accounting Policies have been consistently applied in a reasonable and prudentmanner so as to give true and fair view of the state of affairs of the Company for thefinancial year ended 31st March 2017 and of the Statement of Profit And Loss ended thatdate for the financial year ended 31st March 2017.
3. Proper and sufficient care has been taken for the maintenance of adequate records inaccordance with the applicable provisions of the Companies Act 2013 for safeguarding theAssets of the Company and for preventing and detecting fraud and other irregularities.
4. The Annual Accounts for the Financial Year ended 31st March 2017 have been preparedon going concern basis.
5. The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
Details of Fraud reported by Auditors
No fraud as required under section 143 of the Companies Act 2013 has been reported bythe Auditors for the Financial Year ended March 31 2017.
Details of Material Orders Passed by Regulators
a. Arbitration with Delhi Government
Company was awarded "Computer Education Project" by Delhi Government duringyear 2000. Company successfully completed both the projects however the payment wasdisputed by then Delhi Government. The matter is subjudice in Arbitration before theHon'ble Arbitrator Ms. Janak Juneja and Ms. Shampa Chakraverty.
b. Service Tax
The Company has received ex-parte Service Tax order dated January 20 2017 on April 282017. As the order was received after the expiry of the time required to file an appealbefore the Service Tax Department. The Company filed writ in the form of Certiorari underarticle of the Constitution of India wherein Hon'ble High Court set aside the order ofService tax Commissionrate and allowed us an opportunity of being heard before passing theorder.
Declaration by Independent Directors
All independent Directors have given declaration that they meet the criteria of-independence as laid down under section 149(6) of the Companies Act 2013.
Independent Directors considered / evaluated the performance of the non - independentDirectors at a meeting without anyone from the non - independent Directors and Management.
The Board subsequently evaluated performance of the Board the Committees andIndependent Directors (without participation of the relevant director).
Nomination and Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee hasalready framed a policy for selection and appointment of Directors Senior Management andtheir remuneration. The Company's policy on appointment and remuneration includingcriterial for determining qualifications positive attributes and independence areprovided in the Corporate Governance Report forming Part of the Annual Report. Thedetailed policy is available on the website of the Company athttp://iecgroup.in/pdf/Nomination%20and%20Remuneration%20Policy.pdf
Pursuant to section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointedM/s Dharamveer Dabodia and Associates to undertake the Secretarial Audit of the Companyfor Financial Year 2016-17. The Secretarial Audit Report is annexed herewith as AnnexureB. Following are the observations made by the Secretarial Auditor in his report:
The Company's financial assets constitute more than 50% of the total assets andincome from financial assets constitute more than 50% of the gross income thus thecompany is carrying out NBFI Activity without having registration certificate as requiredunder section 45(ia) of RBI Act.
Management's Response: The Company was carrying Educational Business Activity frompast so many years and the fact is also evident from the previous year financials andincome from main business was much higher than financial income. However as of now thereis no business in the company and company is the process of restructuring it businessmodel.
The Company has granted the loans in non-compliance of the Section 185 &186 of the Companies Act. 2013.
Management's Response: the Company has taken a property on rent from one of thethen directors of the Company Mr. R.L. Gupta and had advanced the money as securitydeposit. However Mr. Gupta had suffered with Brain Hemorrhage and had consequentlyresigned from Directorship on 30.05.2015. The amount shall be recoverable from Mr. Guptain current Financial Year.
The Company has not created and registered charge on vehicle loans requiredunder section 77 of the Companies Act 2013
Management Response: The loan was taken by the company on vehicle purchased on16.01.2015 (during financial year 2014-15). However the lender has not insisted oncreating a charge on short term vehicle loan. Moreover the term of loan is also expiringon 16.12.2017.
Auditor's report and annual report pertaining to Fy 2015-16 can not be located /seen on bseindia portal.
Management Response: though the company has filed the requisite documents we willagain intimate bse of the same and get the file uploaded.
Delayed filing of shareholding pattern for the 1st quarter
Management Response: the company is a law abiding company and has always endeavoredto file the requisite filings with the authorities however the shareholding pattern waslately filed as the data was not provided to the RTA by the Depository. Moreover therewere no change in the shareholding of promoter or any other major shareholder of theCompany during the period under default.
Particulars of Loans Guarantees or Investments
The company has not given any loans or guarantees of investments covered under theprovisions of section 186 of the Companies Act 2013.
Related Party Transaction
No new related party transaction was entered into during the current financial year.There are no materially significant related party transactions made by the company withPromoters Key Managerial Personnel or other designated persons which may have potentialconflict with interest of the company at large. The related party transaction policy isavailable on the Company's website athttp://iecgroup.in/pdf/Related%20Party%20Transaction%20Policy.pdf Form AOC-2 has beenattached as Annexure C to Directors Report.
Material Changes occurred between the end of financial year and date of report.
Management of Vocational Education Foundation and IEC Education Limited met on15.04.2017 to discuss future course of action for recovery of security deposit advanced bythe Company. Although VEF have shown their inability to return the security deposit before30.09.2017. moreover they have also shown their interest in leasing out the management ofthe college or part thereof run and managed by VEF as may be mutually decided. It wasagreed to conduct internal due diligence to find out the scope of becoming ManagementCompany of the college run by VEF. The matter will again taken up with VEF aftercompletion of internal due diligence.
The management of Vocational Education Trust have shown their inability torefund the security deposit advanced by the Company as VET have not realized sale proceedsof its property due to pending approvals. Moreover Governing Body members of VET have alsoshown their interest to resign from the Trust due to their pre-occupations and have askedIEC Education Limited to recommend the appointment of new Governing Body members of theirchoice. The Board of Directors have discussed the matter in the light of the above andhave constituted a committee comprising of three persons from the Company to report thepossibilities in next Board Meeting that may arise in acquiring the management ofGoverning Body of VET.
Conservation of Energy a) Company ensures that its operations are conducted in themanner whereby optimum utilization and maximum possible saving s of energy is achieved. b)No specific investment has been made in reduction in energy consumption. c) As the impactof measures taken for conservation and optimum utilization of energy are not quantitativeits impact on cost cannot be stated accurately.
The present global scenario your Company strives to maintain and improve quality of itsservices and takes appropriate measures to keep pace with fast changing technologicalinnovation.
Foreign Exchange Earnings and Out-Go
During the period under review there was no foreign exchange earnings or out flow.
Internal Control Systems and Their Adequacy / Risk Management
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board and to theChairman & Managing Director.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board.
Corporate Social Responsibility
Company do not fall under the mandatory limits set for mandatory corporate socialresponsibility committee formation and contribution but company ensures that being partof the society it is duty to give back to the society and take efforts to do it.
Performance of Subsidiaries / Joint Ventures and Associates
As per the provisions of first proviso of sub section (3) of section 129 of theCompanies Act 2013 read with rule 5 of Companies (Accounts) Rules 2014 statementcontaining salient features of the financial Statement of Subsidiary Companies are givenalong with Consolidated Accounts in Form AOC - I. The Annual Accounts of Subsidiaries areprepared in accordance with AS-21 and forms part of this Annual Report and accounts. TheAnnual Accounts of the Subsidiaries along with related detailed information will be madeavailable to the Members of the Company / Subsidiary Company seeking such information atsuch point of time. The Annual Accounts of the Company are also available for inspectionfor any Member during the business hours at the Registered Office of the Company andSubsidiary Companies can the same can be accessed from the website of the Companyhttp://iecgroup.in/sfinancials.html.
In compliance with Regulation 24 of the SEBI (LODR) Regulations 2015 the company hasformulated Policy on Material Subsidiaries. The policy can be accessed athttp://iecgroup.in/pdf/Policy%20on%20Material%20Subsidiary.pdf At present the company hasthree subsidiaries:
1. IEC Learning and Management Limited
2. IEC Education and Infrastructure Limited
3. IEC Leasing and Capital Management Limited
The company does not have any material subsidiary as of now and none of the companyholds revenue of more than 10% of the revenue of their Holding Company. None of thesubsidiary companies holds any major loans or investment.
Pursuant to the provisions of proviso to sub-section 10 of section 177 of the CompaniesAct 2013 the Company has a vigil mechanism named Vigil Mechanism-Whistle Blower Policyto deal with instance of fraud and mismanagement if any. In staying true to our values ofStrength Performance and Passion and in line with our vision of being one of the mostrespected companies in India the Company is committed to the high standards of CorporateGovernance and stakeholder responsibility. The Policy can be accessed on the website ofthe company. http://iecgroup.in/pdf/Vigil%20Mechanism.pdf
Particulars of Employees
As per the provisions of section 13 of the Companies Act 2013 the Report of Accountsare being sent to all members of the Company excluding the information relating toEmployees to be given under section 197(12) of the Companies Act 2013 read with rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Thesaid information would be available for inspection by the members at the Corporate Officeof the Company i.e. 19 4th Floor Community Center East of Kailash New Delhi - 110065during business hours on working upto the date of ensuing Annual General Meeting. If anymember is interested in inspecting the same such members may write to the CompanySecretary in advance.
Code of conduct
As per regulation 17(5) of SEBI (LODR) Regulations 2015 the Company has laid downCode of Conduct for all Board Members of the Company as well as Senior Management and samehas been posted on website of the Company. Annual Compliance Report for the Year ended31st March 2017 has been received from all the Board Members and Senior Management of theCompany regarding compliance of all the Provisions of Code of Conduct. Further pursuant toschedule V of SEBI (LODR) Regulations 2015 declaration regarding compliance by Boardmembers and senior management personnel with the Companies Code of Conduct is herebyattached as Annexure D to this report.
Additionally company has also adopted code of conduct for Independent Directors of theCompany in accordance with Companies Act 2013 and SEBI (LODR) Regulations 2015.
Report on Corporate Governance and Management Discussion and Analysis
The essence of existence of Corporate lies in good Corporate Governance Practice. YourCompany has always adhered itself towards best governance practice. Your Company hasmaintained high level of integrity and transparency towards compliance of all lawsregulations rules guidelines whether provided by any enactment or issued by SEBI. Asrequired under Regulation 34 of SEBI (LODR) Regulations 2015 read with Schedule V to thesaid regulations a report on Corporate Governance and Management Discussion and AnalysisReport are annexed to this Annual Report and forms part of it. Further pursuant toSchedule V of SEBI (LODR) Regulations 2015 a certificate from M/s Nath and HariChartered Accountants Delhi the Statutory Auditors of the Compnay confirming complianceof conditions of Corporate Governance is annexed as Annexure E to this report.
Registrar and Share Transfer Agents
M/s Alankit Assignments Ltd. in the capacity of Registrar and Share Transfer Agents ofyour Company is looking after all the matters relating to shares in transfer anddematerialisation. Members are hereby requested to send their correspondence regardingtransfer of shares Demat of shares and other queries to Registrar and Share TransferAgents Alankit Assignments Ltd. 2E/21 Alankit House Jhandewalan Ext. New Delhi - 110055
None of the Directors of your Company is disqualified as per the provisions of section164 of the Companies Act 2013. The Directors of your Company has made necessarydisclosure as required under various provisions of Companies Act 2013 and ListingAgreement.
Listing of Shares
The shares of your Company are listed at
1. Bombay Stock Exchange Phirozee Jeejeebhoy Tower 25th floor Dalal StreetMumbai-400001
Disclosures of Shares lying in Suspence Account
Pursuant to Schedule V of SEBI (LODR) Regulations 2015 the details in respect of theshares lying in the suspense account till March 31 2017 is as under:
Description / No. of Cases / No. of Shares
Your Directors wish to place on record their gratitude in receipt of continued supportand co-operation from various stakeholders including and not limiting to ShareholdersCustomers institutions Governmental and Semi Governmental Agencies Consultants otherbusiness Associates and Employees of the Company.
Form No. AOC - 2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and
Rule 8(2) of the Companies (Accounts) Rules 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section
(1) of section 188 of the Companies Act 2013 including certain arms length transactionunder third proviso thereto.
1. Details of contracts or arrangements or transactions not at Arm's lengthbasis.
2. Details of contracts or arrangements or transactions at Arm's length basis.
Declaration Regarding Compliance by Board Members and Senior Management Personnel withthe Company's Code of Conduct
This is to confirm that Company has adopted a Code of Conduct for its employeesincluding managing director. The Code of Conduct as adopted is available on the Companies'website. I confirm that the Company has in respect of the financial year ended March 31st2017 received from the Senior Management team of the Company and the members of the Boarda declaration on Compliance with the Code of Conduct as applicable to them. For thePurpose of this declaration Senior Management Team means the Company Secretary BoardMembers including Chairman and Managing Director.
Auditor's Certificate On Corporate Governance
The Member of IEC Education Ltd
We have examined the compliance of conditions of Corporate Governance by IEC EducationLtd.("the Company") for the year ended on 31st March 2017 as stipulatedRegulation 34 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015read with Schedule V to the said regulations.
The compliance of conditions of Corporate Governance is the responsibility of themanagement. Our examination was limited to review of procedures and implementationthereof adopted by the Company for ensuring the compliance of conditions of CorporateGovernance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.
In our opinion and to the best of our information and according to the explanationgiven to us and the representations made by the management we certify that the Companyhas complied with the conditions of Corporate Governance as stipulated in theabove-mentioned Listing Agreements.
We state that such compliance is neither an assurance as to the future viability of theCompany nor the efficiency or effectiveness with which the management has conducted theaffairs of the Company.
For Nath & Hari
(Firm Registration No.007403N)