To, The Members of
Core Education and Technologies Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Core Education and
Technologies Limited ("the Company"), which comprise the Balance Sheet as at
31/03/2015, the Statement of Profit and Loss, for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these financial statements that give a true and fair view of the financial position and
financial performance of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This
responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgements and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant to the
Company’s preparation of the financial statements that give a true and fair view in
order to design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company’s Directors, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India, of the state of affairs of the Company as at
31/03/2015, and its Loss for the year ended as on that date.
Emphasis of Matter
We invite attention to the following notes:
a) Note No. 37 (b) of the accompanying financial statement of the company in respect of
increase in its overdue trade receivable, default in repayment of its dues to lenders and
debenture holders, salary arrears and arrears of statutory dues, etc., which indicates the
existing of material uncertainty that may cast significant doubt about the Company’s
ability continue as going concern. As informed to us by management, the Empowered Group of
Corporate Debt Restructuring (CDR) Cell has admitted the Company’s application under
the CDR Scheme. The company’s ability to continue as a going concern is dependent,
interalia on the successful outcome of its application under CDR scheme and timely
recovery of the trade receivable. On the basis of its strong expectation of the successful
outcome of its CDR application, and other reason stated in the aforesaid Notes, the
company has prepared the accompanying financial the statements on going concern
assumption.
b) Note No. 37(c) of the accompanying financial statements of the Company relating to9
the termination order received from Haryana Government for the ICT Project and invocation
of bank guarantee of Rs. 295,000,000. The company has filed a special petition in the
honourable Supreme Court against termination order. The Company believes that it has a
strong case on merits. The matter, being sub-judice pending the outcome of the legal
proceedings, no adjustment has been made to the carrying value of receivables of Rs.
748,319,014/- and of the fixed assets of Rs. 1,002,144,968/- at this stage, for
this project.
c) Note No 37(d) of the accompanying financial statements of the Company relating to
trade receivables which have remained overdue for extended period of time. In the opinion
of the management, these are fully recoverable. The Company has received year-end balance
confirmations from these trade receivables and accordingly no provision is deemed
necessary by the Company.
Our opinion is not qualified in respect of these matters
d) Debtors of Rs. 2,406,489,894 from subsidiaries are outstanding for more than 2
years. These debtors are 50.12% of the total debtors and there is an uncertainty regarding
their recovery.
e) Since the external liability of the Company are very high and due to increase in its
overdue trade receivables, default in repayment of its dues to lenders and debenture
holders and arrears of statutory dues., etc.,. The current liabilities of the Company are
far exceeding the current assets of the Company which clearly indicates the existence of
material uncertainty that may cast doubt about the Company’s ability to continue as a
going concern. As informed to us by the management the Corporate Debt Restructuring (CDR)
application has also been rejected under the CDR scheme. In view of the exit from CDR
there is an intrinsic risk to the continuing of operation on a going concern basis.
Our opinion is qualified in respect of points d and e above. Report on Other Legal and
Regulatory Requirements
This report doesn’t include a statement on the matters specified in paragraph 3
and 4 of the Companies (Auditor’s Report) Order, 2015, issued by the department of
company affairs, in terms of sub-section 11 of Section 143 of the companies Act, 2013
since in Our opinion and according to the information and explanation given to us, the
said order is not applicable to the Company.
As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and dealt with by this Report
are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on
31/03/2015 taken on record by the Board of Directors, none of the directors is
disqualified as 31/03/2015 from being appointed as a director in terms of Section 164 (2)
of the Act.
(f) With respect to the other matters to be included in the Auditor’s Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements.
ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
|
For Aniket Kulkarni & Associates |
|
Firm Registration No. 130521W |
|
(Chartered Accountants) |
|
Aniket Kulkarni |
| Place: Mumbai |
Proprietor |
| Date: 17th August, 2015 |
M. No. 127246 |
ANNEXURE TO INDEPENDENT AUDITORS’ REPORT
The Annexure referred to in our report to the members of Core Education and
Technologies Limited the Company’) for the year Ended on 31st March, 2015. We
report that:
i. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets on the basis of available information.
b) As explained to us, all the fixed assets have not been physically verified by the
management in a phased periodical manner.
ii. In respect of its inventories:
The inventories of the Company comprises of software work-in-progress, being Intangible
in nature this clause is not applicable to the company
iii. In respect of the loans, secured or unsecured, granted by the Company to
companies, firms or other parties covered in the register maintained under Section 189 of
the Companies Act, 2013:
a) The Company has not granted any loans for the parties covered under Section 189 of
the Companies Act, 2013
b) Since no loans have been granted this clause is not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the
Company needs to strengthen the internal control system commensurate with its size and the
nature of its business for the purchase of inventory and fixed assets and for the sale of
goods and services. During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in such internal control system.
v. According to the information and explanations given to us, the Company has not
accepted any deposit from the public. Therefore, the provisions of Clause (v) of paragraph
3 of the CARO 2015 are not applicable to the Company.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to the
Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under
Section 148(1)(d) of the Companies Act, 2013 and are of the opinion that, the cost audit
is not applicable to the Company.
vii. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues including
Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, duty of Customs, Duty of Excise, Value Added Tax, Cess and other material
statutory dues have not been regularly deposited with the appropriate authorities. The
undisputed amounts payable in respect of the aforesaid dues were outstanding as at March
31st, 2015 for a period of more than six months from the date of becoming payable.
b) According to records of company, there are pending dues of sales tax which have not
been deposited within the due date of becoming payable.
The tabular format of pending statutory dues is as under:-
| Statutory Dues |
Total Amount |
Due for more than 6 months |
| TDS on Professional Fees |
18,263,949 |
17,784,327 |
| TDS on Salary |
11,510,105 |
11,499,652 |
| TDS on Rent |
8,494,845 |
8,494,845 |
| TDS on Contract |
9,891,506 |
9,801,370 |
| TDS on Non Resident |
8,326,773 |
8,326,773 |
| TDS on Brokerage/ |
33,694 |
33,694 |
| Commission |
|
|
| TDS on Interest |
54,640,370 |
47,475,916 |
| Profession Tax |
857,250 |
857,250 |
| VAT |
32,033,899 |
32,033,899 |
c) According to the records of the Company, there are no amounts that are due to be
transferred to the Investor Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been
transferred to such fund within time.
viii. The Company has incurred financial/cash losses in the immediately preceding
previous year and also in this financial year. As a result of it the net worth of the
Company is negative.
ix. Based on our audit procedures and according to the information and explanations
given to us, we are of the opinion that the Company has defaulted in repayment of dues to
financial institutions, banks and debenture holders. Details are as under:-
The delay in repayment of the dues to bank/ financial institutions/ debenture holders
and other parties are as follows:
| Sr. No. |
Particulars |
Principal |
Interest |
Total |
| 1 |
Banks |
|
|
|
|
More than 180 days |
- |
- |
- |
|
Less than 180 days |
96,389,487 |
- |
96,389,487 |
| 2 |
Debenture Holders |
|
|
|
|
More than 180 days |
- |
- |
- |
|
Less than 180 days |
- |
- |
- |
| 3 |
Financial |
|
|
|
|
Institution |
|
|
|
|
More than 180 days |
- |
- |
- |
|
Less than 180 days |
- |
- |
- |
| 4 |
Others |
|
|
|
|
More than 180 days |
- |
- |
- |
|
Less than 180 days |
- |
- |
- |
Further the Company has continuing default in respect of following dues to bank/
financial institutions/ debenture holders and other parties as at year ended:
| Sr. No. |
Particulars |
Principal |
Interest |
Total |
| 1 |
Banks |
|
|
|
|
More than 180 days |
5,539,379,560 |
721,458,451 |
6,260,838,011 |
|
Less than 180 days |
236,443,056 |
264,010,569 |
500,453,625 |
| 2 |
Debenture-holders |
|
|
|
|
More than 180 days |
237,000,000 |
270,971,161 |
507,971,161 |
|
Less than 180 days |
369,000,000 |
85,278,216 |
454,278,216 |
| 3 |
Lease obligations |
|
|
|
|
More than 180 days |
- |
|
- |
|
Less than 180 days |
- |
- |
- |
| 4 |
Financial Institution |
|
|
|
|
More than 180 Days |
5,024,756,154 |
498,142,450 |
5,522,898,604 |
|
Less than 180 Days |
124,444,772 |
292,280,074 |
416,724,846 |
|
Total |
|
|
|
x. The Company has given guarantees of Rs. 5,643,039,170 for loans taken by its wholly
owned subsidiaries viz. Core Education and Consulting Solutions INC., USA and Core
Education and Consulting Solutions (UK) Ltd from bank and/or financial institutions. In
our opinion and according to information and explanations given to us, the terms and
conditions though not formalized are not prejudicial to the interest of the Company.
xi. The Company has not raised new term loans during the year. The term loans
outstanding at the beginning of the year and those raised during the year have been
applied for the purposes for which they were raised.
xii. In our opinion and according to the information and explanations given to us, no
fraud by the Company and no material fraud on the Company has been noticed or reported
during the year.
|
For Aniket Kulkarni & Associates |
|
Firm Registration No. 130521W |
|
(Chartered Accountants) |
|
Aniket Kulkarni |
| Place: Mumbai |
Proprietor |
| Date: 17th August, 2015 |
M.No. 127246 |
+91-9892691696
