core education & technologies ltd share price Directors report

Dear Members,

Your Directors have pleasure in presenting the 30th Annual Report of your Company along with 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	3,437.56	6,275.32
Other Income	480.49	(33.40)
Variation in Inventory	287.43	530.03
Expenses	10,324.35	10,220.07
Exceptional Items	4,052.95	745.97
Profit Before tax	(10,746.68)	(5,254.16)
Less: Provision for tax (current)	-	-
Excess/(Short) Provision for earlier years	-	-
Provision for tax (deferred)	-	(232.84)
Profit after Tax	(10,746.68)	(5,021.32)
Add: Balance B/F from Previous Year	1,000.54	5,942.03
Excess/(Short) Provision for Earlier years	-	-
Profit Available for appropriations	(10,746.68)	(5,021.32)
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	(9,776.93)	1,000.54

Overview

The Company continued to face strong headwinds during the year under review. As reported last year, the Company’s CDR proposal was approved by the CDR EG. The approved proposal envisaged an investment of Rs. 100 crores from a prospective joint venture partner. In spite of the Company’s best efforts, such a joint venture did not happen, as a result of which it was decided to withdraw the CDR proposal. The withdrawal is at present under consideration with the CDR EG.

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

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

Your Company achieved a total operating income of 3,437.56 million as compared to Rs. 6,275.32 million during the previous financial year with a loss of 10,746.68 million as compared to a loss of 5,254.16 million during the previous financial year. Loss after tax was 10,746.68 million as compared to Rs. 5,021.32 million during the previous financial year.

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

On the exports and overseas operations, many customers had raised quality issues relating to assessment and intervention segment of the products. As reported last year, a management committee was formed to analyse and suggest the future course of action. Based on its findings, the committee had decided to write off INRs 1,769. 92 million, last year and make efforts to recover the rest. Based on the developments during the year under report, a further amount of INRs 1,730.49 has been written off in the current year.

As part of its annual exercise, the management also reviewed the carrying value of its IPR. Technological changes, adoption of new standards in the USA and fast changing student behavioural 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 has decided to write down the value of its IPR.

Therefore, management has made provisions for impairment of 3,287.84 million as compared to 1,291.52 million in the previous year, towards the carrying cost of such IPRs and treated an exceptional item.

The operations of the overseas subsidiaries have also suffered due to the above reasons. The revenues in USA subsidiaries have reduced to INRs 2,843.35 million from 5,459.59 million in FY 13. The carrying value of IPR in the subsidiaries has also reduced substantially due to reasons mentioned above. In view of this, the value of investments in the subsidiaries has eroded substantially. An amount of INRs 4,052.99 million has been provisioned during the current year to provide for such erosion.

To mitigate the financial stress, the Company has taken various steps including cost cutting exercise and bidding for low capital intensive projects with high margin. Also rationalization is done in terms of number of employees. The No. Of employees have reduced to 124 from 277.

A fire accident occurred on 18th July, 2014 at the Corporate office of the Company situated at 10th Floor, Lotus Business Park ,Off Link Road, Andheri (West), Mumbai - 400 053. Because of this incident the Company has lost some important data, both in the physical & the digital form though there are no major financial losses other than damage to property. The Company is in the process of assessing the extent of the damage caused 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 the financial 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 Act, 2013 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 these Board Meetings are 10th June, 2014, 14th August, 2014, 4th September, 2014, 14th November, 2014 and 14th February, 2015.

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

In accordance with the provisions of the Companies Act, 2013, Mr.Sanjeev Mansotra, Non-Executive Chairman of your Company is retiring by rotation at the ensuing Annual General Meeting and expressed his willingness to be reappointed as Director of the Company for 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 in specific functional areas and names of companies in which he holds Directorships and Memberships of the Board Committees, as stipulated in Clause 49 of the Listing Agreement with the stock exchanges are provided in the Corporate Governance forming part of the Annual Report.

Directors’ Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013, for the year ended 31st March, 2015 the Directors confirm that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and d) the Directors had prepared the annual accounts on a going concern basis; e) the Directors had laid down internal financial controls to be followed by the Company and that such financial controls are adequate and were operating effectively. f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that 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 the education sector also facing a slump. This required the company to manage its cost more efficiently without compromising on its productivity. Core understands the business needs to adapt to the economic realities and had taken steps like cutting the strength of its India team across functions to maintain the equilibrium in terms of right fit for right skill.

Recognizing the necessity to maintain its core team of skilled and competent work force every 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 economic turnaround in the future.

Best Practice

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

Directors and Key Managerial Personnel

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

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

During the year under review, Mr. Ganesh Umashankar resigned as the Company Secretary with effect from 31st December, 2014. Mr. Ashutosh Ghare, was appointed as the CEO effective 14th November, 2014. No other Key Managerial Personnel has been appointed or has tendered 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. Harihar Iyer and Mr. Sunder Shyam Dua were appointed as the Independent Directors of the Company for a period of 5 (five) consecutive years for a term up to the conclusion of the 34th Annual General Meeting.

As per the requirement of Section 149 (7) of the Companies Act, 2013, Mr. Harihar Iyer and Mr. Sunder Shyam Dua, the Independent Directors have given a declaration that they meet 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 to revive the operations by pursuing all alternatives available to it. Disposal of non-core assets, divestment of the Company’s overseas subsidiaries and a continued sustained search for an appropriate joint venture partner are part of these efforts. Recovery of dues on various government and other projects is also under way, both thru commercial and legal means.

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

Reporting of Frauds

During the year under review, there have been no frauds reported by the Statutory Auditors 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 of the 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 as required 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 and Outgoings

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

Risk Management Policy

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

Annual Evaluation

The performance of Board of Directors and the committees constituted by the Board and the individual directors has been evaluated during the Financial Year ended 31st March, 2015.

Particulars of Subsidiary companies or Joint ventures or associate company

The Company has 18 subsidiaries including step-down subsidiary companies as on 31st March, 2015. During the year, the Board of Directors (the Board) reviewed the affairs of material subsidiaries. The Company has, in accordance with Section 129(3) of the Companies Act, 2013 prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, the report on the performance and financial position of each of the subsidiary, associate and joint venture and salient features of the financial statements in the prescribed Form AOC-1 is annexed to this report [Annexure 1]. The Consolidated Financial Statement has been prepared in accordance with applicable Accounting Standards issued by The Institute of Chartered Accountants of India. 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 financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of the subsidiary will be available on our website www.core-edu-tech.com. These documents will also be available for inspection during business hours at the registered office of the Company.

Particulars of Deposits

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

Particulars of Material Orders

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

Audit Committee

The Audit Committee comprises of Mr. Sunder Shyam Dua, Chairman, Mr. Harihar Iyer, Independent Director and Mr. Nikhil Morsawala, Director. Mr. Pundi L. Narasimham resigned as a Director of the Company with effect from 18th July, 2014 and consequently ceased to be a Member of the Audit Committee. The Audit Committee continues to provide valuable advice and guidance in the areas of costing, finance and internal controls.

Auditors

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

M/s. Aniket Kulkarni & Associates, Chartered Accountants (Registration No. 130521W) are due to retire at the ensuing Annual General Meeting. The Company has received a written consent and a certificate from the Statutory Auditors, under Section 139 of the Companies Act, 2013, stating that the appointment, if made will be in accordance with Rule 4 (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 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this 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 as the Secretarial

Auditor for the Financial Year 2014-15. The report in form MR- 3 on the Audit carried out 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 assistance to the employees of the Company for the purpose of a purchase or subscription for any shares 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 the Company as none of the thresholds viz. Net Worth of Rs. 500 crore or more, Turnover of Rs. 1,000 crore or more or Net Profit of Rs. 5 crore or more were satisfied. Consequently, the Company has not constituted the Corporate Social Responsibility Committee.

Vigil mechanism

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

Issue of shares with differential voting rights

The Company has not issued any shares with differential voting rights pursuant to the provisions 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 any of its employees, pursuant to the provisions of Rule 8 of the Companies (Share Capital and Debenture) Rules, 2014.

Employee Stock Option

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

Corporate Governance

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

The Chairman’s declaration regarding compliance with CETL Code of Conduct for Directors 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 under Clause 49 of the Listing Agreement with the Stock Exchanges is presented as a separate section forming part of this Annual Report.

Acknowledgements

We thank our customers, investors, bankers and other stakeholders for their continued support during the year. We place on record our sincere appreciation of the contribution made by employees at all levels. Our consistent growth was made possible by their hard work, 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 and Outgoings

Information as per Section 134(3)(m) read with Companies (Accounts) Rules, 2014 and forming 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 measures are taken to reduce energy consumption. We constantly evaluate new technologies and invest to make our infrastructure more energy-efficient.

Some of the energy efficient practices adopted across the facilities of the Company to reduce 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 upcoming facilities to optimize power conservation.

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

• Installation of LCD monitors (Energy Efficient) in place of normal CRT monitors, thereby 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 of efficiency 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, frameworks, processes, and methodologies continue to be of top priority for us. This allows us to enhance quality, productivity and customer satisfaction through continuous innovation. The Company believes that technological obsolescence is a reality. Only progressive research and development will help us to accomplish future challenges and opportunities. We invest and encourage continuous innovation.

C) Foreign Exchange Earnings and outgo:

The Company continued to be net foreign earner during the year. Total foreign exchange earned by the company during the year under the review was INRs 550.38 million as compared to INRs 1,261.94 million during previous year.

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