CORE Education & Technologies Chairman's Speech > Engineering - Heavy > Chairman's Speech from CORE Education & Technologies - BSE: 512199, NSE: COREEDUTEC

CORE Education & Technologies

BSE: 512199|NSE: COREEDUTEC|ISIN: INE247G01024|SECTOR: Computers - Software - Training
, :
VOLUME 5,590
CORE Education & Technologies is not traded in the last 30 days
Mar 12
Chairman's Speech (CORE Education & Technologies) Year : Mar '13
Dear Shareholders,
 The financial year 2012-13 was a very challenging year for your company
 amidst subdued economic growth across developed and emerging markets.
 After having achieved the milestone of becoming India''s largest global
 education company, we have seen umpteen challenges across geographies.
 Now, your company''s business is aligned across six key elements of
 education delivery - Teaching, Learning, Assessment & Intervention,
 Governance, Advanced Technologies and Consulting Solutions - that are
 designed to present customers with comprehensive and end-to-end
 Our FY 2012-13 revenue grew by 16.5% to Rs. 1,907 crores  79% of which
 came from the US, 10% from the UK and the remaining 11% from India and
 other countries. The operating margins (EBITDA) for FY 2012- 13 was at
 Rs. 735 crores at a healthy 38%. However, the profit before tax showed a
 decline of 10.6% over the previous year mainly on account of the higher
 interest charges as well as the high depreciation and amortizations
 during the year. Your Company was able to sustain these results on
 account of its continued client relationships built in leading markets,
 ably supported by the ongoing development of IP and the ability to sew
 together a host of acquisitions to emerge as a specialist in
 technology-driven education solutions.
 Your Company has also successfully consolidated its overseas
 subsidiaries during the year to exploit business and operational
 synergies between developed and developing markets. Now, Core Education
 & Consulting Solutions Pte Limited (the Singapore entity) is the
 holding company for some of its subsidiaries in USA, UK and Middle
 Further, despite a tough financial market accentuated by global and
 domestic uncertainties, your Company was able to raise USD 50 million
 by way of a Term Loan in its US Subsidiary  Core Education &
 Consulting Solutions Inc.
 However, FY 2012-13 has not been a smooth ride for the Company. Your
 Company faced significant financial stress towards the end of the
 fiscal year mainly on account of decrease in sales, increase in
 receivables and non-availability of assessed working capital limits.
 These were a result of the economic and liquidity stress felt by
 various governments across the world, leading to significant cuts in
 public expenditure in areas including education. Such cuts in
 government expenditure significantly impacted the order flow and cash
 flows of the company since your Company mainly follows the Business to
 Government model. The company''s fund raising plans were further
 impacted by a sharp decline in its market capitalization led by a
 turbulent period for the Indian equity market, especially the listed
 mid-cap universe. All these have prompted your Company to initiate
 discussions with its lenders to restructure its debts and it has
 approached the Corporate Debt Restructuring forum for the same. The
 debt restructuring exercise will enable the Company to comprehensively
 address the liquidity issues by matching the maturity profile of debt
 with the business cash flows which would get streamlined in some time.
 The muted growth was also a result of tightening of government budgets
 in your company''s major markets  USA and UK. In the USA, the Congress
 passed the Budget Control Act of 2011, which put into place automatic
 federal budget cuts, known as a sequester, to take effect if Congress
 failed to enact legislation to reduce the federal deficit by March 1,
 2013.  However, since the Congress did not act on the same, these
 budget cuts are now in effect. Further, the austerity measures in the
 UK resulted in a year of stagnation there as well.
 Despite all these, in line with your Company''s mission of making
 students campus or career oriented, your Company is betting big on
 vocational training for the Indian market and intend to take up new
 initiatives in this area in the current financial year. Further, in the
 area of vocational development, the goal is to help bring constructive
 reforms in employability education.
 Your Company has a collaboration with the University of Oxford and
 based on which it has been able to create teacher training content
 which is ready for commercial use in India as well as across the globe.
 The Continuous Teacher Professional Development program is ready for
 launch and the Company expects to reap the benefits of this
 collaboration in the near future.
 In the coming year, your Company plans to foray into the Model Schools
 scheme to be implemented under Public Private Partnership (PPP) model
 with Ministry of Human Resource Development (MHRD) in India.
 Besides India, our focus on developing markets includes foray into
 African and Middle East markets. Initial success includes a partnership
 with the provincial government of Ras al-Khaimah in the UAE for running
 a higher education institute offering management, architecture and
 engineering degrees in content partnership with BIT, Ranchi. As you are
 aware, your Company had entered into a strategic tie up with BIT,
 Ranchi for management of its RAK Campus. It plans to launch multiple
 new programmes - Diploma and Bachelor degree in Mechanical Engineering,
 Professional Certificate courses in IATA, CIMA etc, Part time Degree
 courses in Engineering and Management Discipline.
 While we have always strived to deliver our best, the global
 acknowledgment of same is always heartening. We were recently named
 Dell Premier Partner of the year for 2012. Your Company was also ranked
 No. 1 under India''s Top 10 Transnational Companies with International
 Asset Base of USD 500 million by Indian School of Business.
 Though we expect a tepid growth in our established markets, we see a
 moderate pick up towards the end of 2014 on the back of improved
 financial environment. Whilst we look to consolidate in these regions,
 our expansion into new geographies like Middle East, Africa and Far
 East will contribute to the Company''s overall growth in the years
 In conclusion, I would like to thank all the employees for their
 unstinted commitment and contribution in your Company in these tough
 times. I continue to look forward to the Board of Directors'' guidance
 and your support during this challenging phase for the Company.
 Best wishes,
 Sanjeev Mansotra
Source :
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