The Directors have pleasure in presenting the 29th Annual Report of
your Company along with the audited financial statements for the year
ended 31st March, 2014.
RESULTS FROM OPERATIONS
(Amt Rs. in Million)
Income from Operations 6,275.32 1 1,228.40
Other Income 25.94 49.58
Variation in Inventory 530.03 (762.97)
Expenses 7,748.01 9,269.06
Exceptional Items 3,807.42 -
Profit Before tax (5,254.16) 2,008.91
Less: Provision for tax (current) - 402.03
Excess/(Short) Provision for
earlier years - -
Provision for tax (deferred) (232.84) 20.86
Profit after Tax (5,021.32) 1,586.03
Add: Balance B/F from Previous Year 5,942.03 4,713.67
Excess/(Short) Provision for Earlier
years - -
Profit Available for appropriations (5021.32) 1,586.03
Debenture Redemption Reserve - 87.83
Transfer to General Reserve - 190.00
Proposed Dividend (68.69) 68.69
Provision for Taxes on Dividends (11.14) 11.14
Minority Interest - -
Balance C/F to Balance Sheet 1,000.54 5,942.03
The year 2013-14 was very challenging for the Company. We continued
with the existing ongoing projects and were not in a position to bid
for any new projects. As reported previously, the Company''s Corporate
Debt Restructuring (CDR) proposal for restructuring its debts was
admitted for approval and was finally approved by CDR Empowered Group
(CDR EG) on 23rd July, 2014.
Your Company achieved a total operating income of Rs. 6,275.32 million
as compared to Rs. 1 1,228.40 million during the previous financial
year with a loss of Rs. 5,254.16 million as compared to profit of Rs.
2,008.91 million during the previous financial year. Loss after tax was
Rs. 5,021.32 million as compared to the profit of Rs. 1,586.03 million
during the previous financial year.
The financial stress still continues to haunt the Company, but
strategies are being worked for resurrecting the business and realizing
funds from sale of non-core assets and investment in subsidiaries, for
repayment of debts.
The losses are mainly attributed towards the writing off of certain
expenses incurred on ICT projects, Trade receivables and Impairment of
ICT Projects for five states having project contract value of Rs.
5,471.70 million were awarded to the Company. However, the Company was
unable to achieve financial closure for these projects. As a result,
the projects were left incomplete and consequently the contracts were
terminated by the respective State Governments. Since implementation of
majority of the projects had already commenced and was in progress, the
Company had already incurred an expenditure of Rs. 614.59 million for
this partial implementation. On the termination of the contract, the
company had to write off the expenditure incurred on these projects.
Also, the bank guarantees of Rs. 131.37 million given for these
projects has been invoked by the respective State Governments which has
been charged off as project expenses written off. The Haryana
Government had issued termination order of the ICT Project in that
state and also had issued notice for invocation of Bank Guarantee of
Rs. 295 million. The Company has filed a Special Leave Petition with
the Hon''ble Supreme Court against the termination order and invocation
of the Bank Guarantee. The matter is subjudice and pending outcome of
the legal proceedings, no adjustments has been made to the carrying
value as at 31st March, 2014 for the receivable of Rs. 748.31 million
and of the fixed assets of Rs. 1,002.14 million at this stage, for this
project. These has been drawn as an attention to the audit report for
the year ended 31st March, 2014.
On the exports and overseas operations, many customers had raised
quality issues relating to assessment and intervention segment of the
products. A management committee was formed to analyse and suggest the
future course of action. Customers in this segment would, generally
make additional improvements on the products sold to them and further
sell the upgraded/final products to their customers. During
negotiations, these customers had alleged that due to defective
products received, they had lost their contracts with reputed clients
and have claimed compensation. To avoid any legal claims and disputes
in future and to have continuity in overseas business operations, the
committee decided to write off the receivables of Rs. 1,769. 92
milllion and for settlement with the customers.
The management also reviewed the carrying value of it''s IPR in view of
the adoption of Common Core States Standard Initiative (CCSSI) in the
United States of America (USA) where these assets were substantially
used. The CCSSI is an education initiative in the USA that seeks to
establish consistent education standards across the states as well as
ensure that students graduating from high school are prepared to either
two or four year college programs or enter the workforce. Prior to the
CCSSI, each state had its own education standards and Company had the
required resources and capability to deliver the solutions. However,
with the change in regulations and requirements, company had been
investing in upgrading to the CCSSI to deliver the solutions
consistently and as per requirement. With the CCSSI now in place, all
the old products of the company that were aligned to the erstwhile
State Standards have become partially redundant. Whilst the erstwhile
State Standards will run parallel with the CCSSI for a few years, thus
making the old products still commercially relevant, the company has,
out of abundant caution, and with a conservative view, decided to fully
write down these products. Therefore, management has made provisions
for impairment of Rs. 1,291.52 million towards the carrying cost of
such IPRs and treated as an exceptional item.
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 106 from 277.
A fire accident occured 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 and the
Company admitted for Corporate Debt Restructuring Plan, your Directors
do not recommend any dividend for the financial year 2013-14.
Transfer to reserves:
There are no transfer of funds to General Reserves during the financial
Changes in Capital Structure
There is no change in Capital Structure of the Company during the year
SUBSIDIARY COMPANIES AND PARTICULARS REQUIRED UNDER SECTION 212 OF THE
COMPANIES ACT, 1956
The consolidated financial statement includes the financial statements
of the subsidiaries of the Company and forms part of this report. 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.
As per the provisions of Section 212 of the Companies Act, 1956
(hereinafter referred to as ''the Act''), your Company is required to
attach the Directors'' Report, Balance Sheet, Profit and Loss Account
and other information of the subsidiaries to its Balance Sheet.
Government of India (Ministry of Corporate Affairs), vide General
Circular 2/2011 dated 8th February, 201 1 has granted general exemption
to all the companies from attaching to its Balance Sheet, the
individual Annual Reports of all its subsidiary companies, as required
under Section 212 of the Act, subject to Board approval and fulfillment
of certain other conditions. Your Directors believe that the audited
consolidated accounts present a full and fair picture of the state of
affairs and financial conditions of the Company and its subsidiaries,
as is done globally. A statement pursuant to Section 212 of the
Companies Act, 1956 relating to the Company''s interest in subsidiaries
is attached to the financial statement and forms part of this Report.
The annual accounts of these subsidiaries and the related detailed
information will be made available to any Member of the Company seeking
such information and are also available for inspection by any Member of
the Company at the Registered Office of the Company.
BOARD OF DIRECTOR
Board of Directors of the Company comprises 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. S. S. Dua
and Mr. Harihar Iyer. Mr. Pundi L. Narasimham, Independent Director,
resigned from the Board with effect from 18th July, 2014.
In accordance with the provisions of the Companies Act, 2013, Mr.
Naresh Sharma, Executive Director, of your Company is retiring by
rotation at the ensuing Annual General Meeting and expressed his
willingness to be reappointed as the Executive Director of the Company
for a period of 5 years from the date of this Annual General Meeting.
Brief resume of Mr. Naresh Sharma proposed to be reappointed as
Executive 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 the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Director''s Responsibility Statement, it is
(a) that in preparation of the Annual Accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
(b) that we have selected such accounting policies and applied them
consistently and made judgements 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 loss of the
Company for the year;
(c) that we have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) that we have prepared the annual accounts on a going concern basis.
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
Your Company continues to be a CMMi Level 5 certification and an ISO
The Company endeavours to attain highest values of Corporate Standards.
The Company has adhered to the requirements set out by the Securities
and Exchange Board of India''s Corporate Governance practices and has
implemented all the stipulations prescribed, in the Clause 49 of the
Listing Agreement with Stock Exchanges. 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
AUDITORS & AUDITORS'' REPORT
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Asit Mehta &
Associates, Chartered Accountants, the Joint Statutory Auditors of the
Company, hold office until the conclusion of the ensuing Annual General
Meeting. The new Companies Act, 2013 has laid down a policy of rotation
of auditors to ensure appropriate Corporate Governance. The present
auditors have held office for more than five years. In keeping with the
spirit of new legislation, the Board of Directors recommend the
appointment of M/s. Sushil Budhia Associates as the Auditor for the FY
The Company has received confirmations from the new auditors to the
effect that their appointment, if made would be within the prescribed
limits under Section 139 of the Companies Act, 2013 and that they are
not disqualified for such reappointment within the meaning of Section
141 of the said Act.
The notes to Accounts referred to in the Auditor''s Report are self-
explanatory and therefore do not call for any further Comments.
The Company has not accepted any deposits from the public within the
meaning of Section 58A of the Companies Act, 1956 and as such, no
amount of principal or interest was outstanding on the date of the
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with Companies (Particulars of Employees) Rules, 1975, as
amended, the names and other particulars of employees forms part of the
However, having regard to the provisions of Section 219(1)(b)(iv) of
the said Act, the Annual Report excluding the aforesaid information is
being sent to all the members of the Company and others entitled
thereto,. Any member interested in obtaining such particulars may
write to the Company Secretary at the Registered Office of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo as required under Section 217
(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of
particulars in the report of Board of Directors) Rules, 1988 are
provided in the Annexure I to this report.
TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO INVESTOR
EDUCATION & PROTECTION FUND (IEPF)
During the year 2013-14, the company has transferred the Unclaimed
Dividend declared for the Year 2005-06 to the Investors Education and
Protection Fund (IEPF) established by the Central Government. The
dividend declared for the year 2006-07 has also been transferred to the
IEPF established by the Central Government in terms of Section 205C of
the Companies Act 1956. The Unclaimed Dividend for the year 2007-08 &
onwards can be claimed by the members by Corresponding the same to the
Company or the Registrar & Transfer Agent of the Company. Members are
requested to note that dividends not encashed or claimed within 7 years
from the date of transfer to the Company''s unpaid dividend account
will, as per Section 205A of the Companies Act, 1956, be transferred to
Pursuant to the provisions of the Investor Education & Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amounts lying with the Company as on 27th
September, 2013 (date of last Annual General Meeting) on the company''s
website www.core-edutech.com and also on the Ministry of Corporate
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 hardwork, solidarity,
cooperation and support and look forward to their continued support.
For and on behalf of the Board
Date: 14th August, 2014 Chairman