The Directors have pleasure in presenting the 28th Annual Report on
business and operations of your Company along with the audited
financial statements for the year ended 31st March, 2013.
rESULTS oF oPErATionS:
2012-13 2011-12 2012-13 2011-12
Income from Operations 19,074.83 16,378.57 11,228.40 8,783.88
Other Income 330.80 496.86 337.58 451.95
Variation in Inventory (913.83) (641.96) (762.97) 349.75
Expenses 16,492.48 13,235.66 10,320.04 6,532.97
Profit Before tax 3,826.98 4,281.73 2,008.91 2,353.12
Less: Provision for
tax (current) 1,097.12 1027.39 402.03 449.01
earlier years 0 (124.74) 0 (124.74)
tax (deferred) 20.88 148.17 20.86 148.17
Profit after Tax 2,708.98 3,230.92 1,586.03 1,880.68
Add: Balance B/F from
Previous Year 8,785.90 5,879.16 4,713.67 3,157.16
for Earlier years 0 (124.74) 0 (124.74)
Profit Available for
appropriations 2,708.98 3,230.92 1,586.03 1,880.68
Reserve 87.83 57.73 87.83 57.73
Transfer to General
Reserve 190.00 188.00 190.00 188.00
Proposed Dividend 68.69 67.49 68.69 67.49
Provision for Taxes
on Dividends 11.14 10.95 11.14 10.95
Minority Interest 1.82 0 0 0
Balance C/F to
Balance Sheet 11,135.40 8,785.90 5,942.03 4,713.67
The year 2012-13 was generally a steady year for your Company, though
the beginning of the headwinds that were to afflict the entire industry
were being felt towards the end of the year. On a consolidated basis,
your Company achieved a total operating income of Rs. 19,074.83 million
as compared to Rs. 16,378.57 million during the previous financial year.
Similarly, profit before tax was Rs. 3,826.98 million as compared to Rs.
4,281.73 million during the previous financial year. Profit after tax
was Rs. 2,708.98 million as compared to Rs. 3,230.92 million during the
previous financial year.
The headwinds that were felt towards the end of the year turned into a
virtual tornado for the Company in the first quarter of current
financial year 2013-14. The Company faced significant financial stress
due to decrease in sales revenue, increase in overdue trade receivables
and payables and non-availability of assessed working capital limits.
All this was the 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. Since the company
mainly follows the Business to Government model, cuts in government
expenditure significantly impact the order flow and cash flows of the
The Company''s order book for the current year declined significantly in
the USA due to fewer RFPs being issued at the beginning of this
calendar year. In addition to the sequester effect that kicked in for
the Federal Government of the USA, the implementation of the Common
Core Standard across the United States from the next academic year 2014
significantly reduced the order flow for the current year. This in turn
will adversely impact the volume of exports that the company will
execute from its Offshore Development Centers in India, putting further
strain on Indian Operations. This substantial impact on the Company is
expected to taper off over the next two to three years, once the
implementation of the Common Core Standard gathers full steam.
In India, the Company was plagued by very high receivables from State
Government customers, largely due to liquidity constraints faced by
both the Central and State Governments. The company''s market
capitalization also witnessed a drastic fall, impacting the fund
raising exercise of the company. The Company was able to complete only
one tranche of fund raising USD 50 million out of a total expected
raise of USD 150 million.
The cumulative impact of the reduced order flow in the USA, the reduced
cash flows in India and the inability to complete the USD 150 million
fund raising exercise due to adverse market conditions was seen in the
financial performance of the first quarter of the current year, which
saw a loss of Rs. 3,336.95 million. The revenue trends witnessed in the
first quarter are expected to continue through the year.
To mitigate the financial stress, the Company has taken various steps
including cost cutting exercise and opted for Corporate Debt
Restructuring (CDR) plan. Considering the above and based on a
detailed plan for the next 12 months prepared by the Management and
approved by the Board of Directors, the Company is confident of meeting
its obligations as and when they fall due.
Dividends and Appropriations:
In view of the Corporate Debt Restructuring Plan, your Company does not
recommend any dividend to the members for the financial year 2012-13.
Transfer to reserves:
The Company proposes to transfer Rs. 190 Million (Previous year Rs. 188
Million) to the General Reserve. An amount of Rs. 11,135.40 million
(Previous year Rs. 8,785.90 million) has been proposed on consolidated
basis to be retained in the Profit and Loss Account on consolidated
A brief overview of our business operation is provided in this section
which is discussed in detail in the Management Discussion and Analysis
section, forming part of this report.
In the US, CORE has a presence in over 42 States and provides
Technology enabled Education Solutions across four key elements of
education delivery, namely Assessment and Intervention, Governance,
Advanced Technologies and Consulting Solutions. Assessment and
Intervention products aims to effectively and actively track, measure
and improve student proficiency as well as ensure continuous progress
toward key educational objectives. While Governance segment is focused
on meeting the compliance and accountability needs of school districts,
government and corporate entities through a variety of special needs
student services and student tracking and ID software solutions.
Currently approximately 79% of the Consolidated revenues are generated
from the US business, and during the year under review, CORE Education
& Consulting Solutions INC., USA, one of our main wholly owned
subsidiaries in the US registered a Profit after Tax, to USD 16.8
million (Rs. 914.24 million). Overall we saw a decrease of 6.2% in the
revenues of our US subsidiaries (comprising CECS Inc, CETI Inc and CITS
Inc) from Rs. 9,233.8 million in FY12 to Rs. 8,658.06 million in the
current year FY 2012-13. Profit after tax for our US subsidiaries was
at Rs. 1,327.9 million in FY 201 2-1 3 compared toRs. 1,246.9 million in FY
201 1-12. New clients contracted by your company during the year
include Miami Dade Public Schools, Duval County Public Schools &
Gadsden County Public Schools.
CORE is actively involved in forging partnerships with other successful
companies to provide hardware products along with managed IT solutions,
integrated innovative products within classroom management, assessment,
and improvement. CORE has partnered with T-Mobile to offer broadband
connectivity for all of our mobile devices. In another partnership,
CORE tied up with Anthro Corp to create a security/charging cabinet for
the Kuno solution.
ITN Mark is based in Manchester with a nationwide branch network
consisting of 13 sites. CORE is keen to tap its U.K. teacher supply
solutions from primarily providing only teachers and teaching
assistants to also providing special education need specialists,
nursery and support staff as well. In addition, CORE plans to provide
temporary education professionals to academies or schools in the UK
that are directly funded by the central government.
Currently approximately 1 0% of the consolidated revenues are generated
from the UK business, and during the year under review, CORE Education
& Consulting Solutions (UK) Limited registered revenue of Rs.1,890.7
million, growth of 1 8.82% compared to Rs. 1,591.2 million in FY 201
Middle East and North Africa Business
CORE —BIT Campus spread over an area of 4 acres in Ras-al-Khaimah had a
good academic year 2012-13 with total of 226 students studying in
campus. Your Company also participated in GETEX Exhibition at Dubai
International convention centre in April 2012. For the current academic
year 201 3-1 4, there are 1 25 new enrollments across multiple courses.
During FY 1 3, your Company made significant inroads in the Middle East
& Africa region with a strong business pipeline. Core has expanded its
Teacher Supply Business in Middle East and has successfully signed few
Letter of Intent (LOI) in Ghana and Kenya. Company has also secured an
order for providing Campus Management Solution and is aggressively
looking to sell other technology enabled solutions such as FAIM across
During FY 201 2-1 3, the India business witnessed a sharp rise in
receivables from its State Government customers. This put a lot of
stress on the liquidity position in India. As a result, the Company
decided to consciously slow down its growth in the ICT Segment. Whilst
the company did receive new orders for implementation of Information &
Communication Technology (ICT) and Computer Aided Learning (CAL), it
had to perforce abandon three projects mid-way through implementation
in the first quarter of FY 201 3-1 4 due to lack of financial closure.
In Vocational business, in addition to the existing contracts under the
Swarnajayanti Gram Swarojgar Yojana (SGSY), Swarna Jayanti Shahari
Rozgar Yojana (SJSRY) & Government Hostel Scheme- Maharashtra. Your
Company has bagged significant contracts with one them being, the
contract from Ministry of Rural Development (MORD) to train and place
2,000 students from North Eastern states. We were also awarded the
contract from Social Justice and Special Assistance Department,
Government of Maharashtra to conduct training for 7,820 students in
Government hostels across Mumbai and Nagpur region. Another important
contract is from Gujarat Knowledge Society to provide training and
conduct exams for 1 1,800 students in Gujarat.
The Company deployed customized version of its turnkey examination
management tool ''EdMastery'' for Central Board of Secondary Education
(CBSE). CORE''s solution helped CBSE to automate the process of
generation and distribution of question papers and marking schemes
across the 1 2,000 CBSE affiliated schools. The solution provided
password protected unique question paper to every school. This solution
also provides the web based online test- Performance Analysis Test
(PAT) across different countries.
We have signed an MoU with EdCIL, a Public Sector Enterprise under
Ministry of Human Resource Development (MHRD), Government of India to
develop solutions for the Education sector in India and at
International level through the innovative knowledge base of EdCIL in
educational arena and our knowledge and experience in providing
technology based solutions for Education Training, Content Development
and Skill Testing.
Changes in Capital Structure
Allotment of equity shares against conversion of Foreign Currency
Convertible Bonds (''FCCBs''):
Pursuant to the approval received from the Members at the 24th AGM held
on September 24, 2009. The company had launched and priced the issue of
USD 60 Million 7% Convertible Bonds with an upsize option of USD 1 5
million, convertible into ordinary / equity shares of the Company. The
issue was fully subscribed and closed on 6th May 201 0, with an
aggregate issue of USD 75 million. The Bonds mature over a period of 5
years and 1 day with the maturity date 7th May, 2015. The Bonds carry
YTM and coupon of 7% p.a. The initial conversion price of the said
bonds, was fixed at 1 0% premium over the reference share price of Rs.
247.09 calculated in accordance with the applicable rule and
regulations governing the issue, under the guidelines issued by the
Reserve Bank of India and the Securities and Exchange Board of India in
this regard, which works out to Rs. 271 .80. The fixed exchange rate for
the issue was USD 1 = Rs. 44.43. During the year under review, bonds
worth USD 1 0,1 50,000 were converted (PY USD 1 5,696,000 ) against
which the Company had allotted 1,659,1 73 equity shares (PY. 25,65,749)
of f 2 each at a premium of f 269.80 per equity share. As on 31st
March, 2013, the end of the year, USD 48,937,000 bonds (PY. USD
59,087,000 bonds) were outstanding for conversion.
CORE Employee Stock Option Scheme:
The Company introduced and implemented the CORE Employee Stock Option
Scheme (the scheme) in CORE ESOS 2007 and CORE ESOS 2009, in accordance
with the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the
Guidelines). The detailed disclosure required under the relevant
guidelines is attached herewith and forms part of this report.
During the year, 48,326 equity shares (PY. 169,628 equity shares) under
CORE ESOS 2007 and 303,986 equity shares (PY. 591,328 equity shares)
under CORE ESOS 2009, were allotted against the exercise of stock
options by the eligible employees / Directors.
Considering all the allotments above, during the year 2012-2013, the
paid-up share capital of your Company stands increased from Rs.
224,944,682/- comprising 1 12,472,341 equity shares of Rs. 2/- each toRs.
228,967,652 comprising 1 14,483,826 equity shares of Rs. 2/- each.
SUBSIDIARY COMPANIES AND PARTICULARS REQUIRED UNDER SECTION 212 OF THE
COMPANIES ACT, 1956
Being a Global Corporate entity, your Directors believe that the
Consolidated Results represent the performance of the Company in a more
comprehensive manner as compared to the stand alone operations. In
view of that and also as required under the Listing Agreements with the
Stock Exchanges, a Consolidated Financial Statement of the Company and
all its subsidiaries are attached 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, 2011 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 DirEcTorS
Board of Directors of the Company comprises of Non-Executive Promoter
Chairman, Mr. Sanjeev Mansotra; three Executive Directors namely, Mr.
Naresh Sharma, Executive Director, Mr. Nikhil Morsawala, Director-
Finance and Prof. Dr. Arun Nigavekar, Executive Director; and three
Independent Directors, namely Mr. S. S. Dua, Mr. Harihar Iyer and Mr.
Pundi L. Narasimham. Four Directors of the Company, namely Mr K C
Ganjwal, Mr M. N. Nambiar, Mr Awinash Arondekar and Ms Maya Sinha have
resigned during the period under report. One new Director, namely Mr.
Pundi L. Narasimham, was appointed during the period under report.
In accordance with the provisions of the Act and the Articles of
Association of your Company, Prof. Dr. Arun Nigavekar, Executive
Director of your Company, is retiring by rotation at the ensuing Annual
General Meeting and expressed his unwillingness to continue to be
reappointed as Director of the Company.
Brief resume of Mr. Pundi L. Narasimham appointed as an Additional
Director at the Board Meeting held on 14th August, 2013, 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/chairmanships of Board Committees, as stipulated in Clause
49 of the Listing agreement with the stock exchanges are provided in
the report on Corporate Governance forming part of the annual report.
Directors'' responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Act, with
respect to Director''s Responsibility Statement, it is hereby confirmed:
(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 profit 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 ability to attract and retain talented employees is critical to
business success of any organization. At Core, we recognize that each
individual is unique and brings his/her unique talents to the
As part of our talent management strategies, we practice Strategic
Talent Acquisition, which takes a long-term view of not only filling
vacancies for today, but also using the candidates to fill positions in
the future to create sufficient talent pool. This has helped in
ensuring the availability of the right talent at the right time and
sometimes even ahead of time. With a view to develop future
capabilities, Core is also involved in Campus hiring to develop new
potential and through highly skilled training programmes to nurture the
skills of these new talents to enhance the talent pool for future
We have been successful in building a culture of personal growth and
have been able to engage talented people. This has been possible with a
robust performance management system. We are committed to cultivating a
performance-driven culture that rewards results and recognise
excellence. The objective of the performance management system is to
align each individual goal to the company''s business goals. Our strong
performance management system provides the ongoing processes and
practices to maintain a stellar workforce.
Employee development planning is an ongoing activity and people are
trained in the areas of technical competencies and behavioral
competencies such as leadership development, organizational change
management, team building and management of diverse teams. The
environment of continuous learning enables employees to shoulder higher
responsibilities with élan.
These initiatives provide a platform to the employees to understand the
organization and imbibe its culture. It promotes the sense of working
at an individual level and collective level to integrate their goals
with the company''s goal.
corporate Social responsibility
As a socially responsible organization, Core has been part of various
initiatives during the course of the year towards contributing to a
better society. Prominent amongst these initiatives have been the Blood
Donation Camp organised at its office premises across various locations
in Mumbai in association with the Umang Foundation which received an
overwhelming response from its employees. It saw participation from
employees at all levels come together to contribute towards this noble
cause making it a huge success. Such was the popularity of the
initiative that we had people from other organizations in and around
also participating in the Camp.
The organization has also been at the forefront of creating
environmental awareness amongst its employees. In order to create a
better environment and increase the Green Cover in the city it
organized a tree plantation drive whereby free saplings were
distributed to all its employees to be planted in areas in and around
their localities. Core had also organized various sessions to spread
awareness amongst its employees on the importance of following a
healthy lifestyle through interactive mediums like games and
Core has always been aware of its responsibilities as an organization
with a Social Conscience and it would always be its endeavor to
contribute to socially relevant issues in the years to come.
During the year, your Company has achieved CMMi Level 5 certification.
The Company continues to be an ISO 9001:2008 organization and working
towards achieving ISO 27001 certification, a standard for Information
Security Management Systems.
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 AnD AUDiTor''S 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 and are eligible for re-appointment.
The Company has received confirmations from the auditors to the effect
that their re-appointment, if made would be within the prescribed
limits under Section 224(1B) of the Companies Act, 1956 and that they
are not disqualified for such reappointment within the meaning of
Section 226 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 Act and as such, no amount of principal
or interest was outstanding on the date of the Balance Sheet.
In terms of the provisions of Section 217(2A) of the Act, read with
(Particulars of Employees) Rules, 1975 as amended, the names and other
particulars of employees forms part of the Director''s Report.
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 oUT Go
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
During the year 2012-13, the company has transferred the Unclaimed
Dividend declared for the Year 2004-05 to the Investors Education and
Protection Fund (IEPF) established by the Central Government. The
dividend declared for the year 2005-06 is being transferred within the
stipulated period to the IEPF established by the Central Government in
terms of Section 205C of the Companies Act 1956. The Unclaimed Dividend
for the year 2006-07 & 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 the IEPF. No claim shall lie
against the Company or the said Fund in respect of any amounts, which
were unclaimed and unpaid for a period of seven years from the dates
they first became due for payment and no payment shall be made in
respect of any such claims.
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
Place: Mumbai Sanjeev Mansotra
Date: 14th August, 2013 Chairman