MIRA
INFORM REPORT
|
Report Date : |
14.06.2014 |
IDENTIFICATION DETAILS
|
Name : |
EDUCOMP SOLUTIONS LIMITED |
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Registered
Office : |
1211, |
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Country : |
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Financials (as
on) : |
31.03.2013 |
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Date of
Incorporation : |
07.09.1994 |
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Com. Reg. No.: |
55-061353 |
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Capital
Investment / Paid-up Capital : |
Rs. 244.810
Millions |
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CIN No.: [Company Identification
No.] |
L74999DL1994PLC061353 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
DELE01691E |
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PAN No.: [Permanent Account No.] |
AAACE2983M |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Subject is engaged in providing Digital Educational content in the classroom through its patented product ‘Smart Class’ and ‘Edureach’ (ICT). |
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No. of Employees
: |
16919 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ca (20) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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Status : |
Moderate |
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Payment Behaviour : |
Slow |
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Litigation : |
Exist |
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Comments : |
Subject is an established company having a moderate track record. There appears loss recorded by the company during 2013. However,
reserves of the company appears to be decent. The rating takes into consideration the weak financial performance of
the company. i.e. decline in operating income and net loss. However, trade relations are reported to be fair. Business is active.
Payments are reported to be slow. The company can be considered for business dealings on safe and
secured trade terms and conditions. |
NOTES :
Any query related to this report can be made on
e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
US investment bank Goldman
Sachs has upgraded its outlook on Indian markets as it expects positive
impact of the election cycle.
India’s economy may
grow 4.7 % in the current financial year, lower than the official estimate of
4.9 %, Fitch Rating said. The global rating agency expects the economy to pick
up in the next two financial years.
Global ratings
agency Standard & Poor said increasing focus by India Inc on lowering debt
is likely to improve their credit profiles.
Singapore (1.1 million
Indian tourists in 2012), Thailand (one million), the United Arab Emirates
().98 million) and Malaysia ().82 million) emerged as the preferred holidays
hotspots for Indians. The total figure is expected to increase to 1.93 million
by 2017, according to the latest Eurmonitor international report.
There is a $29.34 bn
outward foreign direct investment by domestic companies between April and
January of 2013/14 which has seen some signs of recovery according to a Care
Ratings report.
There are 264 number
of new companies being set up every day on average during 2014. Most of them
are registered in Mumbai. India had 1.38 million registered companies at the
end of January, 2014.
Twitter like
messaging service Weibo Corporation has filed to raise $ 500 million via a US
initial public offering. Alibaba, which owns a stake in Weibo is expected to
raise about $ 15 billion New York this year in the highest profile Internet IPO
since Facebook’s in 2012.
Bharti Airtel has
raised Rs.2,453.2 crore (350 million Swiss Francs) by selling six-year bonds at
a coupon rate of three per cent and maturing in 2020. This is the largest ever
bond offering by an Indian company in Swiss Francs. Bharat Petroleum
Corporation raised 175 million Swiss Francs by selling five year bonds at 2.98
% coupon rate in February.
Indian Oil
Corporation plans to invest Rs 7650 crore in setting up a petrochemical complex
at its almost complete Paradip refinery in Odhisha in three to four years. The
company board is set to consider the setting up of a 700000 tonne per annum
polypropylene plant at an estimated cost at Rs.3150 crore.
Global chief
information officers at gathering in Bangalore in April to meet Indian startups
at an event called Tech50 Watchout for Little Eye Labs-Facebook type deals in
the making
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
Long term bank facilities: “D” |
|
Rating Explanation |
Excepted to be in a default. |
|
Date |
25.03.2014 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
INFORMATION DECLINED
MANAGEMENT NON-COOPERATIVE (Tel. No.: 91-11-25755920)
LOCATIONS
|
Registered Office : |
1211, Padma Tower, 1, 5, Rajendra Place, New Delhi – 110008, India |
|
Tel. No.: |
91-11-25755920/ 25762725/ 25766484 |
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Fax No.: |
91-11-25766775 |
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E-Mail : |
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Website : |
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Corporate Office : |
Educomp Tower, 514, Udyog Vihar, Phase-II, Gurgaon - 122001, Haryana,
India |
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Tel. No.: |
91-124-4529000 |
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Branch Office : |
4th Floor,
Kaatyani Business Park,Off Mahakali Caves Road, Mulgaon, MIDC, Andheri
(East), Mumbai – 400093, Maharashtra, India |
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Tel. No.: |
91-22-40942900 |
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Branch Office : |
Also located at Bangalore Noida Kolkata Chennai Gujarat Lucknow Secunderabad Raipur Guwahati Tripura Chandigarh Bhubaneswar Ranchi Jaipur Bharatpur Vishakhapatnam Parawnoo Pune |
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Overseas Office: |
Located at Singapore USA |
DIRECTORS
As on 31.03.2013
|
Name : |
Mr. Shantanu Prakash |
|
Designation : |
Chairman and Managing Director |
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Date of Birth/Age : |
48 Years |
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Qualification : |
PGDM(IIM-A) |
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Experience : |
19 Years |
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Date of Appointment : |
07.09.1994 |
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Name : |
Mr. Jagdish Prakash |
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Designation : |
Whole-Time Director |
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Name : |
Mr. Sankalp Srivastva |
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Designation : |
Independent Non Executive Director |
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Name : |
Mr. Shonu Chandra |
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Designation : |
Independent Non Executive Director |
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Name : |
Mr. Rajiv Krishan Luthra |
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Designation : |
Independent Non Executive Director |
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Name : |
Dr. Subbarao Valluri Venkata |
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Designation : |
Independent Non Executive Director |
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Name : |
Mr. Roy Campbell II |
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Designation : |
Non-Independent Non Executive Director |
KEY EXECUTIVES
|
Name : |
Mr. Anil Sharma |
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Designation : |
Company Secretary |
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Name : |
Mr. Harpreet Singh |
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Designation : |
President – Higher Education |
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Name : |
Mr. Raman Bajaj |
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Designation : |
Senior Vice President |
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Name : |
Mr. Sanjay Jain |
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Designation : |
CEO |
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Name : |
Mr. Sharad Agarwal |
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Designation : |
President |
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Audit Committee: |
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|
Name : |
Mr. Sankalp Srivastava |
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Designation : |
Chairman, Independent and Non Executive Director |
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Name : |
Mr. Shonu Chandra |
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Designation : |
Member, Independent and Non Executive Director |
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|
Name : |
Mr. Shantanu Prakash |
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Designation : |
Member, Promoter and Executive Director |
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Shareholders’
Investor Grievance Committee: |
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Name : |
Mr. Sankalp Srivastva |
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Designation : |
Chairman, Independent and Non-Executive Director |
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Name : |
Mr. Shonu Chandra |
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Designation : |
Member, Independent and Non-Executive Director |
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Name : |
Mr. Jagdish Prakash |
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Designation : |
Member, Non independent and Executive Director |
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Remuneration
Committee: |
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Name : |
Mr. Sankalp Srivastava |
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Designation : |
Chairman, Independent and Non Executive Director |
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Name : |
Mr. Shonu Chandra |
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Designation : |
Member, Independent and Non Executive Director |
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Name : |
Dr. Subbarao Valluri Venkata |
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Designation : |
Member, Independent and Non Executive Director |
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Finance Committee: |
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Name : |
Mr. Sankalp Srivastava |
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Designation : |
Chairman, Independent and Non Executive Director |
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|
Name : |
Mr. Shantanu Prakash |
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Designation : |
Member, Promoter and Executive Director |
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Name : |
Mr. Jagdish Prakash |
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Designation : |
Member, Non independent and Executive Director |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2014
|
Category of
Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
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|
47553645 |
38.84 |
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|
7284600 |
5.95 |
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|
54838245 |
44.79 |
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Total shareholding of Promoter and Promoter Group (A) |
54838245 |
44.79 |
|
(B) Public Shareholding |
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|
1315 |
0.00 |
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|
400016 |
0.33 |
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|
10168 |
0.01 |
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|
26329578 |
21.50 |
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0 |
0.00 |
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|
26741077 |
21.84 |
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|
6801135 |
5.55 |
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|
23175479 |
18.93 |
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|
1266594 |
1.03 |
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|
9618538 |
7.86 |
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|
1092724 |
0.89 |
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|
449311 |
0.37 |
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|
580 |
0.00 |
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|
7320997 |
5.98 |
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|
754926 |
0.62 |
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|
40861746 |
33.37 |
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Total Public shareholding (B) |
67602823 |
55.21 |
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Total (A)+(B) |
122441068 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
|
|
|
|
0 |
0.00 |
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|
0 |
0.00 |
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|
0 |
0.00 |
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Total (A)+(B)+(C) |
122441068 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject is engaged in providing Digital Educational content in the classroom through its patented product ‘Smart Class’ and ‘Edureach’ (ICT). |
GENERAL INFORMATION
|
No. of Employees : |
16919 (Approximately) |
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Bankers : |
· Axis Bank Limited Canara Bank HDFC Bank ICICI Bank Limited IndusInd Bank State Bank of India State Bank of Bikaner and Jaipur State Bank of Patiala Standard Chartered Bank Syndicate Bank Yes Bank |
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Facilities : |
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Banking
Relations : |
-- |
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Name : |
Haribhakti and Company Chartered Accountants |
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Subsidiary Companies
(Direct and Indirect Holding): |
· Wheitstone Productions Private Limited Edumatics Corporation Inc., USA Educomp Learning Private Limited Educomp Infrastructure and School Management Limited Educomp School Management Limited Educomp Learning Hour Private Limited Educomp Asia Pacific Pte. Limited, Singapore Wiz Learn Technologies Pte Limited, Singapore (formerly
Asknlearn pte Limited) Singapore Learning.com Pte Limited, Singapore Vidya Mandir Classes Limited Pave Education Pte Ltd, Singapore Wiz Learn Pte Ltd., Singapore Authorgen Technologies Limited* Shikhya Solutions Inc, USA* Educomp Software Limited Educomp Infrastructure Services Private Limited Educomp Professional Education Limited Learning Internet Inc., U.S.A. Educomp APAC Services Limited, BVI Savvica Inc.Canada Euro Kids International Limited** Eurokids India Limited** Educomp Child Care Private Limited Educomp Online Supplemental Service Limited Educomp Intelprop Ventures Pte. Limited, Singapore Educomp Investment Management Limited Falcate Builders Private Limited Newzone Infrastructure Private Limited Rockstrong Infratech Private Limited Reverie Infratech Private Limited Herold Infra Private Limited Growzone Infrastructure Private Limited Hidream Constructions Private Limited Leading Edge Infratech Private Limited Strotech Infrastruture Private Limited Markus Infrastructure Private Limited Orlando Builders private Private Limited Crosshome Developers private Private Limited Good Luck Structure private Private Limited Evergreen Realtech private Private Limited Zeta Buildcon private Private Limited Onega Infrastructure Private Limited Grider Infratech Private Limited Boston Realtech Private Limited Modzex Infrastructure Private Limited Virtual Buildtech Private Limited Laservision Estates Private Limited Euro School International Limited** Euro School Properties and Infrastructure Limited** Knowledge Vistas Limited Gateforum Educational Services Private Limited Educomp Global Holding WLL Educomp Global FZE (w .e. f 22nd April 2012) |
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|
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|
Associates: |
· Greycells18 Media Limited Zeebo Interatctive Studios India Private Limited (w.e.f 11th
May, 2011 and sold out to Lakshya Digital on 17th Feb 2012) |
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|
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|
Joint Venture of
Direct Subsidiary: |
· Educomp Raffles Higher Education Limited Educomp Higher Initiatives Pte Limited, Singapore |
|
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|
|
Others over which
company has significant control (including
subsidiary Of Joint Venture of Subsidiary): |
· Learning Links Foundation Learning Leadership Foundation Education Quality Foundation of India Richmond Educational Society Indiacan Education Private Limited Millennium InfraDevelopers Limited A Plus Education Solution Private Limited Lakshya Digital Private Limited Unnati Educational Trust A P Eduvision Private Limited |
Note:
* ceased to be subsidiarary w.e.f. 14th January, 2013
** ceased to be subsidiarary w.e.f. 31st December, 2012
CAPITAL STRUCTURE
As on 26.09.2013
Authorised Capital : Rs. 400.000 Millions
Issued, Subscribed & Paid-up Capital : Rs.
244.889 Millions
As on 31.03.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
200,000,000 |
Equity Shares |
Rs.2/- each |
Rs. 400.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
122,407,493 |
Equity Shares |
Rs.2/- each |
Rs. 244.810 Millions |
|
|
|
|
|
NOTE
a. Reconciliation of the
shares outstanding at the beginning and at the end of the reporting period
|
Particulars |
As at March 31, 2013 |
|
|
Number |
Rs. In Millions |
|
|
Shares outstanding at the beginning of the year |
96,063,930 |
192.13 |
|
Shares issued during the year |
26,343,563 |
52.68 |
|
Shares outstanding at the end of the year |
122,407,493 |
244.81 |
b. Terms/ rights
attached to equity shares
The Company has only one class of equity shares having a par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting except where interim dividend is distributed.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
c. Details of
shareholders holding more than 5% shares in the Company
|
Particulars |
As at March 31, 2013 |
|
|
No. of shares held |
% of Holding |
|
|
Equity shares of
Rs. 2 each fully paid-up |
|
|
|
Mr. Shantanu Prakash |
35,135,205 |
28.70% |
|
A.P Eduvision Private Limited |
7,284,600 |
5.95% |
|
MKCP Institutional Investor (Mauritius) II Limited |
9,898,370 |
8.09% |
|
Macquarie Finance (India) Private Limited |
9,180,000 |
7.50% |
|
Citigroup Global Markets Mauritius Private Limited |
6,791,634 |
7.50% |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders'
Funds |
|
|
|
|
(a) Share Capital |
244.810 |
192.130 |
191.090 |
|
(b) Reserves & Surplus |
19608.910 |
17911.240 |
16065.060 |
|
(c) Money
received against share warrants |
411.660 |
0.000 |
0.000 |
|
|
|
|
|
|
(2)
Share Application money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
20265.380 |
18103.370 |
16256.150 |
|
|
|
|
|
|
(3) Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
6262.530 |
489.580 |
4746.240 |
|
(b) Deferred tax liabilities (Net) |
0.000 |
0.000 |
0.000 |
|
(c) Other long term liabilities |
174.780 |
169.570 |
201.870 |
|
(d) long-term provisions |
93.630 |
80.390 |
52.030 |
|
Total Non-current Liabilities (3) |
6530.940 |
739.540 |
5000.140 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
3389.880 |
2888.990 |
238.800 |
|
(b) Trade payables |
2250.620 |
2603.390 |
1842.640 |
|
(c) Other current
liabilities |
3126.150 |
6730.640 |
2140.180 |
|
(d) Short-term provisions |
334.830 |
379.850 |
316.020 |
|
Total Current Liabilities (4) |
9101.480 |
12602.870 |
4537.640 |
|
|
|
|
|
|
TOTAL |
35897.800 |
31445.780 |
25793.930 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
626.140 |
918.410 |
889.650 |
|
(ii) Intangible Assets |
704.740 |
479.830 |
390.900 |
|
(iii) Capital
work-in-progress |
20.550 |
0.390 |
36.040 |
|
(iv)
Intangible assets under development |
17.700 |
0.000 |
0.000 |
|
(b) Non-current Investments |
16497.160 |
16221.100 |
13723.630 |
|
(c) Deferred tax assets (net) |
131.620 |
49.050 |
0.240 |
|
(d) Long-term Loan and Advances |
261.740 |
37.360 |
774.260 |
|
(e) Other Non-current assets |
55.040 |
868.070 |
808.980 |
|
Total Non-Current Assets |
18314.690 |
18574.210 |
16623.700 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
346.870 |
1.500 |
19.840 |
|
(b) Inventories |
492.220 |
771.460 |
361.430 |
|
(c) Trade receivables |
13035.880 |
8650.470 |
5069.920 |
|
(d) Cash and cash
equivalents |
312.750 |
1156.140 |
2160.710 |
|
(e) Short-term loans and
advances |
3285.080 |
2220.520 |
1537.900 |
|
(f) Other current assets |
110.310 |
71.480 |
20.430 |
|
Total Current Assets |
17583.110 |
12871.570 |
9170.230 |
|
|
|
|
|
|
TOTAL |
35897.800 |
31445.780 |
25793.930 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
7,331.100 |
10,765.120 |
10,206.630 |
|
|
|
Other Income |
872.940 |
155.250 |
411.100 |
|
|
|
TOTAL (A) |
8,204.040 |
10,920.370 |
10,617.730 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Purchases of traded goods |
3,273.580 |
4,273.290 |
2,927.020 |
|
|
|
Changes in inventories
Stock-in-trade |
82.180 |
(410.030) |
(70.220) |
|
|
|
Employees benefits expense |
1,965.490 |
1,769.210 |
1,416.060 |
|
|
|
Prior Period Items |
16.670 |
(31.980) |
(2.390) |
|
|
|
Other expenses |
1,439.650 |
1,499.200 |
913.900 |
|
|
|
TOTAL (B) |
6,777.570 |
7,099.690 |
5,184.370 |
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION (A-B) (C) |
1,426.470 |
3,820.680 |
5,433.360 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
1,388.550 |
902.380 |
659.170 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
37.920 |
2,918.300 |
4,774.190 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
527.680 |
473.500 |
411.140 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX (E-F) (G) |
(489.760) |
2,444.800 |
4,363.050 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
(82.560) |
555.770 |
474.370 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX (G-H) (I) |
(407.200) |
1,889.030 |
3,888.680 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
9055.700 |
7,294.810 |
3,852.300 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividends |
6.860 |
28.990 |
57.590 |
|
|
|
Corporate Dividend Tax |
1.110 |
4.700 |
(0.290) |
|
|
|
Transferred to general reserve |
0.000 |
94.450 |
388.870 |
|
|
BALANCE CARRIED
TO THE B/S |
8,640.530 |
9,055.700 |
7,294.810 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Revenue from content licencing |
0.000 |
0.000 |
29.190 |
|
|
|
Revenue from sponsorship |
0.000 |
1.360 |
0.000 |
|
|
|
Revenue from sale of hardware and educational products |
141.350 |
15.510 |
0.000 |
|
|
|
Revenue from other services |
8.110 |
0.050 |
8.270 |
|
|
TOTAL EARNINGS |
149.460 |
16.920 |
37.460 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Trading goods |
612.280 |
2,063.460 |
483.150 |
|
|
TOTAL IMPORTS |
612.280 |
2,063.460 |
483.150 |
|
|
|
|
|
|
|
|
|
|
Earnings / (Loss)
Per Share (Rs.) |
|
|
|
|
|
|
Basic |
(3.61) |
19.68 |
40.74 |
|
|
|
Diluted |
(3.61) |
19.59 |
37.76 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2013 |
30.09.2013 |
31.12.2013 |
31.03.2014 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
4th
Quarter |
|
Net Sales |
1348.700 |
601.800 |
399.300 |
473.200 |
|
Total Expenditure |
1421.000 |
978.700 |
760.100 |
703.500 |
|
PBIDT (Excl OI) |
(72.300) |
(377.000) |
(360.700) |
(230.400) |
|
Other Income |
33.600 |
34.500 |
105.100 |
175.700 |
|
Operating Profit |
(38.700) |
(342.500) |
(255.600) |
(54.700) |
|
Interest |
370.200 |
385.100 |
392.800 |
321.800 |
|
Exceptional Items |
(5.200) |
0.000 |
0.000 |
(611.800) |
|
PBDT |
(414.100) |
(727.600) |
(648.500) |
(988.300) |
|
Depreciation |
134.900 |
139.900 |
134.800 |
131.200 |
|
Profit Before Tax |
(549.000) |
(867.500) |
(783.300) |
(1119.500) |
|
Tax |
(23.900) |
(89.400) |
(57.000) |
(26.800) |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
(525.100) |
(778.100) |
(726.300) |
(1092.800) |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
(525.100) |
(778.100) |
(726.300) |
(1092.800) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
PAT / Total Income |
(%) |
(4.96)
|
17.30 |
36.62 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
(6.68)
|
22.71 |
42.75 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(2.55)
|
16.11 |
36.26 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.02)
|
0.14 |
0.27 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
0.48
|
0.19 |
0.31 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.93
|
1.02 |
2.02 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2011 |
31.03.2012 |
31.03.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Share Capital |
191.090 |
192.130 |
244.810 |
|
Reserves & Surplus |
16065.060 |
17911.240 |
19608.910 |
|
Money received against share
warrants |
0.000 |
0.000 |
411.660 |
|
Net
worth |
16256.150 |
18103.370 |
20265.380 |
|
|
|
|
|
|
long-term borrowings |
4746.240 |
489.580 |
6262.530 |
|
Short term borrowings |
238.800 |
2888.990 |
3389.880 |
|
Total
borrowings |
4985.040 |
3378.570 |
9652.410 |
|
Debt/Equity
ratio |
0.307 |
0.187 |
0.476 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
31.03.2011 |
31.03.2012 |
31.03.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
10206.630 |
10765.120 |
7331.100 |
|
|
|
5.472 |
-31.900 |
NET PROFIT MARGIN
|
Net
Profit Margin |
31.03.2011 |
31.03.2012 |
31.03.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
10206.630 |
10765.120 |
7331.100 |
|
Profit |
3888.680 |
1889.030 |
(407.200) |
|
|
38.10% |
17.55% |
(5.55%) |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
----- |
|
14] |
Estimation for coming financial
year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
No |
|
21] |
Market information |
----- |
|
22] |
Litigations that the firm
/ promoter involved in |
Yes |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
----- |
|
26] |
Buyer visit details |
----- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
Yes |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
LITIGATION DETAILS
IN THE HIGH COURT OF DELHI AT NEW DELHI
CO.PET. 613/2013
SANFORD, L.P., USA and ANR. ..... Petitioners
Through: Mr.Ashish Bhan, Ms. Padamja Kaul with Ms.Aditi Awasthy, Advs.
versus
EDUCOMP SOLUTIONS LTD.
..... Respondent
Through: Ms.Vijeta Mukheree, Adv.
CORAM:
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
ORDER
12.05.2014
Learned counsel for the petitioner prays for and is granted four weeks time to
file rejoinder to the reply filed by the respondent.
List on 23rd September, 2014.
Interim order dated 26th November, 2014 shall continue till
further orders.
SANJEEV SACHDEVA, J
MAY 12, 2014
INDEX OF CHARGES
|
S.NO. |
CHARGE ID |
DATE OF CHARGE
CREATION/MODIFICATION |
CHARGE AMOUNT
SECURED |
CHARGE HOLDER |
ADDRESS |
SERVICE REQUEST
NUMBER (SRN) |
|
1 |
10491363 |
29/03/2014 |
400,000,000.00 |
ICICI BANK LIMITED |
LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJARAT - 390015, INDIA |
C04067674 |
|
2 |
10419866 |
18/06/2013 * |
800,000,000.00 |
ICICI BANK LIMITED |
LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJARAT - 390015, INDIA |
B77469088 |
|
3 |
10422838 |
28/03/2013 |
248,200,000.00 |
INDUSIND BANK LTD. |
DR. GOPAL DAS BHAWAN, 28, BARAKHAMBA ROAD, NEW DELHI - 110001, INDIA |
B74094137 |
|
4 |
10403332 |
29/12/2012 |
300,000,000.00 |
SYNDICATE BANK |
CORPORATE FINANCE BRANCH, FIRST FLOOR, SAROJINI, HOUSE, BHAGWAN DASS ROAD, NEW DELHI - 110001, INDIA |
B68251495 |
|
5 |
10392058 |
20/11/2012 |
350,000,000.00 |
AXIS TRUSTEE SERVICES LIMITED |
AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND, PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA |
B63775373 |
|
6 |
10388795 |
16/11/2012 |
1,000,000,000.00 |
UNION BANK OF INDIA |
INDUSTRIAL FINANCE BRANCH, M-11, MIDDLE CIRCLE CONNAUGHT CIRCUS, NEW DELHI - 110001, INDIA |
B62879663 |
|
7 |
10388508 |
16/10/2012 |
1,000,000,000.00 |
YES BANK LIMITED |
NEHRU CENTRE, 9TH FLOOR, DISCOVERY OF INDIA, DR. A.B. ROAD, WORLI, MUMBAI, MAHARASHTRA - 400018, INDIA |
B62788906 |
|
8 |
10388413 |
04/10/2012 |
800,000,000.00 |
YES BANK LIMITED |
NEHRU CENTRE, 9TH FLOOR, DISCOVERY OF INDIA, DR. A.B. ROAD, WORLI, MUMBAI, MAHARASHTRA - 400018, INDIA |
B62756002 |
|
9 |
10378578 |
01/10/2012 |
250,000,000.00 |
ICICI BANK LIMITED |
LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJ |
B58928672 |
|
10 |
10345995 |
02/04/2012 |
500,000,000.00 |
DBS BANK LIMITED |
UPPER GROUND FLOOR, BIRLA TOWER, 25 BARAKHAMBA ROAD, NEW DELHI - 110001, INDIA |
B36469724 |
|
11 |
10344024 |
16/02/2012 |
1,800,000,000.00 |
JAMMU AND KASHMIR BANK LIMITED |
D-63, BASANT LOK, VASANT VIHAR, NEW DELHI |
B35750835 |
|
12 |
10334114 |
13/01/2012 |
450,000,000.00 |
INDIAN OVERSEAS BANK |
PARLIAMENT STREET BRANCH, 10,PARLIAMENT STREET, NEW DELHI - 110001, INDIA |
B31499809 |
|
13 |
10355748 |
05/01/2013 * |
250,000,000.00 |
STATE BANK OF BIKANER AND JAIPUR |
SPECIALISED COMMERCIAL BRANCH, 27, NEW DELHI HOUSE, BARAKHAMBA ROAD, NEW DELHI - 110001, INDIA |
B67417485 |
|
14 |
10310571 |
12/10/2011 |
2,810,000,000.00 |
STATE BANK OF PATIALA |
COMMERCIAL BRANCH, CHANDRALOK BUILDING, 36, JANPATH, NEW DELHI - 110001, INDIA |
B22705024 |
|
15 |
10309572 |
29/09/2011 |
600,000,000.00 |
ICICI BANK LIMITED |
LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJARAT - 390015, INDIA |
B22298814 |
|
16 |
10310879 |
20/09/2011 |
500,000,000.00 |
HDFC BANK LIMITED |
HDFC BANK HOUSE SENAPATI BAPAT MARG, LOWER PAREL W, MUMBAI, MAHARASHTRA - 400013, INDIA |
B22822654 |
|
17 |
10310716 |
29/03/2012 * |
500,000,000.00 |
AXIS BANK LIMITED |
SCO-29, SECTOR-14, GURGAON, HARYANA - 122001, INDIA |
B39980537 |
|
18 |
10257815 |
03/12/2010 |
350,000,000.00 |
AXIS BANK LIMITED |
SG 21 AND 22, DLF GALLERIA SHOPPING COMPLEX, DLF CITY, PHASE-IV, GURGAON, HARYANA - 122002, INDIA |
B01913367 |
|
19 |
10237002 |
23/08/2010 |
1,500,000,000.00 |
CANARA BANK |
PCB-II, WORLD TRADE TOWER, BARAKHAMBA LANE, NEW DELHI - 110001, INDIA |
A93643435 |
|
20 |
10181091 |
15/02/2010 * |
1,740,000,000.00 |
STATE BANK OF PATIALA (LEAD BANK) |
COMMERCIAL BRANCH, CHANDRALOK BUILDING, 2ND FLOOR, 36, JANPATH, NEW DELHI - 110001, INDIA |
A78671773 |
|
21 |
10172690 |
16/06/2010 * |
4,070,000,000.00 |
STATE BANK OF PATIALA (LEAD BANK) |
COMMERCIAL BRANCH, CHANDRALOK BUILDING, 36, JANPATH, NEW DELHI - 110001, INDIA |
A90253295 |
|
22 |
10147486 |
11/08/2009 * |
50,000,000.00 |
STANDARD CHARTERED BANK |
CREDIT RISK CONTROL, NARAIN MANZIL, 23 BARAKHAMBA ROAD, NEW DELHI - 110001, INDIA |
A69579977 |
|
23 |
10147481 |
11/08/2009 * |
416,000,000.00 |
STANDARD CHARTERED BANK |
CREDIT RISK CONTROL, NARAIN MANZIL, 23 BARAKHAMBA ROAD, NEW DELHI - 110001, INDIA |
A69580009 |
|
24 |
10064917 |
16/09/2010 * |
342,000,000.00 |
STATE BANK OF PATIALA |
COMMERCIAL BRANCH, CHANDRALOK BUILDING , 2ND FLOOR, 36 JANPATH, NEW DELHI - 110001, INDIA |
A94243870 |
|
25 |
10007457 |
30/01/2006 |
14,200,000.00 |
ICICI LIMITED |
C-15, BANDRA-KURLA COMPLEX, BANDRA (EAST), MUMBAI, MAHARASHTRA - 400051, INDIA |
A00121707 |
* Date of charge modification
UNSECURED LOANS
|
PARTICULAR |
31.03.2013 (Rs.
In Millions) |
31.03.2012 (Rs.
In Millions) |
|
LONG TERM
BORROWINGS |
|
|
|
Bonds and
debentures |
|
|
|
13.25%, 100 Non Convertible Debentures (previous year Nil) of Rs.10,00,000 each |
100.000 |
0.000 |
|
From banks |
320.000 |
0.000 |
|
From others |
306.300 |
121.910 |
|
Long term maturities of finance lease obligations |
49.420 |
97.050 |
|
|
|
|
|
SHORT TERM
BORROWINGS |
|
|
|
Commercial paper |
0.000 |
1050.000 |
|
From others |
234.000 |
0.000 |
|
Total |
1009.720 |
1268.960 |
CORPORATE INFORMATION
Providing School Learning Solutions (comprising of Smart
Class and Edureach (ICT) business), K-12 Schools (comprising preschools and high
schools), Higher Learning Solutions (comprising of vocational, higher education
and professional development) and Online, Supplemental and Global business
(comprising of internet based educational services and coaching).
OPERATING RESULTS AND
BUSINESS:
They enjoy long-term annuity relationships with both private schools as well as government customers, ranging from three to five years. Their revenues are predictable and locked in for three to five years on account of the contractual nature of their business.
In the SmartClass segment, they have added 2,171 new customers taking the total number of schools to 14,823 as on March 31, 2013.
In Edureach (formerly ICT) business segment, they have an ongoing partnership with thirteen state Governments and reaches to 10,771 Government schools in various states and 5.1 millions students as on March 31, 2013.
On Standalone basis Company’s total revenue stands at Rs. 8,204.040 millions as on March 31, 2013 as compared to Rs. 10,920.370 millions as on March 31, 2012, a decline of 24.87%. The loss before tax is Rs. 489.760 millions as on March 31, 2013 as against profit before tax of Rs. 2444.800 millions as on March 31, 2012.
On Consolidated basis Company’s total revenue stands at Rs.13,264.290 millions as on March 31, 2013 as compared to Rs.15,224.360 millions as on March 31, 2012, registering a decline of 12.87%. The loss before tax and after prior period items stands at Rs.1,532.940 millions as on March 31, 2013 as against profit of Rs.1,945.300 millions as on March 31, 2012.
SEGMENTAL PERFORMANCE
(STANDALONE):
The EBIT margins in the School learning solutions (SLS) Segment of the Company for the year amounted to Rs. 1,089.700 millions or 17.37% of SLS revenues as on March 31, 2013 as compared to Rs.4,275.390 millions or 40.81% of SLS revenues as on March 31, 2012.
The EBIT margins in the Higher learning solutions (HLS) segment of the Company for the year amounted to Rs. 10.340 millions or 11.11% of HLS revenues as on March 31, 2013 as compared to Rs.43.480 millions or 32.03% of HLS revenues as on March 31, 2012.
The EBIT margins in the K-12 Schools Segment of the Company for the year amounted to Rs.15.520 millions or 93.38% of K-12 segment revenues as on March 31, 2013 as compared to Rs. 13.810 millions or 97.85% of K-12 segment revenues as on March 31, 2012.
The EBIT margins in Online Supplemental and Global (OSG) segment of the Company for the year amounted to Rs. 15.230 millions or 1.61% of OSG segment revenues as on March 31, 2013 as compared to Rs.b(19.01) millions of OSG revenues as on March 31, 2012.
AWARDS, ACHIEVEMENTS
AND RECOGNITIONS:
In exploring the horizons of what learning can be, accolades and awards have come their way, awards which have reiterated their resolve to live their vision everyday and fulfill their mission.
Over the year, Educomp, its affiliates and it leadership has won recognition from several renowned institutions.
• PricewaterhouseCoopers (PwC) report (May 2013) ranked Educomp at number 85 amongst the top 100 software vendors in the emerging markets commanding combined revenue of $797 millions and among the 16 Indian companies that have made it to the list.
• Educomp ranked number 12 in Business World’s India’s fastest growing companies (May 2013 Issue).
• In Indian Education Awards 2013 Educomp won awards for, ‘Best K12 School Chain- National for The Millennium Schools’, ‘Innovation in Early Learning for Little Millennium’ and ‘Best Digital Content for Smartclass’.
• At Navikaran Awards ceremony on 30th January at ‘World Schools Resources Expo 2013’ Educomp was awarded as the “Corporate of the Year” and Shantanu Prakash, chairman and managing director, Educomp Solutions, was awarded “Entrepreneur of the Year”. The event was organized by Creative Children Media in partnership with Zee Business.
• On November, 2012, three Learning.com products were selected for the 2012 Tech and Learning Awards of Excellence. Learning. com Marketplace and Middle School STEM both won awards in the New Product category, and Aha! Math earned recognition as a Best Upgraded Product in the prestigious 30-year-old recognition program.
• Kavin Chander of Std X at PSBB Millennium was a winner at the National Indian Robot Olympiad on 30th of September.
• Educomp was ranked amongst India’s 40 fastest growing companies by Outlook Business in its 26-May-2012 issue. Shantanu Prakash was nominated for the highest honour -“Entrepreneur of the Year” Award for his exceptional vision in uplifting the education sector in India and bestowing it with much needed change at “Entrepreneur India Awards 2012” organized by Franchise India Holdings Limited on May 18, 2012.
• Educomp Solutions won three prestigious awards - “Best Education Company to work with,” “Best Innovative K 12 School” and “Best Education Webinar Series” at the Indian Education Awards (IEA) 2012 at a glittering ceremony on 28th April 2012.
MANAGEMENT DISCUSSION
AND ANALYSIS
FINANCIAL YEAR
2012-13 AT A GLANCE
From the beginning of FY13, the company has been in a phase of consolidation. They have been focusing their energies on operational efficiencies, strengthening their balance sheet, focusing on cash flows and launching new products and services through existing sales and distribution network.
From a start up to expansion, to diversification, to consolidation, the company has come around a whole circle. As the company approaches 20th anniversary next year, they are gearing up for next chapter of growth named “Educomp 2.0”.
Educomp 2.0 is their operating Bible which includes their six-point agenda to transform the company and take it to the next level. On one hand, Educomp 2.0 is focused on digital content and their intellectual property based offerings where they plan to take their innovative IP-based products across their presence in 14,500 schools and migrate from being a products company to a solutions company. And on the other hand, Educomp 2.0 is focused on their asset backed offerings that solve the access and capacity problems for India. This is the segment where they have their schools and colleges, where they have annuity style long-term cash flows with highly stable customer lock-ins.
First of their six point agenda is about Focus. The company is the leader company in almost all segments in which they operate but the focus will be on on their core competencies. They have already begun the process of exiting non-core businesses and during the year, the company profitably sold its stake in (a) Eurokids (largest pre nursery chain of schools in India) to a group of investors lead by GPE India and (b) IndiaCan (joint venture between Pearson and Educomp for vocational education) to Pearson. The company also diluted their majority stake in AuthorGen in favor of Bertelsmann (large German Media House) and Kaizen Private Equity who have invested primary capital to take the business forward. In addition to the above, they have also closed some of their loss making businesses during the year which should also help improve their operating performance in FY14. They would also like to highlight that they are actively pursuing divesting some of their other non core assets in test preparation space and are confident of completing the transactions during fiscal year 2013-14.
Secondly, Educomp 2.0 is about cautious growth. While they have grown rapidly over the last few years from a mere 300 schools in FY07 to over 14,500 schools, their operational backbone hasn’t kept pace with the growth. During the year, they focused on (a) acquiring the quality customer base in terms of profitability (as evident from 2171 schools added in FY13 as compared to 6114 schools added in FY12) and (b) building a backbone that can effectively service their customers. The company chose profitability over volume growth in FY13 resulting in (a) average ARPU during FY13 remaining stable in-spite of not providing resource coordinator to schools from Q4FY13, (b) significant increase in number of classrooms added per school from 6.5 in FY12 to 13.3 in Q4FY13 as part of strategy to cross sell and up sell to existing schools and (c) improvement in collection efficiency (amount collected in Q4FY13 was twice the amount collected in Q1FY13).
Thirdly, Educomp 2.0 is a solution company and not just a product company. While so far they have done well, focusing their energies on selling products like SmartClass to schools. However, with a base of over 14,500 schools and 6.9 millions students, they realized that through this network, they can reach out to over 16 millions parents across the country. The company has initiated leveraging this network through a wider portfolio of IP based products and solutions. They will cross sell, up sell additional products and solutions to a customer base using their existing sales and distribution network.
The forth focus area for them is balance sheet strengthening including correction of asset liability mismatch. Educomp has over the years, built high quality infrastructure in K-12 and Higher education segments, which involves significant capital investments. These businesses “generally” become cash flow positive in 5-7 years. Currently, their cash flow profile doesn’t match up with liabilities on accounts of loans taken for either for SmartClass hardware procurement or building K-12 or higher education campuses. The deteriorating credit environment added to the stress given limited availability of long term debt and hardening interest rates. Inspite of the strong headwinds during FY13, the company has been successful in reducing the capex by 50% which alongwith improvement in collections has resulted in reduction of net debt. While the net debt reduced marginally from Rs. 19,644.000 millions as at December 31, 2012 to Rs. 19,544.000 millions as at March 31, 2013, they consider these as green shoots for the concentrated efforts put in place during the year. The company would like to thank the lenders who have been extremely supportive of Educomp during this time.
In terms of their fifth focused item – Educomp 2.0 will be a leaner organization. They are working on streamlining their operations, integrating technology into the supply chain and servicing components to replace and optimize their existing cost structure. During the year, they have already undertaken specific measures in K-12 business wherein they have slashed down their corporate expenses by more than 50%. In addition, effective April 1, 2013, they have merged the sales and service organizations at zonal levels thereby increasing span of controls for both sales and the servicing teams. The leaner structure will result in lower operating cost, better customer engagement and it is more effective in the long-term. They now have 600 people across 600 districts in India. Last but not the least, as mentioned earlier, during FY13, the company decided to sell SmartClass product without resource coordinator. They are positively surprised by their customers who have supported this decision. This decision will help them optimize their headcount besides being accretive to the margins of SmartClass business.
As a last and very important priority Educomp 2.0 is a mix of experienced and new leadership. During the year, the Company hired senior professionals including Mr. Rakesh Sharma as Executive Director. He brings immense professional experience in Education sector and will surely be able to add significant value to Educomp.
COMPANY OUTLOOK AND
STRATEGY FOR FY 2014
As Robert Frost famously said-
“The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.”
Similar to what Robert Frost said years ago, the theme for FY14 remains Educomp 2.0 and driving the six point agenda which they initiated during FY13. They believe that the near term outlook in FY14 is mixed, considering liquidity constraints and a volatile market environment, despite strong business fundamentals. However, by leveraging (a) their extremely valuable IP based smart learning solutions and (b) an enviable customer reach of 34,500 schools and ~23 millions learners, over the mid-term, we remain confident of returning the business to a position of strength.
CORPORATE DEBT
RESTRUCTURING (CDR)
In order to correct the asset-liability duration mismatch, The Company has initiated discussions with its senior secured lenders and plans to restructure its debt under the Corporate Debt Restructuring (CDR) mechanism, including moratorium on principal and interest payments on term-debt. The debt-restructuring exercise will ensure better liquidity and enable the Company to focus and strengthen its core operations. They believe this will help us to safeguard the interests of their key stakeholders, including customers and vendors. Their senior lenders have shown support of their long-term business plans and are supportive of their efforts to achieve a sustainable debt structure.
About CDR
• The CDR mechanism, was launched in February, 2002 under the aegis of RBI, is a voluntary and non-statutory arrangement to ensure timely and transparent mechanism for restructuring the corporate debts of potentially viable entities, outside the preview of legal proceedings.
• Banks and FIs participating in CDR System became member and formed a self-empowered body, which lay down policies and guidelines, and monitors the process of the CDR. At present there are 56 members such as State Bank of India, Life Insurance Corporation of India, Bank of Baroda, Bank of India, ICICI Bank etc.
• CDR system is based on Debtors Creditor Agreement and Inter Creditor Agreement and this provide the legal basis to the CDR mechanism.
• Further, if 75 per cent of creditors by value and 60 per cent creditors by number agree to a restructuring package of an existing debt, the same would be binding on the remaining creditors.
• CDR considers all the preliminary reports for restructuring. However, the detailed package will be worked out with the help of Lead institution for the potentially viable companies.
SMARTCLASS –
RETURNING BACK TO BUILD OWN AND OPERATE MODEL
During FY13, the company was contemplating legal restructuring of their SmartClass business. The Board of Directors in their meeting in April 2013 had constituted a committee to evaluate various options, taking into account the financial legal and tax aspects of the proposed restructuring. Notwithstanding the final outcome of the evaluation exercise currently underway, the company has decided two significant changes effective April 1, 2013.
Firstly, they have decided to migrate to Build Own and Operate model for SmartClass revenue recognition. As a consequence; they would now be booking their revenue in 20 quarterly installments assuming it is a five year contract or in 12 quarterly installments assuming it is a three year contract. Secondly, Smartclass will now be a bilateral business. It will be a business directly between Educomp and the customer.
EDUREACH – FOCUS ON
CONTENT AND TRAINING BUSINESS
In their Govt. business, they will again focus on cautious growth by cherrypicking the govt. orders. They will channelize their efforts in content and training related govt. orders, which are the core competencies of Educomp. Further they will focused on maximizing the realization and margins for the existing projects in the Edureach business.
K-12 – ASSET LIGHT JV
MODEL AND DRIVING ENROLLMENTS IN EXISTING SCHOOLS
Their focus in K12 will be to drive the entire future growth through the Asset light JV model. Given the large number of their Greenfield schools now operational and becoming cash positive, they have established a successful proof-of-concept. They are now seeing significant traction in the JV model. Several JV partners are committing themselves to tie-ups where-in they will bring the physical assets (land and building) or capital, while they will provide management services to run the schools. Additionally, their focus will also be on driving enrolments and increasing
capacity utilization of exiting schools.
INDUSTRY STRUCTURE
AND DEVELOPMENT
MARKET OVERVIEW
India, today, is considered as a talent pool of the world, having qualified and educated human resources in abundance. India has the world’s largest population in the age bracket 5 to 24 years of about 450 million1. It also has around 500 million2 in the 25 to 59 age bracket which constitutes the working population and is expected to continuously increase even as the world’s working population ages and diminishes. This has been one of the primary reasons for transformation of India into one of the fastest growing economies in the world since liberalization in the 1990s.
As the economist Clark Kerr observed, “On a global scale, wealth and prosperity have become more dependent on the access to knowledge than the access to natural resources.”
Education is the key to unlocking and building lasting value in a robust economy. In order to meet this existing and emergent demand, there is huge need of investments in the Indian education sector. Exhibit below provides an overview of the current Indian educational infrastructure and the need gap.
FINANCIAL PERFORMANCE
Overview - Executive Summary
The financial performance of Educomp Solutions Limited (Educomp) as per Indian GAAP is discussed in two parts:
i. Educomp (Standalone), which excludes the performance of subsidiaries of Educomp.
Overview of the Financial performance summary (Standalone)
The total revenues of Educomp aggregated Rs. 8,204.000 millions in FY13 as compared to Rs. 10,920.000 millions in FY12.
In fiscal 2013, the Company’s profit/(loss) before taxes aggregated Rs. (473.000) millions as against Rs. 2,412.000 millions in fiscal 2012.
In fiscal 2013, the Company’s profit/(loss) after taxes aggregated Rs. (407.000) millions as against Rs. 1,889.000 millions in fiscal 2012.
In fiscal 2013, the Company’s earnings/(loss) per share (basic) is Rs. (3.61) as against Rs. 19.68 in fiscal 2012.
STANDALONE
STATEMENT OF ASSETS AND LIABILITIES
(Rs. In Millions)
|
|
Particular |
31.03.2014 |
|
A |
EQUITY AND
LIABILITIES |
|
|
1 |
Shareholders’
funds |
|
|
|
(a) Share capital |
244.882 |
|
|
(b) Reserves and surplus |
16520.393 |
|
|
(c) Money received against share warrants |
0.000 |
|
|
Sub-total
- Shareholders' funds |
16765.275 |
|
|
|
|
|
2 |
Share
application money pending allotment |
0.000 |
|
|
|
|
|
3 |
Non-current liabilities |
|
|
|
(a) Long-term borrowings |
17315.583 |
|
|
(b) Trade Payable |
24.037 |
|
|
(c) Deferred Tax Liabilities (Net) |
0.000 |
|
|
(d) Other long term liabilities |
104.974 |
|
|
(e) Long term provisions |
71.902 |
|
|
Sub-total
- Non-Current Liabilities |
17516.496 |
|
|
|
|
|
4 |
Current
liabilities |
|
|
|
(a) Short-term borrowings |
1965.826 |
|
|
(b) Trade payables |
1565.156 |
|
|
(c) Other current liabilities |
2060.768 |
|
|
(d) Short-term provision |
13.351 |
|
|
Sub-total - Current
Liabilities |
5605.101 |
|
|
TOTAL - EQUITY AND
LIABILITIES |
39886.872 |
|
|
|
|
|
B |
ASSETS |
|
|
1 |
Non-current
assets |
|
|
|
(a) Fixed assets |
1141.074 |
|
|
(b) Non-current investments |
16938.388 |
|
|
(c) Deferred tax assets (net) |
0.000 |
|
|
(d) Long-term loans and advances |
740.522 |
|
|
(e) Other non-current assets |
17.599 |
|
|
Sub-total
- Non-Current Assets |
18837.583 |
|
2 |
Current assets |
|
|
|
(a) Current Investments |
0.000 |
|
|
(b) Inventories |
566.279 |
|
|
(c) Trade receivables |
18468.311 |
|
|
(d) Cash and cash equivalents |
189.194 |
|
|
(e) Short-term loans and advances |
1801.792 |
|
|
(f) Other current assets |
23.713 |
|
|
Sub-total
- Current assets |
21049.289 |
|
|
TOTAL
- ASSETS |
39886.872 |
STATEMENT OF STANDALONE
AUDITED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED MARCH 31, 2014
PART I
(Rs. In Millions)
|
S. No. |
Particular |
Quarter Ended |
Year Ended |
|
|
|
Unaudited |
Audited |
||
|
|
March 31, 2014 |
December 31, 2013 |
March 31, 2014 |
|
|
1 |
Income from operations |
|
|
|
|
|
(a)
Net Sales / Income from operations |
473.166 |
399.343 |
2822.946 |
|
|
(b)
Other Operating Income |
0.000 |
0.000 |
0.000 |
|
|
Total
Income from operations (net) |
473.166 |
399.343 |
2822.946 |
|
2 |
Expenses |
|
|
|
|
|
Purchases
of stock-in-trade |
84.777 |
25.280 |
1076.924 |
|
|
(Increase)
/ Decrease in stock in trade and work in progress |
140.714 |
34.543 |
99.652 |
|
|
Employee
benefit expenses |
280.178 |
348.300 |
1424.167 |
|
|
Depreciation
and amortization expenses |
131.220 |
134.830 |
540.815 |
|
|
Other
expenses |
158.244 |
181.853 |
601.420 |
|
|
Provision
for doubtful trade receivable |
30.462 |
149.990 |
465.432 |
|
|
Foreign
exchange fluctuation (net) |
9.131 |
20.114 |
195.760 |
|
|
Total
Expenses |
834.726 |
894.910 |
4404.170 |
|
3 |
Profit/
(Loss) from operations before other income, finance costs and exceptional
Items (1-2) |
(361.560) |
(495.567) |
(1581.224) |
|
4 |
Other
income |
175.647 |
105.093 |
348.817 |
|
5 |
Profit/
(Loss) from ordinary activities before finance costs and exceptional Items
(3+4) |
(185.913) |
(390.474) |
(1232.407) |
|
6 |
finance
costs |
321.813 |
392.830 |
1469.873 |
|
7 |
Profit/ (Loss) from ordinary activities
after finance costs but before exceptional Items (5-6) |
(507.726) |
(783.304) |
(2702.283) |
|
8 |
Exceptional
Items / Prior period items |
611.800 |
-- |
617.008 |
|
9 |
Profit/ (Loss) from Oridinary
Activities before tax (7-8) |
(1119.526) |
(783.304) |
(3319.291) |
|
10 |
Tax
expense |
|
|
|
|
|
Current
tax including for earlier years (net) |
(328.604) |
-- |
(328.604) |
|
|
MAT
credit entitlement / reversal |
-- |
-- |
-- |
|
|
Deferred
tax |
301.852 |
(56.977) |
131.615 |
|
11 |
Net Profit/ (Loss) from Ordinary Activities after tax (9-10) |
(1092.774) |
(726.327) |
(3122.302) |
|
12 |
Extraordinary items (not of
tax expense) |
-- |
-- |
-- |
|
13 |
Net
Profit/ (Loss) for the year period (11-12) |
(1092.774) |
(726.327) |
(3122.302) |
|
14 |
Paid
up equity share capital (Face value of Rs.2/- per share) |
244.882 |
244.882 |
244.882 |
|
15 |
Reserves
excluding revaluation reserves |
-- |
-- |
16520.393 |
|
16 |
Earning/
(Loss) per share (EPS) (not
annualised) |
|
|
|
|
|
(a) Basic |
(8.92) |
(5.93) |
(25.50) |
|
|
(b) Diluted |
(8.92) |
(5.93) |
(25.50) |
|
17 |
Debt Equity Ratio |
1.18 |
-- |
1.18 |
|
18 |
Debt Service Coverage Ratio |
-- |
-- |
(0.52) |
|
19 |
Interst Servie Coverage Ratio |
-- |
-- |
(1.26) |
PART II
|
SELECT INFORMATION FOR THE FINANCIAL RESULTS AS AT MARCH 31,
2014 |
|||
|
Particular |
|
|
|
|
PARTICULAR OF SHAREHOLDINGS |
|
|
|
|
1
Public shareholding |
|
|
|
|
Number of shares |
67602823 |
67602823 |
67602823 |
|
Percentage of shareholding |
55.21% |
55.21% |
55.21% |
|
|
|
|
|
|
2
Promoters and Promoters group Shareholding- |
|
|
|
|
a)
Pledged /Encumbered |
|
|
|
|
Number
of shares |
28990855 |
28990855 |
28990855 |
|
Percentage
of shares (as a % of total shareholding of the promoter and promoter group) |
52.87% |
52.87% |
52.87% |
|
Percentage
of shares (as a % of total share capital of the company) |
23.68% |
23.68% |
23.68% |
|
|
|
|
|
|
b)
Non - Encumbered |
|
|
|
|
Number
of shares |
25847390 |
25847390 |
25847390 |
|
Percentage
of shares (as a % of total shareholding of the promoter and promoter group) |
47.13% |
47.13% |
47.13% |
|
Percentage
of shares (as a % of total share capital of the company) |
21.11% |
21.11% |
21.11% |
|
PARTICULARS |
3 MONTHS ENDED MARCH 31, 2014 |
|
B INVESTOR COMPLAINTS (Nos.) |
|
|
Pending at the beginning of the quarter |
-- |
|
Received during the quarter |
-- |
|
Disposed of during the quarter |
-- |
|
Remaining unresolved at the end of the quarter |
-- |
STANDALONE SEGMENT WISE
REVENUE, RESULTS AND CAPITAL EMPLOYED
(Rs. In Millions)
|
Particular |
Quarter Ended |
Year Ended |
|
|
Unaudited |
Audited |
||
|
March 31, 2014 |
December 31, 2013 |
March 31, 2014 |
|
|
SEGMENT REVENUE |
|
|
|
|
Higher
Learning Solutions |
26.740 |
33.381 |
76.271 |
|
School Learning Solutions |
384.088 |
346.112 |
2033.598 |
|
K-12
Schools |
0.125 |
0.000 |
7.076 |
|
Online
Supplements and Global |
62.213 |
19.850 |
706.001 |
|
Total Net Sales / Income From
Operations |
473.166 |
399.343 |
2822.946 |
|
|
|
|
|
|
SEGMENT RESULTS (PROFIT BEFORE
INTEREST AND TAX FROM EACH SEGMENTS) |
|
|
|
|
Higher
Learning Solutions |
18.269 |
23.410 |
38.734 |
|
School Learning Solutions |
(991.182) |
(391.811) |
(1698.626) |
|
K-12 Schools
|
0.125 |
(2.818) |
3.273 |
|
Online
Supplements and Global |
(18.185) |
(2.102) |
(15.888) |
|
Total |
(990.973) |
(373.321) |
(1672.507) |
|
Less:
Interest (Net)* |
233.613 |
392.830 |
1381.676 |
|
Other
Unallocable Expenses |
70.587 |
122.246 |
613.925 |
|
Unallocable Income |
175.647 |
105.093 |
348.817 |
|
Total Profit/ (Loss) Before
Tax |
(1119.526) |
(783.304) |
(3319.291) |
|
|
|
|
|
|
CAPITAL EMPLOYED |
|
|
|
|
Segment
Assets – Segment Liabilities |
|
|
|
|
Higher
Learning Solutions |
(88.718) |
(95.730) |
(88.718) |
|
School Learning Solutions |
18926.065 |
13621.942 |
18926.065 |
|
K-12
Schools |
(150.319) |
(192.403) |
(150.319) |
|
Online
Supplements and Global |
(374.577) |
(401.484) |
(374.577) |
|
Unallocated |
(1547.176) |
4839.553 |
(1547.176) |
|
Total |
16765.275 |
17771.878 |
16765.275 |
*
Excluding impact of exceptional items.
CONTINGENT
LIABILITIES:
|
PARTICULARS |
31.03.2013 (Rs.
In Millions) |
31.03.2012 (Rs.
In Millions) |
|
a. Corporate guarantee given to bank for secured loan to third party |
13194.910 |
12179.130 |
|
b. Corporate guarantee given to bank for secured loan and debenture to subsidiaries |
10442.180 |
11374.150 |
|
c. Guarantee against assignment of receivables with limited recourse option* |
1083.290 |
437.760 |
|
d. Other money for which the Company is contingently liable |
|
|
|
i. Taxes under adjudication/appeal |
39.430 |
41.590 |
|
ii. Premium on redemption of Zero Coupon Foreign Currency Convertible Bonds |
185.300 |
1649.760 |
|
Note: * The amount
related to credit facilities given by bank against trade receivables. |
||
FIXED ASSETS
v
Tangible
Assets
Land
(Freehold)
Building
Leasehold
Improvements
Office
Equipment
Office
Equipment-Finance Lease
Furniture
and Fixtures
Computers
and Accessories
Computers
and Accessories Finance Lease
Vehicles
v
Intangible Assets
Computer
Software
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l Anti-Money
Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.59.48 |
|
|
1 |
Rs.100.93 |
|
Euro |
1 |
Rs.80.71 |
INFORMATION DETAILS
|
Information
Gathered by : |
PLK |
|
|
|
|
Analysis Done by
: |
RAS |
|
|
|
|
Report Prepared
by : |
MRI |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
2 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
-- |
|
--LIQUIDITY |
1~10 |
2 |
|
--LEVERAGE |
1~10 |
2 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
2 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
20 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.