To,
The Members of
MT Educare Limited
Your Director's take pleasure in presenting the Seventeenth Annual
Report of the Company together with Audited Financial Statements for the year ended March
31, 2023.
In accordance with the applicable provisions of the Insolvency and
Bankruptcy Code 2016 ("IBC/Code"), the Corporate Insolvency Resolution Process
("CIRP") of MT Educare Limited ("Company") was initiated by Connect
Residuary Private Limited (CRPL) An Operational Creditor of the Company. The Operational
Creditor's petition to initiate the CIRP Process was admitted by the National Company
Law Tribunal ("NCLT"), Mumbai bench, on December 16, 2022 ("Insolvency
Commencement Date"). Mr. Ashwin Bhavanji Shah was appointed as the Interim Resolution
Professional ("IRP") to manage the affairsof the Company. Subsequently, Mr.
Vipin Choudhary, erstwhile Director of the Company had filed
National Company Law Appellate Tribunal (NCLAT), New Delhi challenging
the Order passed by Hon'ble NCLT, Mumbai Bench, accordingly Hon'ble NCLAT, New
Delhi stayed the formation of Committee of Creditors ("CoC") till the hearing or
Order to be passed by Hon'ble NCLAT, New Delhi. The Hon'ble NCLAT, New Delhi
after hearing the parties concerned on June 02, 2023 have now kept the matter
"Reserved for Orders".
FINANCIAL RESULTS
The Financial performance of your Company for the year ended March 31,
2023 is summarized below:
|
Standalone Year ended |
Consolidated Year
ended |
Particulars |
March 31, 2023 |
March 31, 2022 |
March 31, 2023 |
March 31, 2022 |
Revenue from Operations |
3,126.55 |
3,039.92 |
5,819.26 |
5,304.99 |
Other Income |
384.05 |
1,004.75 |
449.93 |
1,497.67 |
Total Income |
3,510.61 |
4,044.66 |
6,269.19 |
6,802.66 |
Total Expenses |
5,219.40 |
4,129.24 |
8,982.63 |
6,555.22 |
Operating Profit/(Loss) |
(1,708.79) |
(84.58) |
(2,713.44) |
247.44 |
Less: Finance Cost |
703.29 |
837.23 |
864.32 |
1,062.01 |
Less: Depreciation |
875.32 |
1,141.23 |
1,091.83 |
1,471.76 |
Profit/ (Loss) before Tax |
(3,287.40) |
(2,063.04) |
(4,669.59) |
(2,286.33) |
Tax expense (Earlier Year) |
- |
257.79 |
0.13 |
261.10 |
Deferred Tax Charge |
(275.45) |
195.64 |
(226.49) |
4.98 |
Profit/(Loss) after Tax for the year |
(4,858.89) |
(2,516.48) |
(6,070,76) |
(2,552.41) |
Other comprehensive income/(loss) |
1.24 |
5.67 |
0.12 |
10.04 |
Total Other Comprehensive
Income/ (Loss) for the year |
(4,857.64) |
(2,510.80) |
(6,070.64) |
(2,542.37) |
DIVIDEND
In view of the net loss incurred by the Company for the year and the
accumulated losses of the previous year, the board does not recommend any dividend to the
shareholders of the Company for the year ended March 31, 2023.
TRANSFER TO RESERVES:
In view of the losses incurred by the Company, no amount has been
transferred to reserves.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013 (the
Act'), in relation to the Audited Financial Statements for the Financial Year
2022-2023, your Directors confirm that: a) The Financial Statements of the Company -
comprising of the Balance Sheet as at March 31, 2023 and the
Statement of Profit & Loss for the year ended on that date, have
been prepared on a going concern basis following applicable accounting standards and that
no material departures have been made from the same; b) Accounting policies selected were
applied consistently and the judgments and estimates related to these financial statements
have been made on a prudent and reasonable basis, so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2023, and of the Profit & Loss of
the Company for the year ended on that date.
c) been taken for the Properand maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 2013, to safeguard the
assets of the Company and to prevent and detect fraud and other irregularities. d)
Requisite internal financial controls to be followed by the Company were laid down and
that such internal financial controls are adequate and operating effectively;
Proper systems have been devised to ensure compliance with the
provisions of all applicable laws and such systems are adequate and operating effectively.
PHYSICAL VERIFICATION OF FIXED ASSETS AND WRITE OFF
IRP has conducted physical verification of Fixed assets of the Company
and mismatch with Fixed Assets Register has been updated in records. There has been write
off to this effect in line with physical verification of Fixed Assets.
BUSINESS OVERVIEW
With the onset of pandemic, the last few years saw a meteoric rise of
the EdTech sector which included e-learning platforms, student engagement tools in the
classroom, skill development and continuous learning opportunities for higher education.
However, we saw a trend reversal with parents and students opting for physical classes and
the sector gradually transitioning towards the Phygital era. In parallel, the government
has also been active in advocating and implementing educational reforms, which is being
further accelerated through the widespread internet penetration.
In the current financial year, the Company has focused re-opening the
centres and transitioning from online to offline classes. A lot of time, effort and money
had been spent to restart physical business operations including the centre set up,
recruitment and training of teachers, etc. During the year, we say a year-on-year increase
in our students count which led to an improved cash inflow.
However, since the Company had several old liabilities to service, we
saw a net negative cash flow position in several months.
The Company hit a major business hurdle in the month of December when
NCLT admitted insolvency proceedings which temporarily impacted the business reputation
and smooth functioning of the business. However, immediate management intervention helped
improve the overall dynamics in the later months of the financial year.
In the recent months, management has been focusing on strengthening its
foothold by improving the infrastructure, visibility, employee morale and student
satisfaction. Recent academic results where more than 1000 students have scored over 90%
marks validates the confidence in our curriculum and pedagogy which is being further
refined and upgraded to remain way ahead of competition. The focus will continue to make
MT Educare the go to place to cater to all academic needs of children between 8th
and 12th standard and continue to build trust and confidencewithin the parent
community.
FINANCIAL PERFORMANCE:
The company has registered total Standalone Revenue of
` 3,511 Lakhs in FY23 compared to ` 4,045 Lakhs in FY22 because
previously there were Income on account of liability written back while during the current
year liability written back is negligible during the year under review, however the
Company has slightly moved upward in terms of revenue from main operation of the company.
Finance costs have decreased by ` 134 lakhs mainly on account of non-recognition of
interest expense on disputed loans and reduction in interest on leased assets under IND-AS
116. Accordingly, operating EBITDA stood at ` (1,708.79) Lakhs in FY23, compared to `
(84.58) Lakhs in FY22. Profit
Before Tax stood at ` (3,287.40) Lakhs in FY23, compared to `
(2,063.04) Lakhs in FY22. Profit After Tax stood at
` (4,858.89) Lakhs in FY23, compared to ` (2,516.48) Lakhs in FY22.
Further, the company has registered total Consolidated Revenue of `
6,269 Lakhs in FY23, compared to ` 6,803 Lakhs in FY22 mainly because previously there
were Income on account of liability written back while during the current year liability
written back is negligible during the year under review. Finance costs for the year FY 23
stood at ` 864.32 lakhs as against ` 1,062 lakhs in FY 22, the reduction is mainly on
account of non-recognition of interest expense on disputed loans and reduction in interest
on leased assets under IND-AS 116. Accordingly, Operating EBITDA stood at ` (2,713.45)
Lakhs in FY23, compared to ` 247.44
Lakhs in FY22. Profit Before Tax stood at` (4,669.59) Lakhs in FY23,
compared to ` (2,286.33) Lakhs in FY22. Profit
After Tax stood at ` (6,070,76) Lakhs in FY23, compared to
` (2,552.41) Lakhs in FY22.
CAPITAL STRUCTURE
During the year under review, there have been no change in the Share
Capital of the Company, accordingly as at 31st March, 2023 the Equity Capital
Structure stand as follows: The Authorised Share Capital of the Company is
` 80,00,00,000/- (Rupees Eighty Crores Only) divided in to 8,00,00,000
(Eight Crores) Equity Shares of ` 10/- (Rupees Ten) each.
The paid-up Equity Share Capital of the Company is
` 72,22,80,540/- (Rupees Seventy Two Crores Twenty Two Lakhs Eighty
Thousand Five Hundred Forty Only) divided in to 7,22,28,054 (Seven Crores Twenty Two Lakhs
twenty
Eight Thousand fifty four) Equity Shares of` 10/- (Rupees Ten) each.
Material changes post closure of financial year:
The Hon'ble NCLAT, New Delhi after hearing the parties concerned
on June 02, 2023 have now kept the matter "pronouncement for Orders".
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
During the year under review, the Corporate Insolvency Resolution
Process ("CIRP PROCESS") of MT Educare Limited ("Company") was
initiated by Connect Residuary Private Limited (CRPL) An Operational Creditor of the
Company. The Operational Creditor's petition to initiate the CIRP Process was
admitted by the National Company Law Tribunal ("NCLT"), Mumbai bench, on
December 16, 2022 ("Insolvency Commencement Date").
EMPLOYEES STOCK OPTION SCHEME
The Company implemented the Employee Stock Options Scheme "ESOP
2016" and "MT EDUCARE LTD ESOP 2018" in accordance with the Securities and
Exchange Board of
India (Share Based Employee Benefits) Regulations, 2014.
In accordance with ESOP 2016, Out of 8,00,000 options, only
7,38,450optionsweregrantedasanofferto exercise by the eligible employee, however only
4,43,070 were exercised by the eligible employees till December 18th, 2018.
Rest of the Options were not yet exercised. During the current financial year, no options
were vested.
SUBSIDIARY COMPANY
As at March 31, 2023, your company continued to be Holding Company of
seven subsidiaries, namely, MT Education Services Private Limited, Lakshya Forrum for
Competitions Private Limited, Chitale's Personalised Learning Private Limited, Sri
Gayatri Educational Services Private Limited, Robomate Edutech Private Limited, Letspaper
Technologies Private Limited and Labh Ventures India Private Limited. The Company does not
have any associate or joint venture companies. Further, the Impairment of the entire
Investment in Subsidiaries has been made in respect of MT Education Services Private
Limited, Chitale's Personalised Learning Private Limited, Sri Gayatri Educational
Services Private Limited, Robomate Edutech Private Limited, Letspaper Technologies Private
Limited and Labh issued by the Statutory Auditors of theVentures India Private Limited.
Pursuant to the provisions of Section 129 and 134 of the Act read with rules framed there
under and Regulation 33 of the SEBI Listing Regulations, your Company has prepared
Consolidated Financial Statements of the Company and its subsidiaries and a separate
statement containing the salient features of financial statement of subsidiaries, joint
ventures and associates in Form AOC-1 which forms part of this Annual Report.
In accordance with Indian is contained Accounting in this
AnnualStandard (IND-AS) - 110 Consolidated Financial Statements read with Indian
Accounting Standard (IND-AS) - 28 Accounting for Investments in Associates, and Indian
Accounting Standard - 111 Financial Reporting of Interests in Joint Ventures, the audited
Consolidated Financial Statements are provided in and forms part of this Annual Report as
per (IND-AS) format.
In accordance with the provisions of Section 136 of the Companies Act,
2013 and the amendments thereto, read with SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (SEBI Listing Regulations'), the audited
financial statements including the consolidated financial statements and related
information of the Company and audited accounts of each of the subsidiaries are available
on the website of the Company www.mteducare.com. These documents will also be available
for inspection during business hours at the Registered Office of the Company
Pursuant to Section 134 of the Act read with Rule 8(1) of the Companies
(Accounts) Rules, 2014, the details of performance of subsidiaries and joint ventures of
the Company are as under: Lakshya Forrum for Competitions Private Limited (Lakshya) and
Labh Ventures India Private Limited (Labh) continued to be Material Subsidiary of the
Company during the under review. Lakshya's Revenue from operations had been reduced
during the year under review and stood at
` 2764.75 Lakhs as against ` 2476.80 Lakhs for the previous year
registering a Slight Increase of around 11.63% and earned Profit after tax` (784.02) Lakhs
in the current year as compared to profit after tax of` (224.62) Lakhs in the previous
year.
Labh's Revenue from operations during the year under review stood
at ` 802.62 Lakhs as against ` 804.29 Lakhs for the previous year and earned Profit after
tax which was reduced from ` 15.28 Lakhs in the previous year to profit of` 6.51 Lakhs in
the current year due to increase in Finance Cost.
Rest of the Subsidiaries had not earned any revenue from the operation
during the year under review.
CORPORATE GOVERNANCE & POLICIES
Your Company is in compliance with the Corporate Governance
requirements mentioned in Listing Regulations. In terms of Schedule V of Listing
Regulations, a detailed report on Corporate Governance along with Compliance
Certificate is attached and forms an integral part of this Annual
Report. All Board members and senior management personnel (as at 31st March,
2023) have affirmed compliance with the
Code of Conduct for the year 2022-23. A declaration to this effect
signed by the Erstwhile Non-Executive Director of the company is contained in this Annual
Report. The Erstwhile
Non-Executive Director have certified to the Board with regard to the
financial statements and other matters as required under Regulation 17(8) of the Listing
Regulations and the said certificate.
Management Discussion and Analysis Report as per Listing Regulations
are presented in separate sections forming part of the Annual Report.
In compliance with the requirements of Section 178 of the Companies
Act, 2013, the Nomination & Remuneration Committee of your Board had fixed various
criteria for nominating a person on the Board which inter alia include desired size and
composition of the Board, age limits, qualification / experience, areas of expertise and
independence of individual. Your Company has also adopted a Remuneration Policy, salient
features where of is annexed to this report.
In compliance with the requirements of Companies Act, 2013 and Listing
Regulations, your Board has approved various Policies including Code of Conduct for
Directors & Senior Management, Material Subsidiary Policy, Insider Trading Code,
Document Preservation Policy, Material Event Determination and Disclosure Policy, Fair
Disclosure Policy, Whistle Blower and Vigil Mechanism Policy, Related Party Transaction
Policy and Remuneration Policy. All these policies and codes have been uploaded on
Company's corporate website www.mteducare.com. Additionally, Directors
Familiarisation Programme and Terms and Conditions for appointment of Independent
Directors can be viewed on Company's corporate website www. mteducare.com.
CORPORATE SOCIAL RESPONSIBILITY
The brief details of the CSR Committee are provided in the Corporate
Governance Report, which forms part of this Annual Report. The CSR policy is available on
the website of your Company at
https://mteducare.com/mt-educare-admin/public/storage//1670327107corp.pdf.
As on April 01, 2022 the Corporate Social Responsibility Committee
comprised of Dr. Dattatraya Kelkar, Independent Director as Chairman, Mr. Roshanlal
Kamboj, Independent Director, Ms. Nanette D'sa, Independent Director and Mr. Surender
Singh, Non-Executive Director as members of the Committee.
As at March 31, 2023, there was no change in the constitution of the
Corporate Social Responsibility Committee, Accordingly, in compliance with requirements of
Section 135 read with Schedule VII of the Companies Act, 2013, the Corporate Social
Responsibility Committee comprises of Dr. Dattatraya Kelkar, Independent Director as
Chairman, Mr. Roshan Lal Kamboj, Independent Director, Ms. Nanette D'sa, Independent
Director and Mr. Surender Singh, Non-Executive Director as members of the Committee.
During the year under review, Corporate Social Responsibility Committee
met at the Meeting of IRP named Corporate Social Responsibility committee meeting which
has been conducted on February 06th, 2023 to review the CSR Applicability and
to review various CSR projects, expenditure on the same (if any) during the year as well
as quarter ended 31st December, 2022 wherein the Directors were also present.
The said Committee has been entrusted with the responsibility of
formulating and recommending to the Board, a Corporate Social Responsibility Policy
indicating the activities to be undertaken by the Company, monitoring the implementation
of the framework of the CSR Policy and recommending the amount to be spent on CSR
activities. As part of its initiative under the Corporate Social Responsibility ('CSR'),
our aim is not only to help students to pursue a dignified life but also to think about
the social and economic development of the communities in which we operate. Our approach
to CSR is built on creating sustainable programs that actively contribute and support the
social and economic development of the communities in which we operate. CSR for MT Educare
Limited is beyond its own immediate business interests to make positive difference. At MT
Educare Limited we are:
1) Committed to promoting the principle of inclusive growth and
equitable development.
2) Committed to carry out our business activities respecting the
cultures and practices of each region we operate in and proactively engage in activities
that contribute to society as a good corporate citizen.
3) Committed to invest in our community development by empowering women
and children (especially girl child) by providing respective skills and education.
4) Committed to engage and work actively in areas of promoting
education and providing healthcare.
The Report on CSR Activities as required under Companies (Corporate
Social Responsibility Policy) Rules, 2014 is set out as Annexure 2 forming part of this
Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Hon'ble NCLT vide order dated December 16, 2022 had initiated
the CIRP Proceedings against the Company and pursuant to Section 9 of the IBC, the powers
of the Board of Directors of the Company stood suspended, and such powers are vested with
the Interim Resolution Professional, Mr. Ashwin B. Shah. However, the details of Director
and Key Managerial Personnel (KMP) and Changes therein during the year under review is as
under: Mr. Parag Ola, as Executive Whole Time Director of the Company resigned w.e.f 24th
January, 2023. Further Mr. Siddhartha Haldar, who was appointed as a Chief
Financial Officer of the Company w.e.f 7th December, 2021
had resigned as Chief Financial Officer cum KMP of the Company w.e.f 7th
November, 2022. Further,
Mr. Nirav Parekh was appointed as Chief Financial Officer of the
Company w.e.f November 08th, 2022, and further, he resigned as Chief Financial
Officer cum KMP of the
Company w.e.f 13th February, 2023. Due to on going CIRP
process and Non-Constitution of Committee of Creditors, the vacancy in Key Managerial
Personnel (KMP) arising out of resignation has not been filled up.
Mr. Surender Singh, Non-Executive Non Independent Director and
Chairman, Mr. Vipin Choudhary, Non-Executive Non Independent Director, Mr. Roshan Lal
Kamboj, Non-Executive Independent Director, Dr. Dattatraya Kelkar, Non-Executive
Independent Director, Mrs. Nanette D'sa, Non-Executive Independent Director and Mr.
Karunn Kandoi, Non-Executive Independent Director continued to be on the Board of the
Company During the year under review. There are currently 6 (Six) Directors, including Two
Non-Executive Non-Independent, and Four Non-Executive Independent Directors to provide
their declarations both at the time of appointment and annually confirming that they meet
the criteria of independence as prescribed under Companies Act, 2013 and Listing
Regulations wherever applicable. During FY 2022-2023, your Board met 4 (Four) times
(Including IRP Meeting) details of which are available in Corporate Governance Report
annexed to this report. Changes in the Key Managerial Personnel (KMP) during the year:
Name of the KMP |
Appointment /
Resignation/ No change |
With effect from |
Mr. Parag Ola |
Resigned as WTD |
January 24th, 2023 |
Mr. Siddhartha Haldar Officer
Financial |
Resigned as Chief |
November 7th,
2022. |
Mr. Nirav Parekh |
Appointed as Chief Financial
Officer |
November 8th, 2022 |
Mr. Nirav Parekh |
Resigned as Chief Financial
Officer |
February 13th,
2023 |
Mr. Ravindra Mishra |
No Change |
November 15th,
2019. |
The information as required to be disclosed under the Listing
Regulations in case of re-appointment of the director (if any) is provided in Report on
Corporate Governance annexed to this report and in the notice of the ensuing Annual
General Meeting.
The disclosure in pursuance of Schedule V to the Companies Act, 2013
and SEBI Listing Regulation pertaining to the remuneration, incentives etc. to the
Directors is given in the Corporate Governance Report.
The outcome of the CIRP may result in change in the Board of Directors
of the Company followed by reconstitution of the statutory committees of the Board of
Directors of the Company. In accordance with the provisions of the Companies Act, 2013
(Act').
BOARD EVALUATION
In view of the fact that the Company continued to be under CIRP during
the year under review and since the powers of the Board of Directors being suspended and
management is vested with Mr. Ashwin B. Shah, the Interim Resolution Professional for
carrying out the day to day operations of the Company, the evaluation of the Board,
Committees and Directors could not be done. satisfies the criteria specified in Section
141 of BOARD COMMITTEES
In compliance with the requirements of Companies Act, 2013 and Listing
Regulations, your Board had constituted various Board Committees including Audit
Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee
and Corporate Social Responsibility Committee. Details of the constitution of these
Committees, which are in accordance with regulatory requirements, have been uploaded on
the website of the Company viz. www.mteducare.com. Details of scope, constitution, terms
of reference, number of meetings held during the year under review along with attendance
of Committee Members therein form part of the Corporate Governance Report annexed to this
report. However, due to CIRP process, the powers of the Committee members were suspended
and power are vested with Mr. Ashwin B. Shah, the Interim resolution professional.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have submitted the requisite
declarations confirming that they meet the criteria of independence as prescribed under
Section 149(6) of the Act read with Regulation 16 and 25(8) of the SEBI Listing
Regulations. The Independent Directors have also confirmed that they have complied with
Schedule IV of the Act and the Company's Code of Conduct.
They have further confirmed that they are not aware of any circumstance
or situation which exists or may be reasonably anticipated that could impair or impact
their ability to discharge their duties and that they are independent of the management.
Further, the Independent Directors have also submitted their declaration in compliance
with the provision of Rule 6(3) of the Companies (Appointment and
Qualificationof Directors) Rules, 2014, which mandated the inclusion of
an Independent Director's name in the data bank of the Indian Institute of Corporate
Affairs (IICA') for a period of one year or five to hold the office of an
independent director. All the
Independent Directors (wherever applicable) had passed the Online
Proficiency by IICA.
In the opinion of the Board, all the independent directors have
integrity, expertise and experience.
AUDITORS
The Statutory Auditors M/s. MGB & Co. LLP, Chartered Accountants,
having (Firm Registration No. 101169W/W-100035) was appointed at the fourteenth Annual
General Meeting (AGM') of the Company held on December 24th, 2020.
Accordingly, M/s. MGB & Co. LLP, Chartered Accountants shall hold office from the
conclusion of fourteenth Annual General Meeting (AGM') for a term of
consecutive five years till conclusion of Nineteenth Annual
General Meeting (AGM').
Your Company has received confirmation from the
Auditors to the effect that their appointment is within the limits
specified under the Companies Act, 2013 and the firm
Companies Act, 2013 read with Rule 4 of the Companies (Audit &
Auditors) Rules, 2014. In accordance with Section
139 of the Companies Amendment Act, 2017, notified w.e.f May 7, 2018,
by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not
required to be ratified at every Annual General Meeting. Hence,
M/s. MGB & Co. LLP shall continue as Statutory Auditors for the
remaining period of the term until the conclusion of Nineteenth Annual General Meeting of
the Company.
The Notes on Financial Statements referred to in the Auditors'
Report are self-explanatory and do not call for any further comments, some of the
Qualifications shared by Auditor is as under (Standalone as well as Consolidated):
Standalone:
1) The Company has recognized net deferred tax assets of
` 6,894.29 lakhs considering would be available in future years
against which deferred tax asset can be utilized. In our opinion, due to losses during the
year and earlier years and pendency of
CIRP, it is uncertain that the Company would achieve sufficient taxable
income in the future against which deferred tax assets can be utilized. Accordingly, we
are unable to obtain sufficient appropriate audit evidence to corroborate the
Management's / IRP's assessment of recognition of deferred tax assets as at 31
March 2023. Had the deferred tax asset not been recognized, the net loss for the year
ended 31 March 2023 would have been higher by ` 6,894.29 lakhs and Net worth of the
Company as at 31 March 2023 would have been lower by ` 6,894.29 lakhs. Our opinion
on the statement for the year ended 31
March 2022 was also modified in respect of this matter.
Reply: Pursuant to an application filed by Connect
Residuary Private Limited before the National Company Law Tribunal,
Mumbai Bench ("NCLT") in terms of Section 9 of the Insolvency and Bankruptcy
Code, 2016 read with the rules and regulations framed thereunder ("Code"), the
NCLT had admitted the application and ordered the commencement of corporate insolvency
resolution process ("CIRP") of MT Educare Limited ("Corporate Debtor",
"the Company") vide its order dated 16 December, 2022. The NCLT had appointed
Mr. Ashwin B. Shah as the interim resolution professional for the Corporate Debtor vide
its order dated 16 December, 2022. Interim
Resolution Professional took charge of the of the corporate debtor on
23rd December, 2022. Director Mr. Vipin Choudhry challenged the order of
Hon'ble NCLT dated 16-12-2022 before Hon'ble NCLAT, New Delhi. The Hon'ble
National Company Law Appellate Tribunal ("NCLAT") by an order dated January 6,
2023 had ordered to hold the formation of COC till further hearing i.e till 21st
February, 2023. There has been continuation of stay on Constitution of COC by Hon'ble
NCLAT from time to time till 26th May, 2023 and accordingly the COC is not yet
formed. The Business operation of the Corporate Debtor is continued as going concern. In
accordance with IBC Objective, the IRP is required to ensure that business operation of
the Corporate Debtor are continued as going concern as far as possible to maximise the
value of the Corporate Debtor. Since the constitution of COC is not yet formed, IRP has
continued the business as Going Concern.
2) The Company has outstanding loans, trade receivables and other
receivables of ` 4,933.07 Lakhs as at 31
March 2023, which are overdue / rescheduled. The management / IRP
envisages the same to be good and recoverable. However, owing to the aforementioned
overdues / reschedulement, we are unable to comment upon adjustments, if any, that may be
required to the carrying value of the aforesaid outstanding receivables and the
consequential impact on the accompanying standalone financial statements. Our Opinion on
the income
Statement for the year ended 31 March 2022 was also modified in respect
of this matter.
Reply: The management is of the opinion that the parties are facing
difficulties in ramping the business which has resulted in deferment of recovery process
beyond what has been envisaged. We anticipate progress in business in the coming quarters
which will enable recovery of the receivables in an orderly manner. At this present
juncture, the management considers the outstanding dues to be good and recoverable.
3) We draw attention to Note 1 of the standalone financial statements
regarding admission of the Company into Corporate Insolvency Resolution Process
("CIRP") and pending determination of obligations and liabilities with regard to
various claims submitted by the operational / financial/ other creditors and employees
including claims for guarantee obligation and interest payable on loans, we are unable to
comment on adjustments, if any, pending reconciliation and determination of final
obligation.
Reply: The Claim submission and upgradation till finalisation of
resolution plan is dynamic process and subject to approval of Committee of Creditors
(COC's). The Constitution of COC is stayed by Hon'ble NCLAT till 26th
May, 2023.
4) The Company has not provided for interest on borrowings of ` 100.17
lakhs on outstanding borrowings calculated based on the basic rate of interest as per the
terms of the loan post initiation of Corporate Insolvency Resolution Process (CIRP) with
effect from 16 December 2022 under Section
14 of Insolvency and Bankruptcy Code, 2016 (IBC'). The
Company has also not provided for interest on borrowings pre initiation of CIRP of `
751.26 lakhs based on the claims admitted. Had the interest expense excluding penal
interest, if any, been recognised, the net loss for the year ended 31 March 2023 would
have been higher by ` 851.44 lakhs excluding penal interest, if any, and the Net worth of
the Company would have been lower by ` 851.44 lakhs as at 31 March 2023. Non provision of
interest is not in compliance with Ind AS 23 "Borrowing Costs". Our Opinion on
the Statement for the year ended 31 March 2022 was also modified in respect of this
matter.
Reply: The Secured creditors have submitted their claims with IRP for
the dues till 16th December, 2022. The Impact recording of Interest liability
till
16th December 2022 shall be subject to outcome of CIRP
proceedings. However, Interest liability post 16th December, 2022 can not be
recognised as claim shall be submitted by Creditor for dues including Interest as of 16th
December, 2022.
5) confirmation Wehavenotreceivedbankstatementand of balance for the
balances lying in current accounts of
` 6.99lakhs.Intheabsenceofsufficient appropriate audit evidence, we are
unable to determine any possible impact thereof on the loss for the year ended 31 March
2023 and on the carrying value of cash and cash equivalents.
Reply: These are old and non-operative bank accounts wherein there
no transactions during the year and which will not have any material impact.
6) In the absence of comprehensive review of carrying amount of certain
assets (loans and advances, balances with government authorities, deposits, trade and
other receivables) and liabilities, we are unable to comment upon adjustments, if any,
that may be required to the carrying amount of such assets and liabilities and
consequential impact, if any, on the reported losses for the year ended 31 March 2023.
Non-determination of fair value of financial assets and liabilities are
not in compliance with Ind AS 109 "Financial Instruments" and Ind AS 37
"Provisions, Contingent Liabilities and Contingent Assets".
Reply: The Company had made excess provision in the earlier years
and adjustments of provision to various loans and advances, balances with government
authorities, deposits, trade and other receivables shall be subject to approval of
COC's which is not yet constituted. Further deposit with Government Authorities in
respect of disputed matter is subject to outcome of dispute.
Consolidated:
1) The Group has recognized net deferred tax assets of
` 7,548.55lakhsconsideringsufficienttaxable income would be available
in future years against which such deferred tax assets can be utilized. In our opinion,
due to losses during the year and earlier years and pendency of CIRP, it is uncertain that
the Group would achieve sufficient taxable income in future against which deferred tax
assets can be utilized. Accordingly, sufficient weareunabletoobtain appropriate audit
evidence to corroborate the Management's / IRP's assessment of recognition of
deferred tax assets as at 31 March 2023. Had the deferred tax assets not been recognized,
the net loss for the year ended 31 March 2023 would have been higher by ` 7,548.55 lakhs
and Net worth of the Group as at 31 March 2023 would have been lower by ` 7,548.55 lakhs.
Our Opinion on the Statement for the year ended 31 March 2022 was also modified in respect
of this matter.
Reply: Pursuant to an application filed by Connect
Residuary Private Limited before the National Company Law Tribunal,
Mumbai Bench ("NCLT") in terms of Section 9 of the Insolvency and Bankruptcy
Code, 2016 read with the rules and regulations framed thereunder ("Code"), the
NCLT had admitted the application and ordered the commencement of corporate insolvency
resolution process ("CIRP") of MT Educare Limited ("Corporate Debtor",
"the Company") vide its order dated December 16, 2022. The NCLT had appointed
Mr. Ashwin B. Shah as the interim resolution professional for the Corporate Debtor vide
its order dated December 16, 2022. Interim
Resolution Professional took charge of the of the corporate debtor on
23rd December, 2022. Director Mr. Vipin Choudhry challenged the order of
Hon'ble NCLT dated 16-12-2022 before Hon'ble NCLAT, New Delhi. The Hon'ble
National Company Law Appellate Tribunal ("NCLAT") by an order dated January 6,
2023 had ordered to hold the formation of COC till further hearing i.e till 21st
February, 2023. There has been continuation of stay on Constitution of COC by Hon'ble
NCLAT from time to time till 26th May, 2023 and accordingly the COC is not yet
formed.
The Business operation of the Corporate Debtor is continued as going
concern. In accordance with IBC Objective, the IRP is required to ensure that business
operation of the Corporate Debtor are continued as going concern as far as possible to
maximise the value of the Corporate Debtor. Since the constitution of COC is not yet
formed, IRP has continued the business as Going Concern.
2) The Group has outstanding loans, trade receivables and other
receivables of ` 10,885.26 Lakhs as at 31 March 2023, which are overdue / rescheduled. The
management / IRP envisages the same to be good and recoverable. However, owing to the
aforementioned overdues / reschedulement, we are unable to comment upon adjustments, if
any, that may be required to the carrying value of aforesaid outstanding receivables, and
the consequential impact on the accompanying consolidated annual financial statement. Our
Opinion on the Statement for the year ended 31 March 2022 was also modified in respect of
this matter.
Reply: The management is of the opinion that the parties are facing
difficulties in ramping the business which has resulted in deferment of recovery process
beyond what has been envisaged. We anticipate progress in business in the coming quarters
which will enable recovery of the receivables in an orderly manner. At this present
juncture, the management considers the outstanding dues to be good and recoverable.
3) We draw attention to Note No 1 of the consolidated annual financial
the Holding Company into Corporate Insolvency
Resolution Process ("CIRP") and pending determination of
obligations and liabilities with regard to various claims submitted by the operational /
financial other creditors and employees including claims for guarantee obligation and
interest payable on loans, we are unable to comment on adjustments, if any, pending
reconciliation and determination of final obligation.
Reply: The Claim submission and upgradation till finalisation of
resolution plan is dynamic process and subject to approval of Committee of Creditors
(COC's). The Constitution of COC is stayed by Hon'ble NCLAT till 26th
May, 2023.
4) The Group has not provided for interest on borrowings of ` 1,200.63
lakhs excluding penal interest, if any, on outstanding borrowings. Had the interest
expenses been recognised, the net loss for the year ended 31 March 2023 would have been
higher by ` 1,200.63 lakhs and the Net worth of the Group would have been lower by `
1,200.63 lakhs as at 31 March 2023. Non provision of interest is not in compliance with
Ind AS 23 "Borrowing Costs". Our Opinion on the Statement for the year ended 31
March 2022 was also modified in respect of this matter.
Reply: In respect of MT Educare Limited (Holding Company) the
Secured creditors have submitted their claims with IRP for the dues till 16th
December, 2022. The Impact recording of Interest liability till 16th December
2022 shall be subject to outcome of CIRP proceedings of the Holding Company. However,
Interest liability post 16th December, 2022 can not be recognised as claim
shall be submitted by Creditor for dues including Interest as of 16th December,
2022. And in respect of other entities being subsidiary companies the similar treatment is
continued.
5) confirmation Wehavenotreceivedbankstatementand of balance for the
balances lying in current accounts of
` 12.96lakhs.Intheabsenceofsufficientappropriate audit evidence, we are
unable to determine any possible impact thereof on the loss for the year ended 31 March
2023 and on the carrying value of cash and cash equivalents.
Reply: These are old and non-operative bank accounts wherein there
no transactions during the year and which will not have any material impact.
6) In the absence of comprehensive review of carrying amount of certain
assets (loans and advances, balances with government authorities, deposits, trade and
other receivables) and liabilities, we are unable to comment upon adjustments, if any,
that may be required to the carrying amount of such assets and liabilities and
consequential impact, if any, on the reported losses for the year ended 31 March 2023.
Non-determination of fair value of financial assets and liabilities are
not in compliance with Ind AS 109 "Financial Instruments" and Ind AS 37
"Provisions, Contingent Liabilities and Contingent Assets".
Reply: The Company had made excess provision in the earlier years
and adjustments of provision to various loans and advances, balances with government
authorities, deposits, trade and other receivables shall be subject to approval of
COC's which is not yet constituted. Further deposit with Government Authorities in
respect of disputed matter is subject to outcome of dispute.
COST AUDITOR
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Rules, amended rules, 2014, the cost audit records
maintained by the Company in respect of its education services, other than such similar
services falling under philanthropy or as part of social spend which do not form part of
any business is required to be Audited.
Your IRP had appointed M/s Joshi Apte & Associates, Cost
Accountants (Firm Registration No 00240) for conduct of audit of the cost records of the
Company for the financial year 2023-24.
SECRETARIAL AUDITOR
During the year, Secretarial Audit was carried out by M/s. Shravan A.
Gupta & Associates, Company Secretaries, Mumbai in compliance with Section 204 of the
Companies Act, 2013.
The Company had already taken such steps to ensure the Compliance with
related regulations and accordingly informed the Exchanges from time to time. The
observations and comments given by the Secretarial Auditor in their report are
self-explanatory and hence do not call for any further comments under section 134 of the
act.
The reports of Statutory Auditor, Secretarial Auditor forms part of
this Annual report. During the year the Statutory Auditors had not reported any matter
under Section 143 (12) of the Act.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the year, your Company transferred the unclaimed and un-encashed
dividends for the year 2014-15 and 2015-16 aggregating to ` 1,09,273/-. Further, 1,687
corresponding shares, on which dividends were unclaimed for seven consecutive years, were
transferred as per the requirements of the IEPF Rules. The details of the resultant
benefits arising out of shares already transferred to the
IEPF, year wise amounts of unclaimed / un-encashed dividends lying in
the unpaid dividend account up to the year, and the corresponding shares, which are liable
to be transferred, are provided in the Corporate Governance Report (forming part of this
Annual Report) and are also available on your Company's website, at www. mteducare.
com
DISCLOSURES i. Particulars of loans, guarantees and investments:
Particulars of loans, guarantees and investments made by the Company
required under section 186 (4) of the Companies Act, 2013 are contained in Note No. 5a,
5b, 6 12 and 17 and 21 to the Standalone Financial Statements
. ii. Transactions with Related Parties:
There were no materially significant related party transactions entered
between the Company, Directors, management and their relatives, except for those disclosed
in the
Company has formulated a Policy on Related party transactions which is
also available on the website of the Company. This policy deals with the review and
approval of related party transactions. The Board of Directors of the Company has approved
the criteria to grant omnibus approval by the Audit Committee within the overall framework
of the policy on related party transactions. All related party transactions are placed
before the Audit Committee for review and approval. Prior omnibus approval is obtained for
related party transactions which are of repetitive nature. The related party transactions
for the financial year are insignificant Commensurate with the turnover of the Company.
Further, all transactions with related parties during the year were on arm's length
basis and in the ordinary course of business. The disclosure of Related Party Transactions
has been reported in Form no. AOC-2 is Annexed as Annexure 1 and forms part of Annual
Report
. iii. Risk Management:
The Company's approach to addressing business risks is
comprehensive and includes periodic review of such risks and a framework for mitigating
controls and reporting mechanism of such risks.
iv. Internal Financial Controls:
Internal Financial Controls includes policies and procedures adopted by
the company for ensuring orderly and efficient and completeness of the accounting records,
and timely preparation of reliable financial information.
The Company has in place a proper and adequate Internal Financial
Control System with reference to financial statements. During the year, such controls were
tested and no such reportable material an appeal weakness in the design or operation was
observed except two fraud matters detected and appropriate disclosures has been made with
Stock Exchanges. As regards the qualified opinion of Auditors on Internal
Financial Control, it is stated that the Company is taking constant
steps to strengthen its process. v. Prospects:
With a current presence in each of our operating markets and a clearly
articulated expansion pipeline, we are in the process of optimising maximum opportunities
and delivering sustained value to all our stakeholders, including our people, communities,
business partners, and of course, our students. We are undertaking transformations across
functions and processes to make this Company a leader in the Education Sector
. vi. Deposits:
Your Company has not accepted any public deposits statements. Your
under Chapter V of the Companies Act, 2013
. vii. Extract of Annual Return:
The Annual Return of the Company as on March 31, 2023, in form MGT-7 in
accordance with Section 92(3) of the Act read with the Companies (Management and
Administration) Rules, 2014 is available on Company's website at www.mteducare.com.
viii. Sexual Harassment:
The Company has zero tolerance for sexual harassment at workplace and
has adopted a Policy on prevention, prohibition and redressal of sexual harassment at
workplace in line with the provisions of the Sexual Harassment of Women at workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. During the
year under review, your Company has not received any complaint pertaining to sexual
harassment.
All new employees go through a detailed personal orientation on
anti-sexual harassment policy adopted by your Company.
ix. Application made or any proceeding pending under the Insolvency
and Bankruptcy Code, 2016:
The Corporate Insolvency Resolution Process ("CIRP PROCESS")
of MT Educare Limited ("Company") was initiated by Connect Residuary Private
Limited (CRPL) An Operational Creditor of the Company. The Operational Creditor's
petitionconduct of its business, accuracy to initiate the CIRP Process was admitted by the
National Company Law Tribunal ("NCLT"), Mumbai bench, on December 16, 2022
("Insolvency Commencement Date"). Mr. Ashwin Bhavanji Shah was appointed as the
Interim
Resolution Professional ("IRP") to manage the affairs of the
Company. Subsequently, Mr. Vipin Choudhary, erstwhile Director of the Company had filed in
National Company Law Appellate Tribunal (NCLAT), New Delhi challenging the Order passed by
Hon'ble NCLT, Mumbai Bench, accordingly Hon'ble NCLAT, New Delhi stayed the
formation of Committee of
Creditors ("CoC") till the hearing or Order to be passed by
Hon'ble NCLAT, New Delhi. The Hon'ble NCLAT, New Delhi after hearing the parties
concerned on June 02, 2023 have now kept the matter "Reserved for Orders". x.
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions on these items during the year under review:
a) Issue of equity shares with differential rights as to dividend, voting or otherwise. b)
Issue of shares (including sweat equity shares) to employees of the Company under any
scheme save and except ESOP referred to in this Report. c) Neither the Managing Director
nor the Whole-time Directors of the Company received any remuneration or commission from
any of its subsidiaries.
xi. Disclosure requirement:
As per SEBI Listing Regulations, the Corporate
Governance Report with the Auditors' Certificate thereon, and the
integrated Management Discussion and Analysis including the Business Responsibility Report
(if applicable) are attached, which forms part of this annual report.
The Company has devised proper systems to ensure compliance with the
provisions of all applicable Secretarial Standards issued by the Institute of Company
Secretaries of India and that such systems are adequate and operating effectively.
BOARD POLICIES
The details of various policies approved and adopted by the Board as
required under the Act and SEBI Listing Regulations which were explained in detail in the
Corporate Governance report forming part of this annual report and are also available on
the website of the Company i.e www. mteducare.com.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Conservation of energy
The particulars as required under the provisions of Section 134(3)(m)
of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 in
respect of conservation of energy have not been provided considering the nature of
activities undertaken by the Company during the year under review.
Technology absorption
During the year, the Company has not absorbed or imported any
technology.
Foreign exchange earnings and outgoings
During the year, there were no foreign Exchange earnings and outgoings
during the year under review.
POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION
Your Company's policy on Directors' appointment and
remuneration and other matters ("Remuneration Policy") pursuant to Section
178(3) of the Act is available on the website of your Company at www.mteducare.com. The
Remuneration Policy for selection of Directors and determining Directors'
independence sets out the guiding principles for the Nomination and Remuneration
Committee for identifying the persons who are qualified to become the
Directors. Your Company's Remuneration Policy is directed towards rewarding
performance based on review of achievements. The Remuneration Policy is in consonance with
existing industry practice.
We affirm that the remuneration paid to the Directors is as per the
terms laid out in the Remuneration Policy of the Company, extract of remuneration policy
is attached and form part of this report.
DISCLOSURES WITH REPSECT TO DEMAT SUSPENSE
ACCOUNT/UNCLAIMED SUSPENSE ACCOUNT:
The Company has nothing to report with respect to Demat Suspense
Account/Unclaimed Suspense Account as per the requirement under Schedule V of the SEBI
(LODR) during the year under review.
PARTICULARS OF EMPLOYEES
The information required under Section 197 (12) of the Companies Act,
2013 read with Companies (Amendment and remuneration of Managerial Personnel) Rules, 2014
and forming part of the Directors Report for the year ended March 31, 2023.
The particulars of employees in compliance of provisions of Section
134(3)(q) read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is annexed to this report. The above referred Annexure
is also available for inspection by members at the Corporate Office of the Company, for a
period of 21 days before the ensuing 17th Annual General Meeting and up to the
date of the AGM between 11.00 a.m to 1.00 p.m. on all working days (except Saturday and
Public Holidays).
None of the employee listed on the said Annexure is a relative of any
Director of the Company. None of the employee holds (by himself or along with his spouse
and dependent children) more than two percent of the Equity Shares of the Company.
ACKNOWLEDGMENTS
Your Director's wish to express their appreciation industry
experience, for the assistance and co-operation received from the financial institutions,
banks, Government authorities, customers, vendors, Suppliers and members during the year
under review.
Your Director's also express their appreciation to all the
visiting faculty, lecturers and employees of MT Educare FAMILY for their hard work,
commitment, dedicated services and collective contribution.
CAUTIONARY STATEMENT:
Statements in the Board's Report and the Management Discussion and
Analysis describing the company's objectives, projections, estimates and expectations
may constitute forward looking statements' within the meaning of applicable
laws and regulations. Actual results may differ implied. Important factors that could
affect the company's economic operations include significant environment in India,
tax laws, litigations, interest and other costs.
|
For and on behalf of the Board |
Place: Mumbai |
Surender Singh |
Date: 8/08/2023 |
Erstwhile Chairman & Non- |
|
Executive Director |
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DIN: 08206770 |
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