MANAGEMENT REPORT
(i) Industry Structure and development
Your directors are glad to inform you that major developments have been made by theCompany in software development. The educational software developed by the Company hasbeen installed in schools to provide knowledge through electronic media. The new strengthsof the Company are in e-commerce/e-business, digital content development, R&Dservices, telecom software and IT enabled services.
(ii) Opportunities and Threats
With many developments in the economy and severe competition amongst the companies, theprime opportunity lies in meeting customer’s expectations in terms of high quality,prompt response in time, services & performance and the same opportunities wereregularly grabbed by your Company.
The need for ICT solution in government school is growing and opportunities areavailable in this space. Retails opportunities are available by way of sale of softwarecontents to the end customer directly.
The threats faced by the software sector are global downturn with which small playersmore severely hit.
(iii) Segment-wise or Product-wise Performance
Almost 99% of the total revenue is from software segment hence segment reporting as perAS17 is not applicable.
(iv) Outlook
The Education sector is one of the most promising sector creating tremendousopportunities. Being a country having 50% of its population less than 25 yrs old, theCompany sees bright prospects in the coming year. The Company sees tremendous growthopportunities in the following areas:
Supply of ICT solution to government and private schools.
We see numerous opportunities under the ever increasing scope of Information andCommunication Technology (ICT) of Government of India. The ICT is being used from SchoolEducation to University Education. The government is increasingly focusing at the PublicPrivate Partnership (PPP) model to set up more number of Centers of Excellence and SkillBased Vocational Training Centers which will enhance the employability potential ofstudents.
The government of India, with the aim of improving Computer Literacy in Public Schoolsis increasingly opting for Public Private Partnerships to source IT Infrastructure andtraining under Sarva Shiksha Abhiyaan (SSA) Programme.
Institutions have varying requirements and the private sector may be able to offerinnovative solutions that will provide quality services and value for money.
K – 12 Curriculum Development
The company has developed a research based K-12 curriculum which is based on theNational Curriculum Framework 2005 and draws on the best practices of national andinternational boards and therefore merges seamlessly with the prevalent boards ofeducation that currently exist in the country, namely CBSE, ICSE, IB and IGCSE. Thecurriculum will bring back creativity and the joy of learning to our schools and drivesthe students take up the onus of learning and learn to be independent learners.
The curriculum focuses on conceptual understanding rather than "covering ofcontent". Along with the curriculum, a number of support functions are provided toexisting schools and new schools across the length and breadth of the country in the formof detailed lesson plans, resources, teaching aids and teacher training and teachersupport to ensure that the curriculum is implemented effectively, be it a private schoolin a tier 1 city or a government school in rural India.
Most of the schools follow the conventional teaching methodology and curriculum wherethe classroom is more teacher centric classroom than a student centric one.
The Company sees an opportunity to help transform these schools by offering the K-12curriculum in these schools.
Shloka Schools:
The Company seeks to extend its foray in education through Shloka preschools and K-12schools. Shloka School aims to be a ‘Center for Excellence’. Its mission wouldbe to provide affordable quality education that ensures children are ‘healthy, safe,engaged, supported & challenged’.
It will have a well-researched, specially designed curriculum with student centricapproach where the student joyfully seeks knowledge.
It will be an experiential & outcome based dynamic curriculum which isdevelopmentally appropriate. It will cater to all Indian national level and state levelboards. Institutional design planning of Shloka schools will ensure excellence in learningenvironment. Institution designs will be environment friendly and in sync with thecurriculum. Shloka schools will strive towards sensitizing children to Society Economy& Environment. We are already in talks with potential partners for setting up theseschools.
Interactive multimedia learning and education system.
The company has a well developed library of syllabus based interactive multimedialearning content for CBSE & Maharashtra State Board. The company has initiated theprocess of enhancing the features of the existing content and also develop the syllabusbased interactive multimedia content for other state and central boards to expand thefootprints in the segment of Multimedia Content for learning across the country
Vocational education through Spoken English Language training business.
Your Company is planning to enter the field of vocational education through SpokenEnglish Language training business.
India’s private sector education and training market is estimated to be worthUS$40bn, with a potential 16% five year CAGR. Of this, the adult market for ELT (aged 20+)is estimated to be worth around US$450m. It is estimated that at least 3.8m people payingan average fees of $120.
Demand for English-Language training
| Age | Total | Urban | Rural | Urban tutoring | Rural tutoring | Total | Average | Market | Market |
| (m) | (m) | (m) | (%) | (%) | (m) | fee (Rs.) | (Rsm) | (US $m) |
| 20-24 | 105 | 31 | 73 | 2.0 | 0.5 | 0.99 | 5,000 | 4,969 | 124 |
| 25-29 | 94 | 28 | 66 | 4.0 | 1.0 | 1.79 | 5,000 | 8,936 | 223 |
| 30-34 | 83 | 25 | 58 | 2.0 | 0.5 | 0.79 | 5,000 | 3,943 | 99 |
| English training market | | | | | | | | 17,847 | 446 |
Source: CLSA Asia-Pacific Markets, United Nations Population database
Vocational training market in India is accounted for US$1,365m and English trainingrepresents one-third of this figure. Demand for English skills at a corporate level isdriven by service sector in particular (eg. growth of call centres, ITes companies).English language ability therefore commands a premium in such sectors, particularly inMNCs.
Setting up and managing Teacher Training Institutes
In the coming years India is expected to face a huge demand for schools andteachers to educate its rapidly increasing school population. The curriculum in most ofthe existing Teacher Training Institutes does not equip teachers with the requisite skillsto prepare students for tomorrow.
We are committed to setting up state of the art Teacher Training Institutes across thecountry that will attract the country’s leading talent and prepare a cadre of highlyskilled teachers who can ensure that each child learns in our classrooms. Theinfrastructure of the teacher training institute will mirror the kind of experientiallearning environment that is advocated for the child. The teacher training school willhouse state of the art science laboratories, math and social science laboratories, art andperforming art studios and sports grounds.
Development of Teaching Solutions and Learning Aids for Early Year Schooling
The company intends to set up development centre to create learning solutions forthe young learners about the space, environment & relationships around them. Theprogram will aid children to explore & nurture relationships they share within thespectrum of this space/ environment, empowering them to take ownership of the environmentand relationships around them while contributing positively towards it.
This unique solution together with the learning aids and collaterals developed by thecompany intends to provide unique teaching methodology and aids for Pre Schools. Thecompany intends to have strategic tie ups with leading providers of collaterals likestorybooks, music CDs, Story CDs, games and manipulative games, theme kits, toys,interactive games etc., to augment the solutions developed by the company.
Public Private Partnership (PPP) model for setting up of Schools
The State Governments are taking initiatives with a goal to establish Senior SecondarySchools under "Design, Build, Finance, Manage, Operate and Transfer (DBFMOT)" tomake education within reach of more people, in areas where no schools exist. Thegovernments are keen to explore the Public Private Partnership (PPP) model forimplementing this initiative wherein the Government envisages that the private partnerwill design, build, finance and manage these schools for tenure of around 30 years. Thegovernment supports the initiative by providing Land and certain Capital Assistance to theprivate partner
The company sees enormous potential in this space for future growth as more and morestates are likely to devise and implement similar schemes for Senior Secondary Educationand probably in primary education too.
Supply of software as per customer specifications and requirements.
The company is engaged in the business of providing customized software based on thespecifications and requirements of its customers. The company sees more prospects andgrowth in this segment and therefore, is enhancing its capabilities and offer moreproducts and services in this segment.
(v) Risk and concerns
1. The major risks which prevail in the industry are high fluctuations in the prices ofsoftware programmes and hardware components. The Company faces risks due to competition inthe Indian market. Your Company is taking due care to overcome risks in the industry byadopting new technology and latest know how in development of the software programmes.
2. Our Business involves installation of a large number of Computer Systems and otherelectronic equipments across various geographies. Such electronic equipments are prone tohardware/software malfunction, virus attacks, hacking and technological obsolescence. Ifany such events occur, we run the risk of disruption of our operations.
(vi) Internal control system and their adequacy.
The Company has set up adequate internal control systems to safeguard the assets of theCompany and to conduct checks on the maintenance of accounting records. A continuousprocess of checking is introduced in the Company. The Company has an independent appraisalsystem to examine and evaluate the adequacy and effectiveness of Internal control Systems.
(vii) Financial Performance with respect to Operational Performance.
The Company has achieved a turnover of Rs.18560.25 Lakhs during the year 2010-11. Toget an overall view on financial performance, please refer the Financial Results as givenabove.
(viii) Material development in Human Resources/ Industrial Relations front, includingNumber of people employed.
The working environment of the Company was cordial during the year. The Company hastaken steps to provide training to all the levels of employees of the Company in variousdepartments. The workforce of the Company including workers, staffs and executive were62during the year under review.
(ix) Cautionary Statement
Some of the statement contained within this report may be forward looking in nature andmay involve risks and uncertainties. Actual result and outcomes in future may varymaterially from those discussed herein. Factors that may cause such variance include, butare not limited to management of growth, market acceptance of Company’s product andservices, risk associated with new product version, dependence on third party relationshipand the activities of competitors.