Arihant Academy Ltd Management Discussions

Annexure – C to Board Report

1. INTRODUCTION:

Our Company was originally incorporated under the name "India Tutorials Private Limited" under the provisions of the Companies Act, 1956 and Certificate of Incorporation was issued by the Registrar of Companies, Mumbai, on October 30, 2007. Subsequently, the name of our Company was changed to "Arihant Academy Private Limited" via Shareholders Resolution dated September 18,2012 pursuant to which fresh Certificate of Incorporation dated October 31,2012 was issued by Registrar of Companies, Mumbai. Consequently, the status of the Company was changed to public limited and the name of our Company was changed to "Arihant Academy Limited" vide Special Resolution passed by the Shareholders at the Extra Ordinary General Meeting of our Company held on September 09, 2022. The fresh certificate of incorporation consequent to conversion was issued on September 19, 2022 by the Registrar of Companies, Mumbai. The Corporate Identification Number of our Company is L80903MH2007PLC175500. Further the Company has issued share pursuant to Initial Public Offer (IPO) and listed on SME platform of NSE on December 29, 2022.

2. INDUSTRY STRUCTURE:

India has the largest population in the world in the age bracket of 5-24 years with 580 million people, presenting a huge opportunity in the education sector. India holds an important place in the global education industry. India has one of the largest networks of higher education institutions in the world. However, there is still a lot of potential for further development and improvement in the education system.

With increasing awareness, private Indian players are collaborating with international brands to provide an international standard of education. Private investments in the Indian education sector have increased substantially over the past two decades. The demand for specialised degrees is also picking up with more and more students opting for specific industry focused qualifications. Higher education institutes in India are focusing on creating online programmes due to the increasing demand from consumers.

3. INVESTMENTS/ DEVELOPMENTS:

The education and training sector in India has witnessed some major investments and developments in the recent past.

4. OPPORTUNITIES AND THREATS:

Strength:

Growth in the Indian economy and demand creates unprecedented opportunities for company to invest significantly in each of its core businesses. Outlook for the overall industries is positive. In keeping with the philosophy of continuous consumer centric approach which is the hall mark of any organization, several developmental activities have been planned for the next fiscal year.

Opportunities:

• 100% FDI under automatic route is allowed in the Indian education sector.

• To liberalise the sector, the Government has taken initiatives such as the National Accreditation Regulatory Authority Bill for Higher Educational and the Foreign Educational Institutions Bill.

• In Duly 2022, Prime Minister Mr. Narendra Modi inaugurated a three-day Akhil Bharatiya Shiksha Samagam at Varanasi to discuss how the implementation of the National Education Policy 2020 can be taken further across the country with various stakeholders.

• As part of a comprehensive initiative known as PM eVIDYA, the Department of School Education and the Ministry of Education were recognised by UNESCO for their use of information and communication technology (ICT) during the COVID-19 pandemic.

Threats:

We operate in a competitive atmosphere. Some of our competitors may have greater resources than those available to us. While product quality, brand value, distribution network, etc are key factors in client decisions among competitors, however, price is the deciding factor in most cases. We face fair competition from both organized and unorganized players in the market. We believe that our experience in this business and quality assurance will be key to overcome competition posed by such organized and unorganized players. Although, a competitive market, there are not enough number of competitors offering services similar to us. We believe that we are able to compete effectively in the market with our quality of services and our reputation. We believe that the principal factors affecting competition in our business include client relationships, reputation, and the relative quality and price of the services.

5. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

We provide a comprehensive range of coaching services to students across various fields as mentioned below:

1. Secondary School Section (SSC, ICSE & CBSE BOARD)

- Class 8,9 and 10

2. Higher Secondary Section

• Science Section

- Class 11 and 12

- Examinations of Engineering like DEE (Main), DEE (Advanced) and MHT- CET (State level)

- Medical entrance exam NEET (National Level)

- Pharmacy entrance exam MHT- CET (State Level, Maharashtra)

• Commerce Section

- Class 11 and 12

- CA entrance exams including CA Foundation and CA Intermediate

- CS Entrance exams including CSEET and CS-Executive

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Reserves and Surplus: The Reserve and Surplus of Company is Rs. 1.514.66 Lakhs as on period ended on 31st March, 2024. Total Income: The Company has earned total Income Rs. 3,155.46 Lakhs as on period ended on 31st March, 2024.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable asset of your Company. The Company recognizes people as its most valuable asset and the Company has kept a sharp focus on Employee Engagement. The Companys Human Resources is commensurate with the size, nature and operations of the Company.

9. DETAILS OF KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Description	As at 31st March, 2024	As at 31st March, 2023	Variance	Remark
Debtors Turnover	127.50%	112.33%	13.51%	NA
Ratio
Inventory Turnover	NA	NA	NA	NA
Ratio
Interest Coverage Ratio	-	149.12%	100%	Company does not have any debt during the current financial year
Current Ratio	1.68%	2.57%	-34.75%	Reduction in current liabilities as compared to previous year.
Debt-Equity Ratio	-	-	-	NA
Operating Profit	5.94%	10.13%	-0.41%	NA
Margin (%)
Net Pro t Margin (%)	5.11%	6.44%	-0.21%	NA
Debt Service Coverage Ratio	-	3.12%	-100%	Company does not have any debt during the current financial year.
Return on Equity	7.58%	12.11%	-37.42%	Shareholders fund increased due to issue of the equity shares during the month of the December 2022.
Trade Receivables	127.50%	112.33%	13.51%	NA
turnover ratio
Trade payables turnover ratio	59.40%	109.69%	45.85%	Outstanding payment is more than as compared to previous year.
Net capital turnover ratio	2.76%	4.27%	-35.35%	New branches capitalised during the year; the company is in the expansion phase.
Net profit ratio	5.11%	6.44%	-20.70%	NA
Return on Capital employed	8.45%	11.88%	-28.87%	Due to decrease in pro t before tax in current year as compared to previous year.
Return on investment	NA	NA	NA	NA

10. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF.

The Return on Net Worth for F.Y. 2023-24 was 7.30% and for F.Y. 2022-23 was 7.57%. The Company is in the growth phase and therefore the Company has incurred substantial expenses towards the business growth and for the purpose of fund raising by getting listed on the NSE EMERGE stock exchange.

11. FORWARD-LOOKING STATEMENT:

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic, and natural calamities over which we do not have any direct/indirect control.

For and on behalf of the Board
Arihant Academy Limited
Sd/-	Sd/-
Umesh Anand Pangam	Anil Suresh Kapasi
Whole- Time Director	Managing Director
DIN - 03524171	DIN - 03524165
Place: Mumbai
Date: 14.08.2024