birla shloka edutech ltd Management discussions

Industry Structure and development

Your directors are glad to inform you that major developments have been made by the Company in software development. The educational software developed by the Company has been installed in schools to provide knowledge through electronic media. The new strengths of the Company are in ecommerce/ e-business, digital content development, R&D services, telecom software, IT enabled services, E-Governance and Building and operating Schools.

Current Year Review

During the year under review, macroeconomic fundamentals were set to improve under the stable government at the Centre. Inflation continued to haunt the economy forcing Reserve Bank of India (RBI) to follow tighter monetary policy. Government continued its path towards putting economy on the path of growth trajectory. But the results have yet not percolated to the grass root level and will require some more time for the off-shoots of growth to appear on the economic ground.

World economies continue to face the vagaries of VUCA (Volatility, Uncertainty, Complexity and Ambiguity) world. Pull back of quantitative easing (QE III) and issues in European economies veiled the economic prospects all over the world at large. On the other hand, downward commodity and energy prices provided boosts and banes to different economies. Falling crude prices is a case to the point. While providing a boost to the developing power hungry economies like that of India, it played devastating effect on economies like Russias. While service sector grew, manufacturing did not. Against this backdrop, your Company continued its path on growth trajectory.

Future Outlook

The Education sector is one of the most promising sector creating tremendous opportunities. Being a country having 50% of its population less than 25 yrs old, the Company sees bright prospects in the coming year

Make in India campaign is expected to benefit the education sector as the government undertakes sector specific initiatives and implement policies and programs to improve overall business climate and investments. This measure is likely to increase, thanks to reduced competition from China. Revival of economy will also boost domestic consumption, leading to widening growth prospects for this industry. However, intensifying competition from neighboring countries like Bangladesh, Pakistan, Vietnam, etc., may be challenging. Vagaries of commodity prices, exchange rate

3 fluctuations and delayed economic revival may act as negatives to the growth prospects for this industry. Your Company is geared up to exploit the opportunities and challenges that arise in such conditions. Its strong distribution network, wider product range, responsiveness to the changing market conditions and resilient work force, all this can help your Company to pursue its path of future growth. On an overall basis, your Company expects a better performance in the ensuing year as well.

In Last years report, "Higher Education in India – Vision 2030", we articulated the vision for the Indian higher education system as one which is not just best in the world, but also best for the world. This year, we have taken this theme forward to explore how Indian higher education system can be made more "globally relevant and competitive" in terms of: creating globally –reputed institution , attracting international students, faculty and institutions, becoming a hub for globally-fit talent, and building a culture of research, innovation, and entrepreneurship to enable high economic growth. While we appreciate that for ‘Foundation institutions, focus on local priorities must continue: providing a well- rounded education, ‘Career- focused and ‘Research- focused institutions must embrace internationalization wholeheartedly.

Although education has been a priority sector almost close to a decade, somewhere there has been negligible will to bring in much change in the system. Prime Minister of India Mr. Modis Independence Day declaration of ‘Make in India has in a sense articulated Indias aspirations to be a global leader in the near future. We at Birla Shloka Eductech Limited, believe that this dream can be achieved only if there is an alignment of vision for skill development, higher education and research with the overall economic agenda.

Internal Control Systems and their Adequacy

Your company has adequate Internal Financial Control Systems in all areas of operations. Your Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. Services of internal and external auditors are utilized from time to time. Your company continuously upgrades these systems in line with the best available practices. These reports and deviations are regularly discussed with Management Committee Members and actions are taken whenever necessary. An independent Audit Committee of the Board reviews the adequacy of Internal Financial Control.

Environment, Health, Safety and Social Responsibility

Your Companys commitment to Nature and Society leads to preservation and enrichment of environment by conducting all its operations in an environment-friendly and safe manner. We are tirelessly continuing to act upon the initiatives (environmental, health care projects and educational programs) that would enable the Company to touch the lives of the people based around its Education Sector.The Company ensures that it always adheres to all the environmental conformances.

Risk and concerns

• The major risks which prevail in the industry are high fluctuations in the prices of software programmes and hardware components. The Company faces risks due to competition in the Indian market. Your Company is taking due care to overcome risks in the industry by adopting new technology and latest know how in development of the software programmes.

• Our Business involves installation of a large number of Computer Systems and other electronic equipments across various geographies. Such electronic equipments are prone to hardware/software malfunction, virus attacks, hacking and technological obsolescence. If any such events occur, we run the risk of disruption of our operations.

Material Developments in Human Resources:

Your company has embarked upon a major transformational journey by focusing on building capabilities with strong emphasis on people. While defining the vision, the leadership team deliberated on how to create holistic experiences that the company wants its stakeholders to have with its products, service and culture. The Human resources function has partnered with the business to drive this initiative, and has aligned the HR processes to realize its vision. The employees strength of the Company as on 31.03.2016 was 49.

Discussion on Financial Performance with respect to Operational performance:

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and the applicable Accounting Standards as well as the Generally Accepted Accounting Principles (GAAP) in India. The salient aspects of the financial performance of the Company and its subsidiary have been dealt with at some length in the Directors Report. The Consolidated Statements of Accounts of the Company covering a subsidiary duly audited are appended elsewhere in the Annual Report.

An Analysis of financial performance for the year ended 31ST MARCH 2016 is given hereinafter:

Sr. No Particulars	As at 31.03.2016	As at 31.03.2015
	Rs. in Lakhs	Rs. in Lakhs
1 Shareholders funds
(a) Share capital	209456370	209456370
(b) Reserves and surplus	783717908	805622418
2 Non-current liabilities
(a) Long-term borrowings	-	179000
(b) Other long-term liabilities	-	-
(c) Long-term provisions	376474	310203
3 Current liabilities
(a) Short-term borrowings	118361416	184349416
(b) Trade payables	439783309	439783315
(c) Other current liabilities	112505639	100878315
(d) Short-term provisions	38082699	34942015
4 Non-current assets
(a) Fixed assets	271025433	330625301
(b) Non-current investments	346020298	346520298
(c) Long-term loans and advances	127484841	126605292
5 Current assets
(a) Trade receivables	483845478	516408907
(b) Cash and cash equivalents	16204658	10710421
(c) Short-term loans and advances	311581399	291829157
(d) Other current assets	5657098	12357066
6 Impact of Foreign Exchange Fluctuations	-	-
7 Depreciation	33018798	59764204

Cautionary Statement

Some of the statement contained within this report may be forward looking in nature and may involve risks and uncertainties. Actual result and outcomes in future may vary materially from those discussed herein. Factors that may cause such variance include, but are not limited to management of growth, market acceptance of Companys product and services, risk associated with new product version, dependence on third party relationship and the activities of competitors.