Firstobject Technologies Ltd Management Discussions.

CORPORATE OVERVIEW

Firstobject Technologies Ltd is an IT / ITEs and an E- education company. E-learning was started as a division in the year 2010; it has unveiled more quality products rapidly in the K-10 and beyond segment. FTL is in the K-10 segment. It has stopped Legal, Management and Engineering segments due to rapid changes in syllabus and heavy costs of obsolescence.

Firstobject currently offering its e-learning modules through DVDs, USB ports, Androids etc customized for the usage by various users like Schools, Institutions, etc.

E-learning business is going through a grater transformation both in terms of technological changes and also syllabus changes on yearly bases of various boards leading to redundancy and revenue and financial losses.

Further, augmented reality artificial intelligence, and machine learning are fast changing the landscape of e- Learning. To gear up to these new changes Firstobject is re-orienting itself and this transformation may take significant period of time.

OPPORTUNITIES IN E - EDUCATION INDUSTRY POST COVID 19

The new normal created by the COVID-19 outbreak has compelled organisations to rethink the way businesses operate and deliver value to customers.

Moreover, the COVID-19 pandemic has put the spotlight on the ever-increasing structural imbalances in school education in terms of rural-urban, rich and poor and gender divide.

Sometime in the second week of March, state governments across the country began shutting down schools and colleges temporarily as a measure to contain the spread of the novel coronavirus. The structure of schooling and learning, including teaching and assessment methodologies, was the first to be affected by these closures. Only a handful of private schools could adopt online teaching methods. In this time of crisis, a well-rounded and effective educational practice is what is needed for the capacity-building of young minds.

It is also important to reconsider the current delivery and pedagogical methods in school and higher education by seamlessly integrating classroom learning with e-learning modes to build a unified learning system.

What is eLearning Exactly?

Broadly, eLearning involves the use of digital media and technology to deliver learning experiences. A learning experience attempts to simulate the real-world classroom learning process. It involves assembling great content, distributing it to facilitate learning, managing the learning process and providing validations (E.g. tests, certifications). E-Learning typically reaches learners through one of 4 channels: Traditional Education, Corporates, Government or Direct Consumer. In the past few years, direct consumer learning has emerged as one of the fastest growing channels. On the supply side, the industry has content providers (Authors, Institutions, etc.), service providers (Content creation, Publishing, Marketing, etc.) and technology providers (Authoring tools, Platforms, Learning Management Systems, etc.). Businesses in the eLearning space often straddle more than one bucket to deliver a seamless experience.

Market Size

Currently, the school segment is valued at US$ 52 billion and contributes 52 per cent to the education market in India, higher education contributes 15 per cent of the market size, text-book, and allied service contribute 28 per cent and vocational education in manufacturing and services contributes 5 per cent. Higher education system in India has undergone rapid expansion. Amid the opportunities spread across in the traditional mode, e-learning has to make its place in terms of significant contribution for which huge marketing expenses for propagation and brand building are essential.

In E-education, Firstobject is ready to cater to: l Pre Schooling l Schooling l Various Entrance Examinations l Professional Courses

Preschool learning is very important in the initial development of a childs life. For one, kids get their first taste of education. They start learning things through play. At this stage of life, kids are not really expected to study. But the actual learning is imparted with the help of products developed for kids such as games, songs and other activities. Children also get to taste independence factor. Our Products for Preschools contribute significantly in the preliminary education of the child.

At Firstobject, we have utilized the services of teachers who understand the psyche of students and parents. This has not only helped in figuring out the right way of teaching an individual child but also arrive at the correct model for developing the Preschool products. Our Pre School offerings contain Rhymes, games, stories, songs, alphabets and numbers, etc to give the kids the fun and zeal when they learn the first lessons of their lives. A child is made ready to identify different objects, colours and various common things. Children are also made to develop different self-help qualities along with basic etiquettes. Under Pre School we cover the whole gamut of content right from play school to Senoir KG.

SCHOOLING

Firstobject offers E-Educational products mapped to the State Boards and CBSE for Pre School, 1st, 2nd, 3rd, 4th , 5th , 6th , 7th, 8th, 9th & 10th Std. syllabus course on subjects viz. Mathematics (Algebra and Geometry), Science (Physics, Chemistry and Biology) and Social Science (History, Civics, Geography and Economics) are available under the brand names of First Pre School and First e School. Our courseware have been designed and prepared by eminent Academicians. The course content comprises of NCERT Questions, Enhance your Knowledge, Board Questions, Mock test which contains animations, examples, practice questions and much more to supplement the actual process of learning thereby promoting a swift grasp of the subject.

We aspire to be world class tuition and test preparation brand and our commitment and efforts towards our goal remain concerted and consistent.

PROGRESS OF E-LEARNING MODULES AT FIRSTOBJECT:

The Company has developed and launched its E-Learning Modules for A.P State Board, Telangana State Board, Maharashtra State Board and CBSE Syllabus under K-10.

The E-Learning modules, meant for A.P State Board, Telangana State Board, Maharashtra State Board and CBSE, are prepared subject-wise for classes under K-10 and each module has been worked out with meticulous planning under the supervision of eminent scholars and academicians. Both under E-learning and E-Tutorial, each subject is covered keeping in mind the average student IQ and each topic has been covered under 3 sub modules in the form of Virtual Class, Tutorials and Notes.

SERVICES IN EDUCATION AND HEALTHCARE:

At Firstobject we offer differentiated services using a unique network of global delivery models. The Company is adept in delivering specific Services in Education and Healthcare solutions. The Companys strength lies in its innate ability to understand the requirements of its clients and to continuously build the competencies and strengthen the domain capabilities to provide integrated Software Solutions, Consulting and outsourcing customized to clients business-specific needs.

l CONSULTING

We work with clients to develop and deliver innovative solutions that can successfully transform an organizations capabilities. We have the breadth of experience, global resources, superior assets and deep knowledge and insights to create new forms of value and to help our clients become high-performance businesses.

We consult our clients from strategy to execution, we also delivers the insight need for better decision making and improved business outcomes to accelerate high performance.

l OUTSOURCING SERVICES

Knowledge Process Outsourcing (KPO):

Firstobject Technologies provides middle office and back office support to capital market arms of leading global banks, educational institutions, manufacturing giants and services companies. Our customer-partners are all leaders in their respective industries and are included in top business enterprises. With each of our partners, we manage a number of discrete programs providing specific needs across multiple divisions. Current customer programs include data search programs, research report preparations, price monitoring and competitive analytics, financial contract risk management and data reconciliation services

Below are some Demand and supply side drivers for KPO Industry

Demand side drivers

Supply side drivers

THREATS & RISKS

Part i: External Risks relating to the Business of the Company:

1. Changes in Government policies could adversely affect the Companys business, results of operations and financial condition.

2. A decline in Indias foreign exchange reserves may affect liquidity and interest rates in the Indian economy, which could have an adverse impact on the Company. A rapid decrease in reserves would also create a risk of higher interest rates and a consequent slowdown in growth.

3. If inflation were to rise in India, the Company might not be able to increase the prices of its services and products in order to pass costs on to its customers and the Companys profits might decline.

4. A significant change in the Central and State Governments economic liberalization and deregulation policies could disrupt the Companys business.

5. If regional hostilities, terrorist attacks or social unrest in India increase, the Companys business could be adversely affected and the price of the Shares could decrease.

6. A slowdown in economic growth in India could cause the Companys business to suffer

7. Natural calamities could have a negative impact on the Indian economy and could cause the Companys business to suffer and the price of the Shares to decrease.

8. Covid -19 leading to continuous lock down and non- committal of clients due to schools being shut.

Part ii : Risks Associated with the Expansion of the Companys Business

1. The Company faces risks and uncertainties associated with the implementation of its expansion projects.

The Company plans to expand its brand and product portfolios and its service and distribution networks in India and abroad in the near future, both organically and inorganically via strategic acquisitions. In taking these and any other such expansion initiatives, the Company faces risks and uncertainties, including, funding anticipated to be deployed towards the cost of the project will not become available in a timely manner or at all.

2. The company has various education modules, to sell them company requires specialized marketing force which also needs huge expenditure, paucity of funds may delay aggressive marketing of its e-learning products.

3. IT/ITES, Education & Healthcare services have become very competitive and margins are under pressure due to varied kind of assignments.

4. E-learning offerings are subject to syllabus changes from time to time.

Risks and Risk Mitigation

The ITES Industry thrives under a dynamically changing and highly competitive business environment. The Company too faces several business risks, of which some prominent ones are discussed hereunder alongside the risk mitigation approach followed by the Company:

Concentration risks

The Company has taken significant steps to ensure that it does not become too dependent on few clients or any particular geography.

Considerable efforts are being made to generate business from new geographies.

Investment portfolio related risks

In order to deal with surplus cash, the Company, as a policy, does not prefer to invest in high risk assets such as equities and low liquidity assets like real estate etc. The primary area of risk for the Companys market exposures are related to its investment in securities. To mitigate risk, surplus funds if any are invested in appropriate avenues upon a review by the investment committee. All investment decisions are driven by certain guiding principles like, safety of investments, liquidity and-returns.

Employee-related risks

Attrition: Human Resource functions and initiatives of the Company are driven by a strong set of values and policies. The Company has maintained a competitive, healthy and harmonious work environment at all levels. The Company has taken new initiatives to strengthen its recruitment processes, values and vision programmes, leadership and performance management programmes to retain the best talent.

Constraints in availability of skilled resources

The Company offers competitive salary constantly benchmarked to the market, world class infrastructure, excellent work culture, high class training and career development and long term growth prospect, to remain an employer of choice. The Companys development centers are in cities which have good availability of skilled manpower.

Competition-related risk

Indian IT services market remains a very competitive space. The Company is facing competition from large Indian IT vendors and global vendors which are increasing their India presence by setting up offshore delivery centres.

The Company is managed by locally recruited professionals and talents across all geographies. They have established strong interaction with various analyst firms worldwide through participation in IT conferences and industry specific events attended by ClOs and executives of major corporations. Sales & marketing and delivery infrastructure of the Company is world class. This helps the Company to maintain its competitive edge over other players.

Exchange rate risk: Hedge Accounting

The company has policies and measures in place to mitigate Exchange rate risk.

Geo-political risks

The ability of Indian ITES services companies to secure offshore projects from client organisations abroad is often subject ‘to threat perceptions as regards the Indian subcontinent. Current civil situations in neighboring countries of India may have negative implications for the operations of the Company. To mitigate these risks and to ensure continued delivery of services to clients irrespective of any geo-political disturbances, the Company has been taking appropriate measures in respect of disaster recovery and business continuity, at different locations.