MT Educare Ltd Management Discussions.

Your Directors submit for your consideration the Management Discussion and Analysis Report on the working of the Company for the financial year ended 31st March, 2021.

Economic Overview

Global Economic overview:

COVID-19 has triggered the deepest global recession in decades. The outbreak has pushed several Governments to enforce a sudden lockdown in order to stop the spread of the virus generating both demand and supply shock across the global economy.

While the ultimate outcome is still uncertain, the pandemic will result in contractions across the vast majority of financial development over all economies. It will also have very long term impact on labor productivity and potential output. As per the World Bank Report, the immediate policy priorities are to alleviate the human costs and attenuate the near-term economic losses. Once the crisis abates, it will be necessary to rea3 rm a credible commitment to sustainable policies and undertake the reforms necessary to buttress long-term prospects. Global coordination and cooperation will be critical.

The pandemic highlights the urgent need for health and economic policy action-including global cooperation-to cushion its consequences, protect vulnerable populations, and improve countries’ capacity to prevent and cope with similar events in the future.

Indian Economic Review:

Since the 2000s, India has made remarkable progress in reducing absolute poverty. Poverty levels are estimated to have declined from 21.6 percent in 2011 to 13.4 percent in 2015 (at the international poverty line), lifting more than 90 million people out of extreme poverty. In recent years it has undertaken important reforms to spur economic growth - introducing the bankruptcy code, implementation of the GST to integrate the national market and undertook a series of reforms to ease the conduct of business.

According to the World Bank overview, growth was, already slowing when the Covid-19 pandemic struck. This was mostly due to a combination of domestic issues - including impaired balance sheets in the banking and corporatesectors and weak growth in rural incomes - as well as the slowdown in global trade.

Before the pandemic, the economy was already decelerating. Real GDP growth had moderated from 7.0 percent in 2017-18 to 6.1 percent in 2018-19 and 4.2 percent in 2019-20. Due to long-standing structural rigidities in key input markets; continuing balance sheet stress in the banking and corporate sector, compounded more recently by stress in the non-banking segment of the financial sector; increased risk aversion among banks and corporates; a decline in rural demand; and a subdued global economy. Although the government initiated several policy actions to arrest the slowdown, the pandemic accentuated the down turn and real GDP contracted by an unprecedented 23.9 percent (year-on-year) in Q1 FY21.

Education Industry review

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 in the education system.

India has the world’s largest population of about 500 million in the age bracket of 5-24 years, which provides a great opportunity for the education sector. The education sector in India was estimated at US$ 91.7 billion in FY18 and is expected to reach US$ 101.1 billion in FY19.

Number of colleges and universities in India reached 39,931 and 993, respectively, in FY19. India had 37.4 million students enrolled in higher education in FY19. Gross Enrolment Ratio in higher education reached 26.3% in FY19.

In 2020-21, there were 9,700 total AICTE approved institutes. Of the total, there were 4,100 undergraduates, 4,951 postgraduates and 4,514 diploma courses in AICTE approved institutes.

The country has become the second largest market for E-learning after the US. The sector is expected to reach US$ 1.96 billion by 2021 with around 9.5 million users. In India, the online education market is forecast to reach ~US$ 8.6 billion by 2026.

From April 2000 to September 2020, Foreign Direct Investment (FDI) equity infl ows stood at US$ 3,849.20 million according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

The education and training sector in India witnessed some major investments and developments in the recent past. Some of them are:

• In May 2021, the Institute of Health & Management (IHM), Australia, announced its plan to o3 er scholarships worth Rs. 10 crore (US$ 1.3 million) to nurses in India to recognise their commitment and dedication amid the COVID-19 pandemic. The scholarship will be o3 ered to those nurses undertaking the ‘Gateway to global nursing programme’.

• In May 2021, the BITS School of Management (BITSoM) joined forces with London Business School (LBS). This partnership will focus on three segments—student engagement programme, LBS faculty teaching at BITSoM and developing joint executive programme in the space of women leadership.

• In May 2021, Virohan a healthcare ed-tech start-up, which provides vocational training for paramedics, raised US$ 3 million in the Series A funding from Rebright Partners.

• As per the Union Budget 2021-22, under the NISHTHA training programme around 5.6 million teachers are to be trained in 2020-21.

• In April 2021, Education India—India’s academic partner and a start-up in the fi eld of education—is set to invest Rs. 20 crore (US$ 2.4 million) in School Acquisition Module. The company is planning to have more than 200 schools on lease Module until 2023.

• On April 1, 2021, Union Education Minister launched the ‘MyNEP2020’ Platform of the NCTE Web Portal. The platform seeks to invite suggestions/inputs/memberships from stakeholders for preparing drafts for development of the National Professional Standards for Teachers (NPST) and the National Mission for Mentoring Program Membership (NMM). The ‘MyNEP2020’ platform will be operational from April 1, 2021 to May 15, 2021.

• In January 2021, troops of the Indo-Tibetan Border Police (ITBP) launched an internet tools-based learning centre for school-going children in a Naxal violence-a3 ected district of Chhattisgarh.

Apart from Above

Some of the other major initiatives taken by the Government are:

• In April 2021, India along with Bangladesh, Brazil, China, Egypt, Indonesia, Mexico, Nigeria and Pakistan joined the United Nation’s E9 initiative. E9 initiative is the fi rst of a three-phased process to co-create an initiative on digital learning and skills, targeting marginalised children and youth, especially girls. The initiative aims to accelerate recovery and advance the Sustainable Development Goal 4 agenda by driving rapid change in education systems.

• According to Union Budget 2021-22, the government allocated Rs. 54,873.66 crore (US$ 7.53 billion) for Department of School Education and Literacy, compared with Rs. 59,845 crore (US$ 8.56 billion) in Union Budget 2020-21.

• The government allocated an expenditure budget of Rs. 38,350.65 crore (US$ 5.28 billion) for higher education and Rs. 54,873 crore (US$ 7.56 billion) for school education and literacy. The government also allocated Rs.3,000 crore (US$ 413.12 million) under RashtriyaUchchatarShikshaAbhiyan (RUSA).

• Under the Union Budget 2021-22, the government has placed major emphasis on strengthening the country’s digital infrastructure for education by setting up the National Digital Educational Architecture (NDEAR).

• In January 2021, in order to mitigate the impact of challenges created due to COVID-19 pandemic, the Ministry of Education issued guidelines for identifi cation, admission and continued education of migrant children.

• On January 15, 2021, the third phase of Pradhan Mantri Kaushal Vikas Yojana (PMKVY) was launched in 600 districts with 300+ skill courses. Spearheaded by the Ministry of Skill Development and Entrepreneurship, the third phase will focus on new-age and COVID-related skills. PMKVY 3.0 aims to train eight lakh candidates.

• In December 2020, the Ministry of Skill Development and Entrepreneurship, in collaboration with the Tata Indian Institute of Skills, launched two short-term courses in factory automation.

Road Ahead

In 2030, it is estimated that India’s higher education will: • combine training methods that involve online learning and games, and is expected to grow 38 per cent in the next 2–4 years

• adopt transformative and innovative approaches in Higher education

• have an augmented Gross Enrolment Ratio (GER) of 50 per cent

• reduce state-wise, gender based and social disparity in GER to 5 per cent

• emerge as the single largest provider of global talent with one in four graduates in the world being a product of the Indian higher education system

• be among the top fi ve countries in the world in terms of research output with an annual R&D spend of US$ 140 billion

• have more than 20 universities among the global top 200 universities

Various Government initiatives are being adopted to boost the growth of distance education market besides focusing on new education techniques, such as E-learning and M-learning.

Education sector has seen a host of reform and improved financial outlays in recent years that could possibly transform the country into a knowledge haven. With human resource increasingly gaining signifi cance in the overall development of the country, development of education infrastructure is expected to remain the key focus in the current decade. In this scenario, infrastructure investment in the education sector is likely to see a considerable increase in the current decade

The Government of India has taken several steps including opening of IIT’s and IIM’s in new locations as well as allocating educational grant for research scholars in most Government institutions. Furthermore, with online mode of education being used by several educational organisations, the higher education sector in India is set for major change and development in the years to come.

(Source: www.ibef.org)

National Education Policy

The new National Education Policy (NEP) introduced by the Indian government is making way for large scale, transformational reforms in both school and higher education sectors. The policy is built on foundational pillars of Access, Equity, Quality, A3 ordability and Accountability, and is aligned with the 2030 Agenda for Sustainable Development. According to Union Budget 2020-21, the Government has allocated Rs 59,845 crore (US$ 8.56 billion) to the Department of School Education and Literacy. Revitalising Infrastructure and Systems in Education (RISE) by 2022 was announced in Union Budget 2020-21 at an outlay of Rs 3,000crore (US$ 429.55million). Press Release: PIB.

THREATS AND OPPORTUNITIES

The Covid-19 pandemic has driven the fastest changes to higher education across the globe, necessitated by social distancing measures preventing face-to-face teaching. This has led to an almost immediate switch to distance learning by higher education institutions. Anatomy faces some unique challenges. Intrinsically, anatomy is a three-dimensional subject that requires a sound understanding of the relationships between structures, often achieved by the study of human cadaveric material, models, and virtual resources. The coronavirus (Covid-19) pandemic is an unprecedented emergency that has a3 ected all global industries, including education. With the widespread implementation of social distancing and self-isolation policies, it is not feasible for educators and students to attend lessons or assessments as they have previously. The Covid-19 pandemic has disrupted our longstanding educational practices and has precipitated an urgent need for many institutions to rapidly implement alternative educational and assessment strategies.

The long term shutdown of educational sector and other business operations to contain the Covid-19 menace, the resultant liquidity crunch along with the time and resources needed to return to normalcy of business operations, are threats that your Company shares with other business entities globally. Times of such adversity pose challenges to outperform and your Directors and Senior Management of the Company with co-operation and dedication of its personnel at all levels stand committed to counter the threats with innovative strategies and over extending the reach of technological boundaries.

The Company is pro-actively identifying and pursuing opportunities by developing new key accounts and focusing on other available opportunities.

Company continues to put in place a comprehensive and robust enterprise-wide risk management structure, to enable all the businesses to recognize risks in advance based on the key initiatives by the business, so that appropriate and adequate mitigation plans can be worked out to ensure the goals are achieved. The risk management mechanism is an integral part of the Company’s core process and involves recording, monitoring, independent testing and controlling of the internal functions of the enterprise by way of establishing Risk Control Matrix (RCM) to ensure process control, Business Risk Management (BRM) framework for business objectives, and Entity Level Control (ELC) for a comprehensive risk reporting. The rapid changes in technology across the globe have necessitated a dynamic change in the Company’s business and delivery models. As risk-taking is an intrinsic part of all the businesses, it has been MT’s constant endeavor to balance risk appetite in each line of business to ensure that each of the businesses generates high risk-adjusted returns, with the underlying objective of maximizing value for the shareholders.

MT has taken proactive steps to identify and prioritize the risks upfront, document them in consultation with the business groups and defi ne the risk management framework. The Company has laid out internal controls over Financial Reporting to be followed by the Company. Such internal financial controls are adequate and operate e3 ectively. At entity level, MT’s risk management framework addresses all the signifi cant risks of the businesses as envisaged by the management from time to time, based on the experience, the environment surrounding each business activity and future initiatives, to achieve the business group’s objectives along with the relevant mitigation strategy. The mitigation strategy is simultaneously addressed by the respective business group for each of the identifi ed risks while fi nalizing strategic and operational parameters of the business. The compliances and assurance of the risk mitigation strategies are addressed by the

Internal Audit and Assurance Group. The Company has identifi ed the major and signifi cant risks into two broad categories, External Risks and Internal Risks, with mitigation strategies of each. The Company is well-diversifi ed in terms of both its service o3 erings and geographic spread.

OUTLOOK

The world faced one of the most severe pandemics in the last several decades, which led to lockdowns, displacement/ migration of workforce, and disruption of any business activity which entailed physical contact. Coaching services were also hit hard by the Pandemic. Despite the challenging circumstances, e3 orts of the Board, Management team and the on-ground sta3 has brought about swift changes in the delivery model from o3 ine (i.e. physical coaching centres) to online, whilst striving to maintain the same quality of education, as was done prior to the pandemic.

The management will continue to take incremental steps in its commitment to deliver top notch coaching and ancillary services, to satisfy all our Stakeholders.

RISK & CONCERNS

Your Company’s Board of Directors have put in place adequate risk assessment and risk mitigation measures. The Executive Management has an appropriate framework that generates confi dence of foreseeing and mitigating the risks, which every manufacturing company faces in the form of fl uctuations in the supply and pricing of fuel, energy and essential raw material. However, no measures are adequate when confronted by force majeure event like Covid-19.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adopted global practices for evaluating and reporting on internal controls, based on its operational experience. It has also implemented one of the leading ERP solutions in its operations to integrate various facets of business operations, including Human Resources, Finance, and Sales. This has enabled the Company to control and monitor its operations and strengthen the ability of internal controls to function most optimally. These procedures ensure that the transactions are properly authorized, validated and reported and that the assets of the Company are safe-guarded. Additionally, the Company has laid down policies, wherever required, the Company has desired internal control & mechanism in place & more has designated internal auditor from internal source to complete the audits as per a defi ned plan in place from time to time. The Statutory Auditors also verify the adequacy of the internal financial controls as well as compliances with the applicable laws and statutory regulations.

The Audit Committee of the Board with an Independent Director as itsChairman, meets quarterly and as & when required with the Managementand Auditors to review the reports and to address the exceptions, if any.

FINANCIAL PERFORMANCE AND KEY FINANCIAL RATIOS Consolidated Results Income

The consolidated revenue for the year FY21 stood at Rs. 11,308 lakhs as against Rs. 23,143 Lakhs in FY20, decrease by 51% mainly on account of decline in enrolment in its coaching business thus a3 ecting the revenue to that extent.

Expenditure

Total expenditure stood Rs. 13,097 lakhs during the year under review as compared to Rs. 23,910 Lakhs in FY 20, due to lower scale of operations due to Covid situation.

Operational Expenses

The Direct expenses mainly includes fees paid to visiting faculties& Printing Expenses for the study materials which are issued to students as a part of course material. The direct expense for the year FY21 was Rs. 2,178 Lakhs as against Rs. 10,389 Lakhs in FY20 down on account lower scale of operations due to Covid situation.

Employee Benefi t Expenses

The employee benefi t expense for the year FY21 stood at Rs.1,946Lakhs as against Rs.3,193 Lakhs in FY20, down by 40% on account of reduction in number of employees and controls on hiring as a cost saving measure.

Other Expenditure

Other expenses for the year FY21 stood at Rs. 2,950 lakhs as against Rs. 3,638 lakhs in FY 20 mainly on account of saving of Advertisement Expenses. Also, expenses have reduced on account of cost saving measures adopted by the company.

Finance Costs

Finance costs for the year FY 21 stood at 1,663 lakhs as against 2,403 lakhs in FY 20 down on account of interest cost on borrowings.

Depreciation and Amortisation Expenses

Depreciation & Amortisation expenses for the year FY 21 stood at 2,633 lakhs as against 4,288 lakhs in FY 20 on account of de-recognition of ROU asset.

Profi t After Tax

The profi t/(loss) after tax is Rs. (3,022) lakhs for F.Y. 2021 as compared to profi t after tax for Rs. (4,593) Lakhs for F.Y. 2019-20.

SOURCE OF FUNDS Share Capital

The equity share capital remains same for Rs. 7222.81 Lakhs during the year under review.

Other Equity

Other equity decreased by Rs. 2,990 Lakhs from Rs 10,063Lakhs as on March 31, 2020to Rs. 7,073 Lakhs as on March 31, 2021 largely on account of Net lossincurred during the year.

Non-Current Liabilities

Non current liabilities decreased by Rs. 3,376 Lakhs from Rs 9,965 Lakhs as on March 31, 2020 to Rs. 6,589 Lakhs as on March 31, 2021 largely on account of repayment of loans and payment of lease liability during the year.

Current Liabilities

Current liabilities increased by Rs. 1,373 Lakhs from Rs 15,525Lakhs as on March 31, 2020 to Rs.16,898 Lakhs as on March 31, 2021 largely on account of increase in Business Creditors and other payable.

APPLICATION OF FUNDS

Non-Current Assets

Non-Current Assets decreased by Rs 7,651 Lakhs from Rs 30,982 Lakhs as on March 31, 2020 to Rs 23,331 Lakhs as on March 31, 2021, mainly on account of derecognition of right-of-use asset, reclassifi cation of non-current loans given becoming current in natureand reversal of deferred tax asset.

Current Assets

Current assets increased by Rs 2,657 Lakhs from Rs 11,794 Lakhs as on March 31, 2020 to Rs 14,451 Lakhs as on March 31, 2021, mainly due to reclassifi cation of non-current loans given becoming current in nature.

Standalone Results Income

The revenue for the year FY21 stood at Rs. 7,561 lakhs as against Rs. 16,802 lakhs in FY20, mainly on account of decline in enrolment in its coaching business thus a3 ecting the revenue to that extent.

Total Expenditure

Total expenditure reduced by Rs. 8,787 lakhs in FY 21, during the year under review.

Operational Expenses

The Direct expenses mainly includes fees paid to visiting faculties & Printing Expenses for the study materials which are issued to students as a part of course material. The direct expense for the year FY21 was Rs. 2,178 Lakhs as against Rs. 6,854 Lakhs in FY20, down on account of lower scale of operations due to Covid situation.

Employee Benefi t Expenses

The employee benefi t expense for the year FY21 stood at Rs 1,849 Lakhs as against Rs. 2,890 Lakhs in FY20, down on account of reduction in number of employees and controls on hiring as a cost saving measure.

Other Expenditure

Other expenses for the year FY21 stood at Rs. 2,207 lakhs as against Rs. 2,939 lakhs in FY 20 mainly on account of saving of Advertisement Expenses. Also, expenses have reduced on account of cost saving measures adopted by the company.

Finance Costs

Finance costs have decreased by Rs 777 lakhs down on account of interest cost on borrowings.

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses decreased by 1,560 lakhs on account of de-recognition of ROU asset.

Profi t After Tax

The profi t/(loss) after tax is Rs. (3,004)lakhs for F. Y 2021 as compared to profi t after tax for Rs. (5,230) Lakhs for the F. Y 2020.

SOURCE OF FUNDS

Share Capital

The equity share capital remains same for Rs. 7222.81 Lakhs during the year under review.

Other Equity

Other equity decreased by Rs. 2,976 Lakhs from Rs 9,626 Lakhs as on March 31, 2020 to Rs. 6,650 Lakhs as on March 31, 2021 largely on account of Net loss incurred during the year.

Non-Current Liabilities

Non current liabilities decreased by Rs. 3,142 Lakhs from Rs 7,881 Lakhs as on March 31, 2020 to Rs. 4,739 Lakhs as on March 31, 2021 largely on account of other financial liability on account of IND-AS 116.

Current Liabilities

Current liabilities increased by Rs. 916 Lakhs from Rs 11,187 Lakhs as on March 31, 2020 to Rs. 12,103 Lakhs as on March 31, 2021 largely on account of increase Business Creditors.

APPLICATION OF FUNDS

Non-Current Assets

Non-Current Assets decreased by Rs 6,597 Lakhs from Rs 23,891 Lakhs as on March 31, 2020 to Rs 17,294 Lakhs as on March 31, 2021, mainly on account of derecognition of right-of-use asset, reclassifi cation of non current loans given becoming current in nature and reversal of deferred tax asset.

Current Assets

Current assets increased by Rs 1,396 Lakhs from Rs 12,026 Lakhs as on March 31, 2020 to Rs 13,422 Lakhs as on March 31, 2021, mainly due to reclassifi cation of non current loans given becoming current in nature.

HUMAN RESOURCES

Well educated, qualifi ed and experienced personnel are the strength of the Company. The HRD policies place emphasis on providing trainings and upgrading skills not only for keeping pace with the growth and development of the Company but also for providing opportunities of value addition to its personnel. Appropriate training programs, workshops and seminars are conducted and all e3 orts are made to provide an ambient and healthy work culture. As at 31st March 2021, the total number of employees on the roll of the Company stood at 410.

CAUTIONARY STATEMENT

Some statements in this Report are forward looking statements and are based on the optimism that the massive e3 orts of the Central Government, State Government and determination of the people of the Country would soon overcome the battle against Covid-19, and that the Country’s and global economy both move once again towards sustainable growth. The Company’s performance is based on these caveats and it is therefore cautioned that the actual results may di3 er from those set out or implied herein.