Tree House Education & Accessories Ltd Management Discussions.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF OUR COMPANY
Unless indicated otherwise, the following discussion of our financial condition and results of operations is based on the audited financial statements for our Company for Fiscal ended as on 31st. March 2016, including annexures, schedules, and notes thereto and the report thereon appearing in this Annual Financial Statements are prepared in accordance with the Companies Actand Indian GAAP, in each case, to comply with the Accounting Standards and the relevant provisions of the Companies Act 2013.
We believe we are one of the leading providers of educational services in India. We are the largest player in terms of selfoperated pre-schools in India (Source: CRISIL Report - December 2014).. As of March 31 2016, we had 636 pre-schools across 96 cities in India operating under the brand names of "Tree House", "Brainwork" and "Global Champs". As of March 31 2016, we had 536 pre-schools which were self-operated pre-schools, and 100 pre-schools were operated through our franchisees. Our pre-schools serve students, primarily in the age group of 1.5 to 6 years. We have also branched into providing educational services to K-12 schools and as of March 31,2016, we provided such services to 18 K-12 schools on exclusive basis and 6 k-12 School on non-exclusive basis, across 3 States in India.
In our pre-schools, we offer standardized services and teaching methodologies. We offer playgroup, nursery, junior kindergarten and Senior kindergarten courses. We also offer vacation camps, hobby classes, day care facilities and teacher training course at some of our self-operated pre-schools. As of March 31, 2016, we have a team of more than 2,000 teachers at our self-operated pre-schools. We provide continuous training to all our pre-school teachers on teaching methodologies and early child care, to keep abreast with the changes in teaching methods and student needs. Our pre-school network is largely concentrated in the states of Maharashtra, Gujarat, Karnataka, Rajasthan, West Bengal and Andhra Pradesh.
We provide a wide variety of educational services to K-12 schools which include, designing curriculum and providing teaching aids, supplying methods for imparting education, organising extra-curricular activities for students and teacher training. As on March 31,2016 we provided educational services to 18 K-12 schools on exclusive basis and 6 k-12 School on non-exclusive basis, across 3 States in India.
The Brand is owned by the company and hence, theres no royalty sharing - this is an attribute that consolidates its positioning and increase its competitive advantages in the market. This enables it to increase its earnings per centres based on a self-operating model.
The company possesses advantage of scale - this enables it to leverage its operative costs and ad spends more efficiently, thus allowing it to break even with lower students per centre. More student enrolments also bring about higher EBlTDAmargins.
The company is able to attract a superior talent pool of teachers by giving them the advantage of working directly with it.
The company is able to turn in positive free cash flow with low earning fluctuation and higher return on Capital (ROC).