Virtual Global Education Ltd Management Discussions.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Overview

"Education is our passport to the future, for tomorrow belongs to the people who prepare for it today."

With education people can gain knowledge and enlarge their view over the world. Honble Prime Minister Mr. Narendra Modi who urges to the youths of India "I called upon the nation to take a pledge to make India the skill capital of the world." To begin with this he has launched ambitious projects that aim to train over 40 crores people in India in different skills by 2022. Prime Minister Narendra Modi has launched the ambitious Skill India Mission as part of the governments "War Against Poverty". Our Company has also taken initiative in this respect and has joined hands with RSLDC and SUDA for providing training in various districts of Rajasthan and Madhya Pradesh.

Our company strives to implement programs with a clear mandate for helping our students and participants build direct and concrete value that will contribute in improving their personal, professional, social and fifinancial status.

Indian Education Sector

The Union Budget 2017 saw mixed reactions for the budget in the Education sector, while higher education and skill developments have received more importance. The Finance Minister of the country, highlighted the governments vision for the year 2022, which focused on the need for improvement in quality of education as well as learning outcomes was also stressed upon and Objective to skill one crore youth in the next three years under the PM Kaushal Vikas Yojna.

This years budget, the Finance Minister announced an allocation of Rs 79,685.95 crore compared to Rs 72,394 crore for last year, which is 9.9 per cent increase in the education budget. Of the total outlay, Rs46, 356. 25 is for the school sector and the rest for higher education. Innovation Fund for secondary education to be created.

The Finance Minister also announced to establish 100 India International centres. It will be launched across the country for the youth to seek jobs outside India.

He also announced launch of SWAYAM platform. By leveraging information technology, the government will offer at least 350 online courses. Access to SWAYAM would be widened by linkage with DTH channels, dedicated to education.

He mentioned about the budget of Rs 2,200 crore for skill strengthening. As many as 3.5 crore youth to be trained under SANKALP programme launched by government. PM Kaushal Kendras to be extended to 600 districts. For imparting new skills to the people in the rural areas, mason training will be provided to 5 lakh persons by 2022, with an immediate target of training at least 20,000 persons by 2017-18.

The total allocation of INR 79,685.95 Cr will play a significant role in the inclusion of the entire education sector from secondary schools to higher education.

Skills Development has the largest impact in the education sector from this Budget. It will lead to job creation at the bottom of the pyramid. The government is investing heavily into sectors like infrastructure, energy, manufacturing, Swatch India, Clean Ganga and Digital India. This means skills-based training to produce industry based ready work talent. 100 India International Skills Centres will be established across the country. These Centres would offer advanced training and also courses in foreign languages. This will help those who seek job opportunities outside the country.

OPPORTUNITIES, THREATS AND OUTLOOK

OPPORTUNITIES

Favourable governments Policies towards education sector

Growing trend of corporate training programme in corporate sector.

THREATS

Entrance of foreign universities in India

Excessive Competition

FUTURE OUTLOOK AND FORWARD LOOKING STATEMENTS

PERFORMANCE

With a steady vision and focused growth strategy, Virtual Global Education Ltd (VGEL) is currently involved in the mission for enhancing the human capital of the country through skill development and employability training. VGEL have been working for years in this field and have trained and provided employment to a large number of youth in the country. VGEL is partnering with various government bodies in fulfilling the Skill India Initiative of Government of India by providing Skill training for more than 1 Million youth in India by 2020.

VGEL was formed with the mission of improving the quality of human capital in the country through skill and educational interventions. VGEL have moved from strength to strength in our path and look forward to continue on our mission. The focus of VGEL has been in delivering skill and educational interventions to the sections of societies and parts of the country where they are most needed and where the youth have limited exposure and lack access to opportunities to achieve their career or livelihood goals.

It has identified sectors linking with the industry to provide training so that they can get real time experience and practical exposure in industry. In choosing the trades and industries special focus has been kept on outcome management and impact mapping and ensuring that the training or skilling results in either wage based employment or higher earnings through self-employment or entrepreneurship. Trades are also chosen keeping in mind the scope of future career and fifinancial growth prospects. Some of the trades catered to are :

Telecom

Retail

Hospitality & tourism

Healthcare

Security

Beauty & Wellness

Solar Power

Agriculture

Electronics

BFSI

Entrepreneurship

VGEL is currently operating in the states with 85 training Centers and targeting to open 150 training centers by March 2018.

VGEL has been working in several states on government projects like Andhra Pradesh KAPU welfare Development Corporation, Electronics System Design & Manufacturing under Ministry of Information

Technology and Electronics System & Manufacturing under the Ministry of Information Technology and Electronics, National Backward Classes Finance & Development Corporation (NBCFDC)is a Govt of India undertaking under the aegis of Ministry of Social Justice and Empowerment, Chhattisgarh State Skill Development Authority, Paschim Banga Society for skill Development, Govt of West Bengal ,Rajasthan State Livelihood Development Corporation.

VGEL has recently opened the Skill Centre kanota Bassi in Jaipur and Bayana in Bhratpur have started to train unemployed youths in Telecom and Information & Communication Technology. The model Retail training center at Howrah West Bengal which has been recently inaugurated have plans to train youths for highly skilled Retail professional jobs.

The company has entered in MOU with various African countries to work in the area of skill development for various sectors like Agriculture, Solar energy, and Sales and distribution to develop under privileged youth in respective countries.

The Companys agenda focuses on providing vocational training and education in developing and rural areas of India, where there is a lack of skilled talent in areas like technology interventions and platforms. With increased competition for jobs and the trend now being on continuous learning, more and more people are enhancing their educational qualifications online. Currently, industries across verticals are adapting to e-learning in a big way and the market is expected to grow.

The company is professionally managed with senior professionals from reputed industries with strong leadership experiences in managing large scale operations across the country with strong educational background.

The objective of VGEL is to enable social development through academic excellence, and the first of its kind in India. In higher education, there is a widening gap between the growing knowledge resources in the world and the conceptual universe of the students. The gap can be bridged by providing training to students.

Risks and Concerns & Mitigations

Regulatory risk

The Companies performance largely depends upon governments policies on education and allocation of budgets towards education. Any adverse change in the government policies towards education and reduction in the allocation of government budget will materially affect the performance of the Company.

Risk mitigation

Regulatory risk is considered as industry-wise risk and the Company being a part of the sector relies upon the statutory proclamations and policies. However, education is considered as a matter of great importance for major governments globally. This sector is a growing sector and therefore mitigates the risk of any likely adverse policy.

Competition risk

The Education sector in our country faces cut-throat competition from developed countries. Large players with richer domain experience and bigger brands are more attractive and appealing. The markets for technology-enabled education products, services and solutions are highly competitive. Therefore, these factors can be act as a hindrance to the growth for the Company.

Risk mitigation

The Company provides products and solutions aimed at management of education as well as delivery of education. It has developed its expertise organically as well as inorganically by forging partnerships with the best companies and institutes. The Companys ability to provide a wide range of products and solutions through various delivery models and in diverse geographies has enabled it to perform against competition.

Technology obsolescence risk

Digitalization is emerging as disruptive forces for customers, buyers and technology, technology coupled with changes in delivery models and consumer spending patterns could be threat on the growth in traditional IT spends and technology obsolescence.

Risk mitigation

VGEL continue to believe in keeping up to the change in terms of technology. The Company has a dedicated R&D unit that caters to the upgradation, implementation and incorporation of latest methodologies, techniques, systems and services to the Companys offerings. It is looking to enter in to

Partnership with the best-in-class technology leaders to understand and offer the latest technology to its clients.

Internal Control System

The Company has adequate system which is commensurate with the nature of its business and the size and complexity of its operations. Management of the company is having very cordial relations with their personnel and outsiders in respect of business of the company. The Company is following relevant Accounting Standards for proper maintenance of the books of accounts of the company and reported properly and applicable statutes, codes of conduct and corporate policies are duly complied with. The Audit committee keeps regular check on the internal control system of the company and reviews the audit reports periodically.

Fifinancial Performance

Particulars 2016-17 2015-16
Total Revenue 375,625,435 363,422,763
Total Expense 341,596,890 329,572,411
Profit Before Tax 34,028,545 33,850,352
Less: Taxation
Current Tax 12,255,075 10,860,084
Deferred Tax 657,107 34,853
Profit After Tax 22,430,577 23,025,121

Human Resource Development

Company always has an encouraging environment that leads to higher caliber and encouragement among employees. The Company contributes to the overall growth and performance of the personnel while adhering to the highest degree of quality and integrity. Company believes that even a single human asset matters irrespective of the place he holds in the contribution towards growth of the Company.

Cautionary Statement

Readers are cautioned that this discussion contains forward- looking statements that involve risk and uncertainties. When used in this discussion, the words anticipate, believe, estimate, expect and will and other similar expressions as they relate to the Company or its business are intended to identify such forward- looking statements. The company undertakes no obligation to publicly update or revise any forward- looking statements whether of because new information, future events or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward looking statements.