Zee Learn Ltd Management Discussions.

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 reaffirm a credible commitment to sustainable policies and undertake the reforms necessary to buttress long-term prospects. Global coordination and cooperation will be critical. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020—the deepest global recession in eight decades, despite unprecedented policy support. Per capita incomes in the vast majority of emerging market and developing economies (EMDEs) are expected to shrink this year, tipping many millions back into poverty. The global recession would be deeper if bringing the pandemic under control took longer than expected, or if financial stress triggered cascading defaults. Since EMDEs are particularly vulnerable, it is critical to strengthen their public health care systems, to address the challenges posed by informality and limited safety nets, and, once the health crisis abates, to undertake reforms that enable strong and sustainable growth.

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 corporate sectors 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 Q1FY21.

Sector Review - Education Sector

Indias education sector offers a great opportunity with approximately 29 per cent of Indias population in the age group of 0 to 14 years. Education sector in India is expected to reach US$ 180 billion in FY20. Indias higher education segment is expected to increase to Rs 2,44,824 crore (US$ 35.03 billion) by 2025. India was ranked 34 among the 100 countries in English Proficiency Index 2019. Increasing internet penetration is expected to help in education delivery. As of December 2019, internet penetration in India reached 54.29 percent.

As per the Indian Education sector report of September 2020, India has over 250 million school going students, more than any other country. It also has one of the largest networks of higher education institutions in the world. 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 2018-19. Gross Enrolment Ratio in higher education reached 26.3 per cent in FY19.

Education sector in India remains to be a strategic priority for the Government. The Government has allowed 100 per cent Foreign Direct Investment (FDI) in the education sector through the automatic route since 2002. Total FDI inflow in Indias education sector stood at US$ 3.24 billion between April 2000 to March 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT). In India, the edtech market is expected to reach ~US$ 3.5 billion by 2022; received investments worth ~US$ 1.1 billion in 2020.

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, Affordability 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 3,000 crore (US$ 429.55 million). Press Release: PIB

Impact of COVID-19 on Indian Education sector

In the beginning of 2020 the world faced a severe impact of COVID -19. The education sectors of India as well as world are badly affected by this. It has enforced the world wide lock down creating very bad effect on the students life. Around 32 crore learners stopped to move schools/colleges and all educational activities halted in India. The education sector has been fighting to survive the crisis with a different approach and digitising the challenges to wash away the threat of the pandemic. However, the outbreak of COVID-19 has taught us that change is inevitable. It has worked as a catalyst for the educational institutions to grow and opt for platforms with technologies, which have not been used before. Impact of Pandemic COVID-19 on Education in India- Researchgate

The pandemic has changed the way of learning and has also impacted quality of the education. For one, virtual methods cannot replicate the atmosphere of a physical classroom. Real-time teacher-to-student and student-to-student interactions in a physical setting are part of the learning experience. The spontaneity enables teachers to present the full scope of the subject being taught. Such an interaction is hardly possible when both teachers and students are physically apart and interacting from behind a computer or mobile phone screen.

According to the study conducted by Unicef, the disruptions to everyday life mean that many young children are at home unable to attend early childhood education and care and are therefore now entirely reliant on their caregivers for nurturing care and to meet all of their developmental needs (physical, emotional, social and cognitive). This added burden on families to balance childcare and work responsibilities, compounded by economic instability and social isolation in many cases, is fertile ground for home environments characterized by toxic stress. We know that optimal brain development requires a stimulating and enriching environment, adequate nutrition, learning opportunities and social interaction with attentive caregivers. Under the current pandemic context, access to these opportunities will likely be severely restricted, compromising the healthy developmental trajectory of many children. Unsafe conditions, negative interactions and lack of educational opportunities during the early years can lead to irreversible outcomes, which can affect a childs potential for the remainder of his or her life.

Preschool:

The Indian preschool market has witnessed healthy growth in recent years. Looking forward, the preschool market in India is projected to grow at a CAGR of around 18% during 2020-2024. The growth of the Indian preschool market is driven primarily by factors such as rising parent awareness for early childhood education and care, coupled with rising number of nuclear families and working women in the country. As both parents in the family are bound to be occupied with their professions, pre-schools offer a reliable system to ensure that the childs growth is not hindered due to the absence of parents.

Moreover, factors like increasing disposable income of parents and rapid urbanization has led to a rise in brand consciousness and penetration of international preschools in the country. This has resulted in the development of innovative and advanced infrastructures as well as quality education programs for preschools across the country. Additionally, with expansion in tier 2 and tier 3 cities and escalation of franchise numbers in untapped areas, the number of preschool/child care centres have significantly increased. The Government of India has also launched the National Early Childhood Care and Education (ECCE) policy, promoting pre-schooling for children in low- income households of the country. PR newswire-The preschool childcare market in India 2024

K-12

As per the recently released Household Social Consumption on Education in India Report, the aggregate household spend on private schools is approximately Rs. 1.75 lakh crore. Also, about 50% of the total school enrolments are in private school.

The Government too has introduced several initiatives to improve the quality of education and FDI in educational sector is further steering the growth in the Indian school market. Additionally, technology advancements in the method of teaching along with involvement of government and private institutions is creating opportunities in the education sector.

According to the India K-12 Market report 2019, Digital learning modules such as e-learning and m-learning have also revolutionized the segment over the past few years. Government initiatives to modernize the sector have also gained ground with private players and entrepreneurs undertaking investments to strengthen their position in the Indian K-12 market.

Higher Education

Indias higher education system is the worlds third-largest in terms of students, next to China and the United States. The sector has witnessed a tremendous increase in the number of Universities/University level Institutions & Colleges since independence. The Gross Enrolment Ratio (GER) of India in higher education is only 25.2% which is quite low as compared to the developed and other major developing countries. The college density (number of colleges per lakh eligible population) varies from 7 in Bihar to 59 in Telangana as compared to All India average of 28. Most of premier universities and colleges are centred in a metropolitan and urban city, thereby leading to the regional disparity in access to higher education. It is estimated that the Indias higher education segment will increase to Rs 2,44,824 crore (US$ 35.03 billion) by 2025. Higher Education in India- DrishtilAS

Coaching and Test Prep Industry:

As per the research reports, market size of coaching classes in India is expected to reach USD 500 million by 2022. The coaching classes market is primarily driven by increase in number of students pursuing higher education and professional courses. Furthermore, rising preferences for the high quality education among the parents has driven the demand for coaching centers in the recent years. However, one of the key restraining factors is the lack of infrastructure for private coaching centers. Further strict regulation about the private coaching classes is another factor that restricts the growth of the private coaching centers. However, the impact of these restraining factors is minimal. Several government initiatives to promote the skill development and create employment opportunities are expected to provide opportunities for the new players to enter the coaching classes market over the forecast period. Moreover, 100% FDI approval by Govt, of India in education sector is anticipated to attract several international players to enter the Indian market in thenearfuture.

Training and Capacity Building:

The World Development Report On Education (2018) states that "teacher skills and motivation both matter" and that individually-targeted, continued training is crucial to achieving learning improvements through teachers. Education forms the foundation of an equitable society. Quality education will turn the children and youth of the country into competent individuals and responsible citizens. It will equip them with the necessary mindset, values, skills, and knowledge. A country that successfully imparts high-quality education enjoys myriad benefits, and many countries in the world have already set the example. However, a dark shadow often looms large on the way to attaining quality education for the children of our country.

And it is the lack of well-trained quality teachers. Lately, there has been a growing realization among people which has brought out this truth. We understand that merely sending our children to schools will not ensure quality learning for them. The quality of an education system relies substantially on the quality of the teachers and the principals.

Immense growth potential:

• The Indian education sector is set for strong growth, buoyed by a strong demand for quality education.

• As per Union Budget 2020-21, the Government proposed Ind - SAT under the Study in India scheme to be held in Asian and African countries

Policy Support:

• The Department of School Education and Literacy launched Samara Shiksha programme for schools from pre-school to class 12th, providing quality education at all levels

• Education sector in India remains to be a strategic priority of the Government. Skill India mission is aimed at skilling around 400 million youths in the country by 2022

• In October, 2019, NCERT added in its curriculum that teaching at preschools will be in mother tongue and with no homework

• In 2020, Government launched PM eVIDYA, a programme for multi-mode access to digital education. Other initiatives to be launched include Mandodarpan, New National Curriculum and Pedagogical framework, National Foundational Literacy and Numeracy Mission

Government Initiatives:

• An estimated investment of US$ 200 billion is required to achieve the governments target of 30 per cent GER from the education sector by 2020.

• Under Union Budget 2020-21, the Government proposed apprenticeship embedded degree/diploma courses by March 2021 in about 150 higher educational institutions.

• DIKSHA(Digital Infrastructure for Knowledge Sharing) a national platform for school education introduced for all states and the central government for grades 1 to 12. Accessible from both the web-portal and mobile application, DIKSHA is the ‘one nation; one digital platform that offers a humungous source of e-Content through Energized Textbooks (ETBs).

• Swayam Prabha TV Channels: DTH channels are meant to support and reach those who do not have access to the internet. 32 channels are devoted to telecast high-quality educational programmes by the MHRD

Road Ahead

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

Education sector has seen a host of reforms and improved financial outlays in recent years that could possibly transform the country into a knowledge haven. With human resource increasingly gaining significance 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 NTs and IIMs 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 tocome. IBEF Indian Education Sector Report-Sep20

Swot Analysis done considering the impact of COVID-19 on the education industry.

Strength

1. Redefining purpose of education

2. Developing critical approach

3. Adopting different strategic approach for learning

4. Upskilling to newtechnology and resources

Weakness

1. Lackofinnovativethinking

2. Inadequate infrastructure

3. Untrained teachers

4. Unequal accessibility

5. Exam-centric assessment

Opportunity

1. Great opportunity for Blended learning & personalized education

2. Reskilling & Upskilling will gain momentum

3. Huge population of Gen Z

4. Easy availability of resources online

Threat

1. Digital learning not popular as compared to other developing countries

2. Few resources for upgradation of skills

3. Digital divide

Business Performance Review

PREK

Kidzee is a pioneer in Early Childhood Care and Education. It is the largest preschool chain in Asia with more than 2000 operational preschools in over 750 cities across India and Nepal. Kidzee since inception has touched the lives of more than 1 Million happy children.

All Kidzee Programs being age appropriate, integrate a cohesive learning pedagogy. Our Pedagogy, Interactive iLLUME, is designed to help children discover their unique potential and own individual learning style. At Kidzee, children are facilitated to realise their unique abilities in a systematic, synergetic, and self-paced manner and well supported to achieve the desired learning outcomes in sync with high level social, emotional, linguistic and other developmental milestones.

Kidzee is driven by ethos of "Whats Right For the Child" (WRFC), the human right of a child is premium. The right to trust, the right to gain respect and the right to live in an abuse free world is what shapes Kidzee fundamental cult and ethos. the country. Company offers Kidzee franchise to local education entrepreneurs, especially women, to run and manage Kidzee preschools.

As per the KIDZEE franchise model, The Kidzee Business Partner bears the establishment costs and pays one-time franchise fees. They also pay royalty per student under a revenue share agreement and child kit fee to the franchisor. The franchisees are provided with appropriate curriculum, content, illume materials, child kits and other support services like Teacher Training, CounsellorTraining, and Education Delivery.

In FY 20, Kidzee launched an exclusive "Kidzee Day Care" Program. It is observed that nuclear families are growing at a very fast moving pace. Both working and young parents had a need to let their children be in safe hands after school as well. Catering to their requirement, Kidzee bought in a structured and well-designed day-care program to provide a second home for children. The child is not just left to eat, play and sleep but has a further overall development in speech, physical, mental, emotional skills and also learn important life skills. This program is well curated with lot of developmental activities keeping in mind children feel at Home even when they are away from Home.

K-12

Mount Liters Zee Schools (MLZS) were born out of the cherished desire to provide holistic and all rounded education to children that prepares them for the core skills of the 21st century in tandem with the Sustainable Development Goals (SDGs) as slated by UNESCO.

The DNA of the pedagogy at MLZS is evolved out of the most child centric aspect of learning coined as WRFC i.e. "Whats right for the child". The mission and vision of the MLZS is reflected in our well thought out curriculum amalgamated with the credits of student friendly Blended Learning Design (Lesson Plans), Student Leadership Programs, Digital Citizenship Program, Financial Literacy Program, Technology enabled Classrooms that focus on children to become confident Global Citizens. Our students are groomed upon various soft skills of problem solving, creativity, growth mindset and analytical thinking in order to face the challenges that are beyond the circumference of the textbooks and school by engaging them in activities interwoven in the daily teaching learning process.

Educators and school leaders at MLZS undergo regular planned training that would keep them abreast with the latest pedagogical advancements in the education industry so as to focus on impactful positive curriculum transactions in the classrooms and create MLZS as a 21 st century learning space. Taking this ahead in alignment with the tech enabled platform, MLZS introduced an online Teacher Training Program which has trained 2000+ educators and leader educators as per a well-defined need analysis framework packaged with modules of subject specific, child protection, pedagogical .leadership and inclusive education.

An empowered school leader would make a school successful in all spheres and keeping this thought in mind we have conducted a two-day Principal Leadership Conclave 1.0 for our Principals wherein they were elucidated with leadership strategies, PDCA(Plan, Do, Check, Act) model of work environment, data driven analysis of all fractions of school processes and distributed leadership techniques.

Lesson plans which are termed as BLDs (Blended Learning Design) are a backbone for an impactful curriculum transaction in classrooms, BLDs are well designed with constructivism and collaborative teaching strategies that assist educators at MLZS to create a holistic and application based learning space justifying the mission and vision of MLZS. In the era of smartphones and augmented learning, we at MLZS have a interesting e Learning platform and App that has been a source of interactive videos, varied quizzes, worksheets, assessments so that students and educators discover various methods of learning and teaching.

With an objective of reinforcing the values of respect, integrity, honesty, patriotism along with the regular classroom teaching and learning practices, our students are regularly sensitized through Sanskaar, a bouquet of activities that bring in the awareness of strong values among the Mount Literans and they obviously enjoy the paradigm credits of Sanskaar. In the continuity of legacy of Sanskaar at MLZS, an Essay writing competition was announced on Gandhi Jayanti with topics that invoked the essence of patriotism among the Mount Literans from all over India, the winners and participants were presented with a token of appreciation to encourage the fervor of patriotism.

To promote media literacy, reading skills and vocabulary building among the students, MLZS introduced its own fourth estate, "The Literati", newsletter that has been appreciated by the students, educators and parents at MLZS, thereby honing the logical thinking skills and creative writing skills with Mount Literans.

In order to take this unique learning system to the masses, the company partners with local educational trust from across the country who share the companys passion in furthering the cause of effective and inclusive education, to all. The company provides hand holding to its partners in various areas of school management be it infrastructure planning & development, staff recruitment & training, sales & marketing, affiliation & statutory compliances. The range of services and solutions provided by the company to its partners also includes Student Learning Resources, Blended Learning Curriculum, Teaching Materials and Assessments

In FY 20 the Company partnered with 8 new Educational Trust to set up MLZS in various parts of the country and made 2 more Mount Litera Zee Schools operational taking the total count to 130 +.

HIGHER EDUCATION -HZU

In Higher education, we have a service agreement with the leading UGC approved state private university in Dehradun called the Himgiri Zee University (HZU). HZU is built on a 50-acre pristine campus and has a 7 thriving schools of Engineering & Sciences; Management & Law; Agriculture & Forestry; Education & Social work; Mass communication, Journalism and Film Making; Clinical Research & Pharmaceutical Sciences and Vocational studies, it has been awarded last year as the Best Private University in Dehradun by ICCI.

VOCATIONAL EDUCATION

Vocational education helps the youth of the country to enhance their employability through skill development along with their formal education. The success of a nation always depends on the success of its youth and to meet this objective, Zee Learn offers industry ready programs through its Vocational Education brands namely Zee Institute of Creative Art (ZICA), Zee Institute of Media Arts (ZIMA) and Zee Institute of Design Art (ZIDA).

Zee Institute of Creative Art (ZICA) is Indias first full-fledged Classical and Digital Animation Training Academy that offers vocational programs in Animation, Visual Effects, Gaming, Graphics and Web Design. With the addition of four new centers, ZICA now has a network of 22 centres present in 18 cities including Mumbai, Delhi+NCR, Kolkata, Bengaluru, Hyderabad, Chennai, Pune, Vadodara, Indore, Chandigarh, Bhubaneshwar, Nashik, Jaipur, Nagpur, Mangalore, Guwahati, Ranchi and Darbhanga. ZICA focuses on the application of principles of art and design and fundamentals of animation to computer based digital animation and web design. ZICA training centers are equipped with high-end animation tools, 2D animation facilities, 3D software, Visual FX Labs and Imaging Technologies. ZICA is the affiliated training partner of Media & Entertainment Sector Council (MESC). ZICAs placement cell provides placement assistance to all ZICA students across the country. ZICA students have been placed in production studios like Double Negative, Prime Focus, COSMOS Maya, Famous Studios, Creative Box, INNOV Reality, Contiloe Films, Redchillies VFX, Rockstar Games. ZICA has launched one of its kind online learning platform for its students "E-Studio to enhance their knowledge and skills.

Zee Institute of Media Arts (ZIMA), a Film Making & Media training institute, offers professional courses in Film Making, Direction, Acting, Screenwriting, Production, Cinematography, Sound Recording, Editing, TV Journalism, Voicing & TV Presentation and other related fields for a successful career. ZIMA is Indias first Steinberg Certified Center for Sound Recording & Design programs and students are trained by Steinberg Certified trainers. ZIMA is present in Mumbai, Noida and Jaipur and has launched their new center in the City of Joy - Kolkata. ZIMA has produced more than 2000 professionals who are currently working in the Media & Entertainment industry. The pedagogy adopted by ZIMA Film School for the students involve platforms like Film Appreciation, Master Mantra, ZIMA Premieres, ZIMAFilm Club and ZIMA Dialogues for enhanced learning.

ZIMA& ZICAhad conducted during FY20, Masterclass sessions and guest lectures by various industry professionals like Mr. Abinav Kant Chaturvedi (Bollywood actor having worked in TV Serial - Hum Log and movies like Saudagar, Suryavanshi), Ms. Madhuri Kalal (Deputy Executive Producer, ZEE Hindustan), Ms Aditi Tyagi (Deputy Editor, ZEE News), Mr. Pervez Khan (Bollywood Action Director & Stuntman), Ms Pooja Makkar (Editor— Delhi Bureau, ZEE News), Mr. K. Sethuraman (renowned Sound engineer & Acoustic Designer), Mr. Vijay Dayal (Sound Engineer, YRF Studios), Mr. Jagjeet Singh (3D Artist & AR/VR Developer), Mr. Hemant Shinde (3D Stereo, VFX & CG Film Supervisor).

Zee Institute of Design Art (ZIDA) was launched in FY 19-20 and offers vocational career programs in Fashion Design and Interior Design and creating design professionals. ZIDA also offers Test Prep programs assisting students to qualify in the entrance tests to top most design schools like NID, NIFT, IIT-IDC.

AESTHETICS 2020 - the annual youth conclave organised in Jan 2020 saw yet another massive participation of students from all ZICA & ZIMA centers across the country. The conclave was graced by the industry luminaries and has seen an august gathering of industry professionals from Shemaroo Entertainment, Adobe, Autodesk, Reliance Animation, UNITY and COSMOS Maya. The industry veterans adjudged the winners of the various categories of student competitions during the conclave.

MANPOWERTRAINING

Corporate today spend substantial time and resources to train their employees, and most seek external help from training organizations to train their new joiners. Corporate look for the external training/skilling help to train their employees on general skills for which the outcome is difficult to measure. Even after such trainings, companies invest time & resources to get employee productive.

In this changing world of workplaces, customers today need to partner with forward looking people management partners, who would help them to source and retain inspired, trained, and motivated workforce across geographies, quickly and sustainably. Liberium, a part of Zee Learn Limited helps organisations with Human Resource Management, skilling and training. The company that has come up with innovative workforce solutions that effectively connects people potential to business requirements of organizations.

Liberium provides essential services around training, temporary staffing, lateral hiring, human resource business process outsourcing and ensures quality services by imparting better hiring, quick backfilling, soft skill training, better understanding of customer needs, absolute adherence to compliance, quick turnaround time on associate / customer queries, extending legal support to safe-guard customers interests, besides other general service elements. Liberium was recognised for its efficient services at the Human Resource Vendors Awards 2020.

TEST PREP/TUTORIALS

For over two decades, Mahesh Tutorials has been mentoring students for success in academics and in life. The company helps students with Secondary Education & foundation courses for competitive exams. Today Mahesh Tutorials is a market leader in the Test Prep and coaching sector along with brands like Lakshya, MT Science, MT Commerce, Mahesh PU College, Sri Gayatri Academy and Aryan Foundation. The courses designed at Mahesh Tutorials helps aspirants with Technology Aided Teaching techniques, result-oriented methodologies and a personalized guidance approach to bring out the best in them and achieve outstanding results.

FINANCIAL REVIEW - CONSOLIDATED RESULTS

During FY20, the Company signed 330 new Kidzee Pre Schools and 8 Mount Litera Zee Schools, expanding its network to more than 750 cities in India. The Company strengthened its leadership position in the school segment with over 2000 Kidzee Pre-Schools and 130+ Mount Litera Zee K12 Schools. Through network of pre-school centres, K-12 schools and Youth centres, the Company served 230,000+ students during FY20.

Income

The Companys total income increased by 1.3 per cent to Rs55,638 Lakhs in FY20 from Rs 54,925 Lakhs in FY19.

Expenditure

Total expenditure increased to Rs 46,959 Lakhs in FY20 from Rs 43,473 Lakhs in FY19.

Operational Expenses

Operational expenses decreased to Rs 13,754 Lakhs in FY20 from Rs 14,537 Lakhs in FY19.

Employee Benefit Expenses

Employee benefits expenses increased to Rs 14,138 Lakhs in FY20 from Rs 13,981 Lakhs in FY19 on account of annual salary hike.

Other Expenditure

Other expenditure decreased by 10 per cent to Rs 6,752 Lakhs in FY20 from Rs 7,435 Lakhs in FY19 largely on account of reduction in Marketing, advertisement and publicity expenses, travelling and conveyance expenses and legal and professional expenses.

Finance Costs

Finance costs increased to Rs 5,905 Lakhs in FY20 from Rs 4,731 Lakhs in FY19 on account of INDAS adjustment of Lease

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses increased to Rs 6,411 Lakhs in FY20 from Rs 2,789 Lakhs in FY19 on account of IND AS adjustment of Lease

EBIDTA

The EBIDTA increased by 7 per cent to Rs 16,839Lakhs in FY20 from Rs 15,771 Lakhs in FY19.

EBIDTA % to Operating Revenue increases to 33 per cent in FY 20 from 30 per cent in FY19.

SOURCEOFFUNDS

Share Capital

The equity share capital increased by Rs 0.14 lakhs fromRs 3,260.79 lakhs as on March 31, 2019 to Rs 3,260.93 lakhs as on March 31, 2020 on account of issuance of equity shares to employees under employee stock ownership plan.

Other Equity

Other equity saw an increase ofRs 3,963.42 Lakhs fromRs 39,853.77 Lakhs ason March 31, 2019 to Rs 43,817.19 Lakhs as on March 31, 2020 largely on account of Net Profits earned during the year.

Non-Current Liabilities

Non-Current liabilities saw an increase of Rs 2,885 Lakhs from Rs 57,063 Lakhs as on March 31,2019 to Rs 54,178 Lakhs as on March 31,2020

Non-Current Financial Liabilities

Financial Liabilities saw an increase of Rs 171 lakhs from Rs 35,082 Lakhs as on March 31,2019 toRs 35,252 Lakhs as on March 31,2020 majorly on account new INDAAS adjustment of Lease liabilities.

Non - Current Other Liabilities

Other Liabilities saw decrease of Rs 3,056 Lakhs from Rs 21,982 Lakhs as on March 31, 2019 to Rs 18,925 Lakhs as on March 31, 2020 largely on account of discounting of security deposit received at present value as per INDAS.

Current Liabilities

Current liabilities saw an increase ofRs 5,141 Lakhs from Rs 29,622Lakhs as on March 31,2019 toRs 34,763 Lakhs as on March 31,2020 on account of new INDAS adjustments of Lease liabilities.

APPLICATION OF FUNDS

Non-Current Assets

Non-Current Assets saw a net increase of Rs 10,374 Lakhs from Rs 126,602 Lakhs as on March 31,2019 to Rs 136,976 Lakhs as on March 31,2020 on account of new INDAS asset created as Right of Use asset.

Current Assets

Current assets saw a decrease ofRs 6,028 Lakhs fromRs 21,302 Lakhs as on March 31,2019 to Rs 15,274 Lakhs as on March 31,2019 largely on account regrouping of loans.

STANDALONE RESULTS

Income

The Companys total income achieved at Rs 21,831 Lakhs in FY20 from Rs 22,662 Lakhs in FY19.

Total Expenditure

Total expenditure decreased by 9.5 per cent to Rs 12,715 Lakhs in FY20 from Rs 13,993 Lakhs in FY19 largely on account of operational cost and other expenses.

Operational Expenses

Operational Expenses decreased by 30 per cent to Rs 3,365 Lakhs in FY20 from Rs 4,826 Lakhs in FY19 commensurating to decrease in sales.

Employee Benefit Expenses

Employee benefits expenses increased by 4 per cent toRs 3,059 Lakhs in FY20 from Rs 2,952 Lakhs in FY19 on account annual salary hike.

Other Expenditure

Other expenditure decreased by 22.8 per cent to Rs 2,967 Lakhs in FY20 from Rs 3,841 Lakhs in FY19 largely on account of Ind AS impact towards rental charges and reduction of freight cost and legal and professional charges.

Finance Costs

Finance costs increased by 23 per cent to Rs 2,452 Lakhs in FY20 from Rs 1,997 Lakhs in FY19 on account of IND AS adjustment.

Depreciation and Amortisation Expenses

Depreciation and amortisation expenses increased by 131 per cent to Rs 872 Lakhs in FY20 from Rs 377 Lakhs in FY19 on account of Ind AS adjustment.

EBIDTA

EBIDTAincreases 7 per cent at 10,046 lakhs in FY20 from 9,359 lakhs in FY19.

EBIDTA% to operating revenue increases to 51.68 per cent in FY20 from 44.61 percentinFY19

Profit After Tax

The profit after tax increased by 11 per cent to Rs 6,862 Lakhs in FY20 fromRs 6,170 Lakhs in FY19.

PAT % to operating revenue increases to 35.30 per cent in FY20 from 29.41 percentinFY19.

SOURCE OF FUNDS

Share Capital

The equity share capital increased by Rs 0.14 Lakhs from Rs 3,260.79 Lakhs as on March 31,2019 to Rs 3,260.93 Lakhs as on March 31,2020.

Other Equity

Other equity saw an increase ofRs 6,477 Lakhs from Rs 38,015 Lakhs as on March 31,2019 to Rs 44,492 Lakhs as on March 31,2020 largely on account of Net Profits earned during the year.

Non-Current Liabilities

Non-Current liabilities saw a decrease of Rs 860 Lakhs from Rs 21,703 Lakhs as on March 31,2019 to Rs 20,842 Lakhs as on March 31,2020.

Non - Current Financial Liabilities

Financial Liabilities saw an increase ofRs 498 Lakhs fromRs 13,236 Lakhs as on March 31,2019 toRs 13,734 Lakhs as on March 31,2020 on account of INDAS adjustment.

Non - Current Other Liabilities

Other Liabilities saw a decrease of Rs 1,359 Lakhs from Rs 8,467 Lakhs as on March 31, 2019 to Rs 7,108 Lakhs as on March 31, 2020 largely on account of discounting of security deposit received at present value as per INDAS.

Current Liabilities

Current liabilities saw an increase of Rs 2,153 Lakhs fromRs 13,780 Lakhs as on March 31,2019 to Rs 15,933 Lakhs as on March 31,2020 on account ofINDAS adjustment.

APPLICATION OF FUNDS

Non-CurrentAssets

Non-Current Assets saw a net increase of Rs 17,714 lakhs from Rs 52,322 Lakhs as on March 31,2019 to Rs 70,036 Lakhs as on March 31,2020 on account new INDAS asset created as Right of Use asset.

CurrentAssets

Current assets saw a decrease of Rs 9,944 Lakhs from Rs 24,437 Lakhs as on March 31,2019 to Rs 14,493 Lakhs as on March 31,2020 on account of regrouping of loans.

Internal Controls

The company has in place adequate internal control systems, commensurate with its size and nature of operations so as to ensure smoothness of operations and compliance with applicable legislation. The company has a well-defined system of management reporting and periodic review of business to ensure timely decision-making. Internal audit is conducted by professionally qualified financial personnel, which conducts periodic audits/review to maintain a proper system of checks and control. The management information system (MIS) forms an integral part of the companys control mechanism. All operating parameters are monitored and controlled. Any material change in the business outlook is reported to the Board. Material deviations from the annual planning and budgeting, if any, are reported to the board on quarterly basis.

HUMAN RESOURCE

The HR strategy of Zee Learn is aligned with the overall strategy of the company. Zee Learn hires the best fit talent to meet the current and future requirements of the business. We continue to improve our talent acquisition processes to effectively support our business strategy. Zee Learn has built a progressive people environment which fosters a culture of meritocracy with an emphasis on caring for employees. The high calibre talents are identified, developed and rewarded to make them committed and capable of achieving Zee Leams business goals.

At Zee Learn the employee engagement efforts are inclusive and empowering. We believe that an informed workforce is an empowered workforce. To enable employees, contribute effectively to organization growth, we have in place various channels that create awareness, foster dialogue, and provide opportunities for them to give feedback.

Zee Learn in the FY19-20 was recognised as the Great Place to work and has been consistently recognised as the Dream Company to Work For by World HRD Congress establishing itself as an Employer of the Choice in the industry.

Corporate Social Responsibility (CSR)

CSR at Zee is all about creating sustainable programs that actively contribute to and support the social and economic development of the society. In line with this intent, your Company has adopted a unified approach towards CSR at Essel Group level, wherein CSR contributions of eligible Essel group entities are pooled in, to fund high cost long-term projects that help build Human capital and create lasting impact on the society

Through the year, Kidzee continued its commitment of standing for Whats Right For Child through its Child Abuse Prevention initiative I Care. A module designed to educate and sensitize adults about child abuse, it teaches to recognize incidence and prevent it further. As a policy, all adults in the centre including teachers and support staff are trained under I Care. Zee Learn aims to create an abuse-free and nurturing environment for every child.

Key Ratios

Ratios where there has been significant changes from FY19 to FY20

Consolidated Ratio
FY20 FY19
Debtors Turnover Ratio 8.63 15.30
Inventory Turnover 8.92 12.93
Interest Coverage 1.77 2.74
Current Ratio 39.47% 62.65%
Debt Equity Ratio 58.33% 70.51%
Operating Profit Margin 20.26% 25.10%

For the purpose of calculation, Average Debtors (Average of opening and closing) and Average Inventory (Average of Opening and Closing) has been considered.

Ratios where there has been significant changes from FY19 to FY20

Standalone Ratio
FY20 FY19
Debtors Turnover Ratio 9.52 13.76
Inventory Turnover 2.18 4.29
Interest Coverage 3.74 4.50
Current Ratio 89.93% 170.12%
Debt Equity Ratio 37.37% 43.90%
Operating Profit Margin 47.20% 42.81%
Net Profit Margin 35.30% 29.41%

For the purpose of calculation, Average Debtors (Average of opening and closing) has been considered.

The changes has been discussed in detailed in financial analysis

OPPORTUNITIES AND RISK AND CONCERNS

OPPORTUNITIES RISK AND CONCERNS
• Large population with rapid urbanisation, increased disposable incomes and dual working families • Fewer kids will go back to school when schools re-open once the lockdown on schools is uplifted
• Positive approach of the Government towards the education sector • Social distance may lead to some getting ‘socially distant, thus impacting effective learning outcomes
• Launch of National Education Policy and other various schemes across the educational sector * Increased competition form unorganised players restircting increase in fees and compensating for increased expenses
• Huge opportuntiy to tap the rural market * Limited availability of quality teachers
• Blended learning and personalised edcuation becoming a reality
• Reskilling and upskilling gaining momentum

Business Outlook

The Company continues to maintain a strong position in preschool and K-12 business in the FY20. The resilient performance owes to operational capabilities, world class service deliverables, strong franchise network, resource optimization and rich product portfolio. The Companys focus remains on improving business performance while driving synergies across its platforms.

The Company through its varied forays including Early Childhood Care and Education (ECCE), K-12 School Education, Youth and Vocational education, Test Prep and tuition courses is playing a pivotal role in Indias education system. The new initiatives started by the company in last financial year are being well received by the children, parents, franchisee partners and all other stakeholders and the Company is confident that it will continue to grow its business and is committed to create long-term value for its students, parents, franchisees and shareholder.

As the Indian education industry goes through a churn driven by digital disruption, the Company is happy to report that parents are responding positively towards the tech of the network. The Companys investments in research and innovation, deep domain and contextual knowledge, intellectual property and recognitions from relevant industry bodies are key influences to the uninterrupted growth.

Though the outbreak of COVID-19 in mid of March20 marked an unprecedented disruption, the operating margins on the full year basis improved on the backdrop of strong performances during FY20. Despite significant challenges, the Company demonstrated the strength of its operating fundamentals by taking the torch of learning forward without disruption for its network that spans across the country.

The fallout of COVID-19 has been very challenging for the education sector and the rapid transition from classroom to the virtual space was not easy, however, the Company has been successful in meeting the pedagogical and cognitive needs of the students from the safety of their homes, by delivering and executing the blended learning resources and digital content curated by its seasoned academic professionals. During the pandemic the company continued to engage with its stakeholders through various digital tools and engagements. The company is committed to provide support and best services to our business partners during this testing times and is grateful for the confidence and support that the partners have placed on it.

The Company remain highly focused on cash flows and liquidity management and is confident that its broad portfolio of products / services with its ability to execute its commitments will help to navigate through the current economic uncertainties.