MANAGEMENT DISCUSSION & ANALYSIS Plants ore shaped by cultivation and human by education. The education is a lifelong process which creates an understanding ol moral and ethical values to guide one's lite and make il productive- Al Career Point, we trope in create an environment of reverence of education to build a long lasting and promising career of our students. Our students rebrsent our hopes and dreams. We are proud to be working with them to ensure that they are given the night knowledge to face the challenges of future. Student, faculties and the company management are a team and complement each other's efforts. The core objective is to provide a highly conducive environment of learning to students so they utilize their full potential while convening their dreams in to success. As an integrated learning solution provider, Career Point has brsence across the education value chain. As a diversified education company, it operates in bolh, the formal and informal streams of education throughout the life cycle of a student (K.C. to PhD). Over the last two decades, Career Point has built a strong foundation of academic excellence and become a pioneer in the field of education With leveraging on its strong brand equity and the management's rich experience in the sector, CPL has emerged from the traditional classroom tutorial services provider to a complete world of education In the Informal Education system, Career Point has established a strong niche in test brparation for Pre-enginemen, Pre medical and other competitive examinations along with school curriculum tutoring through a nationwide extensive network of. • Company operated branches; • Franchisee centers, • Online courses; • School integrated programs; and Distance learning solutions In the Formal Education stream, the company has a strong brsence by oHcnngvanous services to K 12 Schools. Colleges and Universities in multiple geographies Career Point Croup empowers students on both professional development and degree-awarding courses in various streams including: • Engineering & Technology, • Management & Commerce Studies, • Basic & Applied Sciences • Computer Applications • Law and Governance • Vocational Studies The financial year 201 A- IS has proven to be a turning year in tiny ways. Growth momentum back in tutonal division, performance of formal education as per strategic plan and successful launch of their extensions e-lcaming and vocational education, were key highlights of the year 201*1-15. The operational efficiency of the tutorial business operations is improved considerably and the company still cnioys a significant operating leverage available in this division. CP Gurukul - the residential school cum coaching campus, is being positioned as a brmier campus which is reflected in growth of average realization per student while increasing the enrollments year over year. Increasing trend of enrollments in formal education institutions, remarkable placement records, and new collaborations/tie-ups signify king-term prospects of the formal education division. The company is firmly establishing itself as a complete education Company with a continuous focus on incorporating excellence in all aspects of services delivery to enhance students learning experience with Career Point Education 15 our passion and cutting edge in teaching is an indication of our desire to focus on practical application The company follows a time-tested, highly admired and acclaimed education system with a commitment to provide best learning experience and active student life. The courses at Career Point arc designed to strike the perfect balance between practical requirements of the industry and the need for academics. We understand the fact that it required a practical experience to improve effectiveness of our classroom programs and strengthen behavioral aspects of the knowledge. All facilities and offends at Career Point institutions give students the head start for their empowerment and inculcate various skills which are essential for our students to become professional and leaders of tomorrow. Academic Pedagogy: A radical change is what Career Point intends to bring in its students. Students are put on the charted path of success through excellence in academics. In tutonal services, our result oriented teaching methodology is combined with regular assessment and personalized feedback. At school education, our classroom teaching is aimed at m-depth subject knowledge with due focus on sports and extra-curricular activities. Career Point higher education institutions offer credit based academic system with flexible curriculum and inter-disciplinary learning. Our academic delivery m vocational education brsents theoretical training with conceptualization and practical exposure. Resource Facilitators: To provide a quality education. Career Point has a highly qualified team of teachers, a motivated support staff, an experienced management team and a professional advisory board. This team works tirelessly to enlighten students on core area needed to be developed for success in their career aliead. Students are assigned their mentors for any academic or non-academic issues. Mentors records the profiles of their mentees and track their academic. and extra-curricular performances-Infrastructure Facilities: Career Point institutions have state to the art facilities with spacious classrooms, modem labs, libraries and resources for extracurricular activities. Classrooms with AV/OHP facilities; labs with latest machines tools and equipments; libraries with vast collection of books, journals, and reference books; are coupled with other facilities such as seminar halls, language labs, activity centers etc Most of the campuses are situated in serene. pollution tree and m-less populated areas. Campuses also have affordable and comfortable hostels with cafeterias, medical centers, shopping facilities and banking services. Development System: Education at Career Point embeds key ingredients of success whilst brparing them for all future challenges which are beyond books and academic examinations. The system offers a broad speeding of skills and features such as focus on communication and brsentation skills, building relationship and leadership skills, promoting creative thinking and innovations, and developing organizational and decision making to ensure an all round education to the students. The student development program composes of seminars, expert talks, workshops, panel discussions and more which all are planned and organized by the students themselves. Financials In financial year 201 4-15. the income from operations on standalone basis was reported at Rupees 62.83 crores with year on year growth of 16%. The total income including the other income was stood at Rupees 71.1 crores against Rupees 62.-19 crores brvious year. At consolidate level, the income from operations grew by 20%year-on-year with adjustments of one-off income from current period and discontinued income from last year. The discontinued income from last year include lease rent on fixed assets of higher education division in our infra subsidiary. The in eased top-line due to higher enrollments generated a significant improvement in to operating margins Operating f-BUUA was increased by more than 5 times compared to brvious financial year on standalone level. Operating EBITDA is reported at Rupees 11.04 crores against 1.87 croies brvious year with margins of 17.6% compared to 3.5% last year. The net income was realized at Rupees 9.7 crores with an increase of 130% against fiscal 2013 14 and margin improvement of 7 percentage points. As on 31 st to March 2015. the net worth of the company was Rupees 3.3 billion and net cash including the investments and current loans alter rcnwvtng the bank borrowings was reported of Rupees 73.4 acres at standalone level and Rupees 42.5 crores at consol level. Human Resources Career Pom! has demonstrated its excellence to thousands of satisfied students and their parents. All this would not be possible without the committed and passionate people of Career Point-both academic and non academic staff, wino strive to build this a great organization each and every day. They remain committed to company's ideals of building on a strong foundation, creating a bright future and delivering great value The company continues to strengthen the management team and add additional talent and expertise By 31 March 2015, the Company had total number of employees of 606. Corporate Social Responsibility The company realizes the need to create an act for potently. a plan that delivers. To help people discover the joy and meaning of learning in an empowered, dignified world driven by competence, knowledge and wisdom Institutions of Career Point nurture potential entrebrneurs, technocrats and managers for new level of leadership in their career. Career Point also understands the importance of giving back. • Giving back to deserving underserved candidates through financial support programs • Giving back to environment by several green initiatives • Giving back to communities through a series of projects in the area of healthcare, employment and of course, education. Risks and Concerns With having the business operations in different industry segments. Career Point is exposed to variety of external and internal risks. Though the company has a robust mechanism for risk management in place, however, complete risk avoidance on all the financial, operational and strategic objectives cannot be promised Boards of directors and management of the company regularly review and aim to mitigate vanousnsks related to regulatory, competition, geography, human resource. technology, legal, political etc The company recognizes following key risks to its business operations which may adversely affect the financial performance of the Company: Regulatory risk: Any changes in regulatory norms on the Formal as well as Informal Education front may significantly impact the investment made in education by the Company. The Company is continuously making an effort to upgrade its services, leveraging technological advancements, expanding the product portfolio to minimise the regulatory nsk, if any. Decrease in student enrolment: With the increased competition, the Company might face a risk of decline in student enrolments. However, the Company's focused marketing strategy (which includes direct and indirect marketing) continues to attract students across its courses Pressure on margins: there could be a margin brssure due to staff costs, cost of study material, high advertising and business promotions, etc, going forward. We believe the Company has sufficient tools to counter these factors, the same anses. Attrition: Attrition in the senior management/faculty team may impact the business The Company's strategy for retaining talent involves offering competitive compensation packages, faculty training system in place for new entrants and existing faculty, along with a healthy working environment Geographical concentration: The Company derives The larger share of its revenue from Kota, Rajasthan. Hence, any disruption in operations, or competition at this location could impact overall operations significantly. The Company is making a concerted effort to expand its operations pan-India, overseas and is also boosting its Technology Offenngs, Distance Learning segment etc Internal Controls & Systems The Company has proper and adequate internal control systems, which ensure that all assets are safeguarded against loss from unauthorized use and all transactions are authorized, recorded and reported correctly. The Management continuously reviews the internal control systems and procedures lo ensure orderly and efficient conduct of business. Internal audits arc regularly conducted, using external and internal resources to monitor the effectiveness of internal controls. The Company deploys a robust system of internal control that facilitates the accurate and timely compilation of financial statements and Management reports; ensures regulatory and statutory compliance; and safeguards investors' interests by ensuring the highest level of governance and periodical communication with investors. M/s. P. Khandetwal K Co, Chartered Accountants. Kola, is the internal auditor of the Company, who conducts audit and submit quarterly reports to the Audit Committee, The Internal Audit process is designed to review the adequacy of internal control checks in the system and covers all significant areas of the Company's operations. The Audit Committee reviews the effectiveness ot the Company's internal control system. The CEO and CEO certification provided in the CEO and CFO Certification section of the annual report further discusses the adequacy of our internal control systems and procedures. Outlook Career Point continually explores plans to strengthen existing capabilities while developing new offerings by various modes ij?. product diversifications, geographical sbrad, technology platforms, and inorganic growth. We expect out future growth to be dnven by multiple avenues viz. Capturing the enrollment numbers achieved in past; Increasing The average realization in CP Gurukul; Continued growth momentum of formal education institutions; Improved margins through existing operating leverage, and enlargement of new ventures i.e. Vocational education and e-Leaming. As the rankles are expending the potential of growth has also increased in parallel. The company is fully equipped and the company management is confident to achieve benefits out of increased growth potential in coming future. The existing businesses and new ventures are expected to accelerate the growth path for the company and help its goal to become a leading global player in education. Cautionary Statement This report contains forward-looking statements, which may be identified by their use of words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company's strategy for growth, product development market position, expenditures and financial results, are forward-looking statements-Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company's actual results, performance or achievements could Thus differ materially From those projected in arty such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events. |