MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Education Industry

"Education is the true alchemy that can bring India its next golden age. Our motto is unambiguous: All for knowledge, and knowledge for all" said by Shri Pranab Mukharjee, The President of India. India, today, is considered as a talent pool of the world, having qualified and educated human resources in abundance. Education is the key to unlocking and building lasting value in a robust economy.

The Indian education sector is one of the largest sunrise sectors contributing to the country's economic and social growth. The Indian education system, considered as one of the largest in the world, is divided into two major segments of core and non-core businesses. While, schools and higher education for the core group, the non-core business consists of br-schools, vocational training and coaching classes. The education sector in India is evolving, led by the emergence of new niche sectors like vocational training, finishing schools, child-skill enhancement and e-learning. India has emerged as a strong potential market for investments in training and education sector, due to its favorable demographics (young population) and being a services-driven economy.

India is an important educational centre in the global education industry. Education and training sector is undergoing a sea change in the recent past with the focus shifted from public to private sector. Private sector is also actively involved in education and its role will become more poignant in days to come. The private sector's role in the higher education sector has been growing at a rapid pace over the last decade and needs to further expand at an accelerated rate. The Education sector in India is poised at a crucial stage in its growth. India's demographic advantage of having a large population of youth, coupled with low gross enrolment ratios, brsents a huge opportunity to education sector players. At the same time, the growth of the Indian economy and upward movement of income levels is boosting spend on Education, which already accounts for the second-highest share of wallet for middle-class households. It is one of the largest education systems in the world along with US and China in terms of enrolments, schools and higher education institutes.

Prime Minister Modi's independence day declaration of 'Make in India' has in a sense articulated India's aspirations to be a global leader in the near future. FICCI, too believes that this dream can be achieved only if there is an alignment of vision for skill development, higher education and research with the overall economic agenda. In this context, 'FICCI Vision 2030 for Higher Education in India' released last November during 9th FICCI Higher Education Summit, has been timely and appropriate. The FICCI-EY report this year is very much aligned to the Vision 2030 articulated last year and focuses on making Indian higher education globally relevant and competitive. The vision clearly outlines the architecture that would create a high quality, yet equitable and affordable Indian higher education system that is not just the best in the world but the best for the world. (Source: FICCI Higher Education Summit 2014).

As the need to develop and incubate life skills and subject matter expertise is br-requisite for meaningful career and employment. The parallel focus needs to be on real time education and training to take care and enable students in case of a dropout so that they can support their families in better manner.

The total amount of foreign direct investments (FDI) inflow into the education sector in India stood at US$ 1,071.5 million from April 2000 to January 2015. The Government of India is all set to roll out a new educational policy by 2015, according to Ms. Smriti Irani, Union Minister of Human Resource Development (HRD), Government of India. (Sources : Media Reports, Press Releases, Press Information Bureau, RNCOS Report, Department of Industrial Policy and Promotion (DIPP).

India's private education sector, currently estimated to be worth $40 billion, is projected to triple in about 10 years. Private groups, both domestic and international, are setting up vocational training, IT training and teacher training programmes, and new campuses are expected to come up across the nation over the coming months, says Nayantaraa Lama.

The Narendra Modi (NaMo) Government has launched the programs called Skill India. The main goal is to create opportunities, space and scope for the

development of the talents of the Indian youth and to develop more of those sectors which have already been put under skill development for the last so many years and also to identify new sectors for skill development. The new programme aims at providing training and skill development to 500 million youth of our country by 2020, covering each and every village. Various schemes are also proposed to achieve this objective. The emphasis is to skill the youths in such a way so that they get employment and also improve entrebrneurship.

According to NaMo, Skill India won't be just a programme but a movement. Here, youth who are jobless, college and school dropouts, along with the educated ones, from rural and urban areas, all will be given value addition. Certificates will be issued to those who complete a particular skill or programme and this certificate has to be recognized by all public and private agencies and entities, including overseas organisations. This is a programme for the entire nation. Corporate educational institutions, non-government organizations, Government, academic institutions, and society would help in the development of skills of the youths so that better results are achieved in the shortest time possible. The government has set a target of skilling 40.2 crore people by 2022, and the initiatives are aimed at realising this objective.

NaMo also said that both "Digital India" and "Skill India" schemes are interrelated to each other. In other words so as to establish India as digital country we need to train or literate people about digital mediums, and in doing so youth not only get skilled themselves but makes latter scheme a success as well. He also accentuated that in order to deal with international challenges, we need to impart definite trainings such as social media optimization, search engine optimization, online selling, manufacturing and any other kind of skill to youth so that they gain confidence.

Vocational Training in India

India has world's second largest working age population, yet many of the vacancies go unfilled in need of the desired candidate. With a near double digit growth during the last decade, the demand for skilled resources has increased manifold. Vocational training bridges the gap between theoretical classroom training and real work environment through its job-specific skill training.

Vocational Education and Training (VET) also called Career and Technical Education, brpares learners for jobs that are based in manual or practical activities, traditionally non-academic and totally related to a specific trade, occupation or vocation. Generally, vocation and career are used interchangeably. VET is an important element of the nation's education initiative. In order for Vocational Education to play its part effectively in the changing national context and for India to enjoy the fruits of the demographic dividend, there is an urgent need to redefine the critical elements of imparting vocational education and training to make them flexible, contemporary, relevant, inclusive and creative. The Government is well aware of the important role of vocational education and has already taken a number of important initiatives in this area.

Media education not only needs theory education but also practical education for the students to build their career in different aspects of journalism and mass communication. The field of journalism includes reporting, editing, advertising, public relations, event management, content writing, cyber journalism and other branches. Presently, media education is one of the most growing disciplines in the academic scenario of India. We are one of the very few companies providing integrated vocational training in media and entertainment space in India, Dubai and Uganda. Our Company attempts to bridge the widening gap between academia and industry requirements by catering to the students base at vocational level and making them industry ready. The mission of the Company is to create a global conglomerate that sets new standards of excellence in Education, Entertainment and Media and grooms future leaders of the industry.

After finishing the courses, students are often offered placements in jobs. Vocational trainings in a way give students some work related experiences that many employers look for. Formal vocational training follows a structured training program and leads to certificates, diplomas or degrees, recognized by State/Central Government, Public Sector and other reputed concerns. India targets creation of 500 million skilled workers in 2022.

Media and Entertainment (M&E) Industry and Developments

The Indian Media and Entertainment industry that registered a growth of 11.7 percent amounting to INR 1026 billion in 2014, which is expected to grow at a CAGR 13.9 per cent to reach INR 1,964 billion by 2019. Reflecting the macro economic growth rate, advertising witnessed a healthy year largely on the back of heavy spending during the national and state elections, and a significant surge in spends by e-commerce companies. The growth in popularity of digital media continued to surge in 2014 with a significant growth in digital advertising of 44.5 per cent over 2013. Critical tax and regulatory interventions were key for enabling growth.

Globally, the Indian M&E industry is one of the fastest growing, followed by countries such as China, Russia and Brazil. In India, the M&E industry has witnessed steady growth over the past few years, despite the slow growth of the economy. The media industry is yet to recognize the importance of training, skill development or vocational education in achieving its growth objectives. One of the major highlights in 2014 was the announcement of 'Digital India' a program to transform India into a digitally empowered society and knowledge economy by the government. (Source FICCI -KPMG Indian Media and Entertainment Industry Report 2015).

Investment in educational institutions providing specialized courses for skilled technicians is a step in right direction to develop talent and meet the demand of the industry. The curriculum in media schools can be made sensitive to the actual needs of the industry to impart basic and advanced skills. This will help in creating talent within M&E industry, thereby reducing the need to hire people from other sectors.

Our Company is marshalling its talent pool and resources to contribute relevant, top-of-the-line work in the field of vocational training, both in India and abroad. We are one of the very few companies providing integrated vocational training in media and entertainment space in India, Dubai and Uganda. The brand name of the Company is dependent on the quality and scope of our course offerings, and we offers and develop new quality educational programs and services that are responsive to the evolving market.

Event Industry

As India builds larger venues to accommodate world class events and the appetite for live events grows, this sector will increasingly grow in size and impact. Inspite of being a fairly unorganised and fragmented sub-sector within the M&E market, 'live events' is set to experience fresh initiatives in brand and community building through experimental creations works, and niche event management.

The authorities need to make things easier and less opbrssive, because, as with the growth of any sector, everybody ultimately stands to gain from a friendlier regime - industry, consumer and even the exchequer. The need of the hour is clearly a rationalised tax structure, and honest, single window licencing.

Advertising witnessed a healthy year largely on the back of heavy spending during the national and state elections, and a significant surge in spends by e-commerce companies. The growth in popularity of digital media continued to surge in 2014, with a significant growth in digital advertising of 44.5 per cent over 2013. Critical tax and regulatory interventions were critical for enabling growth.

With economic development, sports viewership in a country usually moves from a single sport to multi sport. Cricket is among the most popular sports in India, however, recent years have seen a rise in non-cricket sports. The success of the IPL has led to the creation of several other league - format sporting events, such as the Indian Badminton League, Hockey India League and the recently launched Pro Kabaddi League, which had an estimated 66 million people tune in the first game of season.

Recognition of Live Events as an industry has been a long standing demand, this would help in proper resolution of challenges and issues bleeding the industry, besides making them eligible for structures finance. Other challenges like infrastructure, multiple licenses, archaic regulatory framework, and an adverse tax structure have been dogging this sector, and there is hope that new government has the will to address the issue. Rise in sentiment among brands and sponsors is good for the sector, though tangible business benefit is likely only to be realized in 2015. The  government itself - through mass outreach programs like 'Swach Bharat', 'Beti Bachao', 'Make in India', etc. - started ambitious events based spending.

The lack of venues and infrastructure is further compounded by a regulatory maze across central, state and local authorities. On an average an event organizer has to go through 20 to 30 licenses and permissions before an event can get off the round. The promise of 'single window' clearances from state governments in Goa, Maharashtra, Karnataka and Rajasthan is yet to be fulfilled, according to industry discussions. Event owners are also concerned about the tax burden - mostly entertainment tax - and excise inspections which sometimes make the event unviable. (Source : FICCI -KPMG Indian Media and Entertainment Industry Report 2015)

Union Budget 2014-15

There have been encouraging signals already received from FY 2014-15 union budget and various government announcements done pertaining to education. A lot more enabling environment is expected to get developed that should take care of various growth inhibitors that continue to exist for certain segments.

The education is the other high priority sector for the government. Jaitley proposed to set aside Rs. 69,074.76 crore for education in 2015-16, as against Rs. 70,505 crore in the revised estimate in 2014-15. The revised budget for 2014-15 has reduced the education allocation to Rs. 70,505 crore from Rs. 82,777 crore as was pegged in the budget estimate. Of the total outlay for 2015-16, Rs. 42,219.5 crore was pegged for the schools sector and Rs. 26,855.26 crore for higher education. Allocations to the school sector was cut by around 10% in its planned outlay from Rs. 43,517.9 crore in the last budget to Rs. 39,038.5 crore in the year that begins on 1 April. In comparison, higher education has been given a plan allocation of Rs. 15,8555.26 crore in 2015-16, as against Rs. 13,000 crore pegged in the revised budget for 2014-15. In other words, the higher education sector saw an increase of nearly 22%.

With proposals to defer the General Anti Avoidance Rules (GAAR), reduce tax on royalties and fees for technical services (FTS) and implement the Goods and Service Tax (GST) regime from April 1, 2016, the Finance Bill 2015 has set an optimistic roadmap for the M&E sector from a tax perspective. The implementation of GST is expected to greatly benefit the industry in the form of reduction of tax cost for the industry, doing away with the dual taxation (i.e. levy of service tax as well as VAT on certain transactions, subsuming entertainment tax etc.)

Outlook

The Company plans to continue to expand its brand and product portfolios and its service and distribution networks in India and abroad in the near future, both organically and inorganically via strategic acquisitions and associations. The Company believes that growth is planned & focused and based on efficient use of available resources to grow the business and we plan to retain and strengthen our leadership position in the marketplace.

Opportunities and Threats

Opportunities

Being a largely under-penetrated field, the education industry in India holds enormous opportunities for growth. While the entry barriers are likely to stay high for new companies in the near future, those that have already established themselves are likely to see tremendous growth. This is mainly due to the growing awareness of the need for quality education as well as the increasing population of students in the country, which are likely to lead to companies in the industry adopting operation models that can enable them to overcome both rigid regulations as well as low scalability. In areas of services, expertise and knowledge, your Company with its team of professionals is expected to tap the potential opportunities for growth.

The Company will look at brsence both domestic and internationally as in locations, collaboration with leading universities/education institutions to deliver courses to their existing students and resource/research opportunities globally. This shall mean a multifaceted and multi cultural education imparting entities with focus on world class education and standards. The Company plans to continue to expand its brand, scalability and distribution networks through franchisee/ business associates in India and abroad.

The Company by geographic coverage strengthening its brsence in business with a clear focused approach which would help increase revenue growth, improve profitability as well as de-risk the company from economic slowdowns. The Company will continue to tap opportunity to grow its business both organically and inorganically via strategic acquisitions in India and abroad.

The growing acceptance of vocational institutes and the focus on the media and entertainment sector as a serious career option in the minds of parents, key decision makers, students alike - will ensure that courses brsented by Greycells are readily accepted in the market.

Threats

Indian Education system is facing challenges like "poor quality of education" and "access to education". Both these challenges lead to the underperformance of the education system. The further challenges are uneducated & untrained population, irrelevance of courses, inadequate syllabus, inadequate practical training, poor enrolment, high drop-outs, lack of employment opportunities etc. One of the related challenges is to attract talented people to work with the Company and also retaining the pool of this talent. The management continuously reviews its talent pool for upgradation. The Company is focused on ensuring and has implemented employee friendly policies to retain talent.

The education business has seen the entry of host of new players in almost all the sectors we have established our brsence. Education as a business is one of high growth prospects with brsence of a mix of various professional academies, private and public schools, international schools/ academies, private tutors, government schools etc. The Company operates in a highly competitive environment that is subject to innovations, changes and varying levels of resources available to each players. This can be a matter of concern if the company does not adapt to the changing face of the Industry. The company has been keeping itself abreast with the latest changes in the industry to implement the same in its operation to keep itself ahead of competition.

The key management is responsible for the day-to-day operations and they are indeed the key force in driving the business growth because of their experience and knowledge of industry. There is always a risk that we may lose our key management team. If key management unable or unwilling to continue with us, we may find it difficult to replace such people and our business may be adversely affected. As we are in service industry, our growth and operations are dependent on the management team.

International experience suggests that what employers mostly want are young workers with strong basic academic skills and not just vocational skills. The brsent system does not emphasize general academic skills. The relative wages of workers with secondary education are increasing.

Some of the challenges that confront VET in India are low relevance of vocational education courses to job market needs which leads to low success of VET graduates. There is shortage of quality faculty in vocational training institutes as there is no provision for training of vocational teachers.

Our success is mainly attributable to our reach, experience and quality processes. We recognize that we can only grow and prosper if we can:

a. acquire and retain top quality talent on a continual basis

b. execute efficiently and manage growth challenges

c. education for employability

d. deliver relevant and innovative content to the students

e. remain close to the students at all times

f. on the job training

g. earn while you learn

h. placement opportunities

i. reorientation of vocational courses

Another large challenge is managing expectation from students. Due to the brvious achieved success in the field, especially when there was the first mover advantage - if the new courses or existing courses do not live upto expectations, it may lead to dissatisfaction. The Company is well aware of these risks and challenges and has put in place mechanisms to ensure that they are managed and mitigated with adequate timely actions.

Segment-wise Performance

The Company operates in one primary segment but through its subsidiary it operates in geographical segment they are India and International.

Subsidiaries

EMDI (Overseas) FZ LLC is a wholly owned subsidiary of the Company caters into vocation of education, including teaching graduates, undergraduate and working professionals in the field of Event Management & Innovative Marketing, The Creative and Media Industry Landscape, Advertising & Design, Public Relations and Journalism, Wedding Planning, Radio Jockeying & Programming, Media & Digital Marketing etc. in the form of class room training and workshops through general courses, specialist programs, combrhensive event and media management courses and training programs.

Through its venture, the Company has launched wedding planning (TWA) course in Mumbai and WMA (Digital and Online Media Courses).

Risks

Risk is an integral part of corporate world today for any going concern and our endeavor has been to maximize stakeholder value by achieving an appropriate balance between risks and return. Since risk taking is intrinsic to business growth, all business entities face risks either from external environment or from internal operations.

The major key issues are challenges for Foreign Participation, Excessive and multiple regulators and regulations, Policies are inconsistent, Limited choice of entity - Trust, Society or Section 25 company, Lack of availability of trained faculty, Course content not in line with the expectations of the industry leading to poor employability, High capital expenditure requirements for setting up Higher Education institution with quality infrastructure etc. (Source : Report of PWC on Education Sector)

The most significant risks which the company has identified with mitigation plan are :

> External Risks (Political, Environment, Slowdown in economic growth, Change in Education policy, Currency Rate Fluctuation, Competition, Changes in Law and Natural Calamities) and

> Internal Risks (Business Concentration, Investment Process, Human Resource Management, Core Faculty etc.)

Further any change in tax law in India, particularly income tax and service tax might be to increase tax liability of the company thereby putting brssure on profitability.

To mitigate the same, the Company has constantly endeavored to broaden the charter of risk management to include opportunities as well as threats. It uses an integrated risk management approach, based on a number of techniques to cover the full range of risks in the framework. Today, risk assessment and mitigation is an important part of decision making and management at all levels of the company. To mitigate this, the Company will initiate steps for rationalization of infrastructure.

Apart from the regular operational & business risks, the other major risks faced by the Company are:

a) Business Concentration

The Company's business today is largely concentrated in vocational training primarily in few verticals of media and entertainment.

The poor performance of our Business Associates leads to downfall in projected revenues, which is out of our control. Further low quality services rendered by Business Associates to students may also one of the risk areas for the Company. To mitigate this risk, our senior officers frequently visit the centers and ensure that courses shall be conducted according to the Operational Manual established by the Company. The Company can also take corrective measures to keep up the requisite academic standards.

To mitigate the risk arising from this concentration, the Company will strive towards expanding the Company's' business in additional areas of related service offerings.

b) Core Faculty

The faculty plays a pivotal role in the system of education. Further majority of our faculty members are visiting faculties from various industries and are in other occupation besides teaching at our centres. Any exodus by the visiting faculties can have adverse impact on business of the company. Failure to attract / retain qualified faculty members who have the necessary domain expertise or failure to provide continuous training to our faculty members so as to keep them abreast with the changing student expectations, examination pattern and other key trends that are necessary to effectively deliver the course may affect the pace of our growth and teaching quality across all our learning centres in different locations.

To overcome, the Company taps professionals from relevant industry. All faculty members lecture on subjects of their expertise, resulting in experience sharing, interaction and networking of these professional with the students. The faculty members contribute to our overall performance by providing good quality training to the students and thus enable us to maintain our brand and reputation. The team of outstanding and dedicated faculty members provides combrhensive and systematic guidance to students who aspire for nothing but the best.

c) Entry of other players

The lack of an entry barrier with respect to a private setup offering similar certificate courses is a threat. Centres offering similar courses are the first level of competition, however competition which enters the market, offers a poor product and then is forced to shut down later on is even worse as it spoils the education market and trust towards the other credible players.

d) Enrollment of students

The Company's ability to attract students to enroll for courses depend on several factors such as to offer new courses, enhancing existing courses in response to changing industry needs, student's demands, expanding our geographic reach, effectively marketing courses to a broader base of prospective students and responding to competitive brssures. Our course content incorporates the latest global trends and concepts, which required by fast growing and ever changing industry. Further the Company's course content is developed by subject experts possessing long years of academic and industry related experience. The content so created is constantly upgraded to suit the requirements of the educational institutions and expectations of the student community. Our courses are structured and embellished with inspirational modules to make learning holistic and complete. Given the industry's changing landscape and emerging challenges, our courses are well poised to deliver talent and harness the potential of young minds. To be an institute of vocational learning, focusing on developing intellectual, personal and employability skills of our students. Further our course curriculum designed with a focus on ensuing gainful employment.

Social Responsibility

Your Company believes in being a responsible part of the community and contributing back to it in every possible manner. SWAT (Students Working Against Tobbaco) is a youth initiative initiated by EMDI and its students against tobacco, operating at an awareness platform. The objective of SWAT is to urge India's youth to stay away from the ravages and dangers of smoking. The purpose is to persuade young people to never try smoking and to encourage those who are trying to get rid of the habit of smoking. The SWAT team has taken various initiatives in the form of events to sbrad this message over the years by organizing Smoke Free Bike Rally, College Festival Activities, Candle Walk, Loud and Proud Smoke Free Rock Concert etc.

Internal Control Systems

The Company has appointed a firm of Chartered Accountants as Internal Auditors to review and report on internal controls system. The report of the Internal Auditors is reviewed by the Audit Committee. The Audit Committee formulates a detailed plan to the Internal Auditors for the year and the same  is reviewed at the Audit Committee meetings. The Internal Auditors submit their recommendations to the Audit Committee and provides road map for future action.

The Company recognizes the importance of internal controls and has suitable internal control systems and processes in place for the smooth conduct of the business. Company's internal controls are commensurate with its size and nature of its business. Internal control systems in the Company are intended to provide reasonable assurance that assets are safeguarded against loss from unauthorized use and all transactions are executed in accordance with Management's authorization and properly and promptly recorded and accounting records are adequate for the brparation of financial statements and other financial information. The management continuously reviews the internal control systems and procedures to ensure orderly and efficient conduct of business. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors and independent Audit Committee.

Discussion on Financial Performance with respect to Operational Performance

The financial performance of the year ending March 31, 2015 reflects the steps have been initiated to become a more focused company, moving into areas where we have huge opportunities and greater long term potential.

The authorized share capital of the Company is Rs. 11,70,00,000/- divided into 1,17,00,000 equity shares of Rs. 10/- each. The paid up share capital of the Company is Rs. 7,90,77,150/-divided into 79,07,715 equity shares of par value of Rs. 10/- each.

Human Resources

The Company firmly believes that its human resources are its true assets and constitute the most vital force in moving the organization forward. The key management is responsible for the day-to-day operations and they are indeed the key force in driving the business growth. The Company has strong management team with experience and expertise and focus in the areas of media and entertainment education. The management team effectively plans and oversees implementation of growth strategies. To reduce attrition levels, the Company has initiated a number of programs that include an empowered work environment, learning opportunities, employee friendly policies and competitive compensation packages.

FORWARD LOOKING STATEMENT

Forward-looking statement in this Annual Report should be read in conjunction with the following cautionary statements. Certain expectations and projections regarding future performance of the Company referenced in this Annual Report are forward - looking statements. These expectations and projections are based on currently available competitive, financial and economic data along with the Company's operating plans and are subject to certain future events and uncertainties, that could cause actual results to differ materially from those that may be indicated by such statements. The Company undertakes no obligations to publicly update or revise any forward-looking statements, whether as a new information, future events or otherwise.