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OPEN 111.40
CLOSE 109.75
VOLUME 141473
52-Week high 119.00
52-Week low 71.85
Mkt Cap.(Rs cr) 1,761
Buy Price 0.00
Buy Qty 0.00
Sell Price 105.75
Sell Qty 790.00

NIIT Ltd. (NIITLTD) - Director Report

Company director report

Dear NIIT Shareowner

Your Directors take pleasure in presenting the 33rd Annual Report along withthe Audited Financial Statements for the Financial Year ended March 31 2016.

Financial Highlights

The highlights of your Company's Financial Results for the Financial Year April 1 2015to March 31 2016 are as follows:

(Rs. Mn.)

NIIT Limited-Group

NIIT Limited



Particulars FY FY FY FY
2015-16 2014-15 2015-16 2014-15
Net Sales (Income from operations) 10069 9574 3815 3486
Other Income 76 131 404 369
Total Income 10145 9705 4219 3855
Total Expenditure 9595 9489 3952 3703
Profit before depreciation and taxes 550 216 267 152
Depreciation and Amortization 492 1073 282 431
Exceptional Items (Net) 16 (803) 22 (848)
Net tax provision 37 12 6 34
Net profit/ (loss) before share of Associates' Profit & Minority Interest 37 (1671) 1 (1161)
Share of Associates' Profit and Minority Interest 635 286
Net Profit/(Loss) 672 (1385) 1 (1161)
Basic EPS (Rs.) 4.07 (8.39) 0.01 (7.03)
Diluted EPS (Rs.) 4.01 (8.39) 0.01 (7.03)

During the year your Company's consolidated income from operations was Rs. 10069million as against Rs. 9574 million in the previous year and Net Profit (after Share ofAssociates' Profit and Minority Interest) Rs. 672 million as against loss of Rs. 1385million in the previous year.

The income from operations for the year under review for the Company on a Standalonebasis was Rs. 3815 million as compared to Rs. 3486 million in the previous year and Netprofit of Rs. 1 million as against the loss of Rs. 1161 million in the previous year.

Business Operations

The growth momentum continued in the Corporate Learning business. In the corporatetraining market your Company continues to focus on Managed Training Services (MTS).Revenue from Corporate Learning Group (CLG) grew 16% year-on-year driven by strongmomentum in MTS which was up 12% as compared to the previous year. This was achieveddespite headwinds due to sharp decline in commodity prices which impacted decision makingin certain sectors including the Energy Sector. NIIT added 7 new global MTS customers inFY16 including 4 in Q4 FY16. As on March 31 2016 the company had 31 MTS customers with arevenue visibility of USD 200 million over the balance period of existing contracts. Thebusiness achieved EBITDA margin of 12%. Operating profit (EBITDA) was up 17% year-on-year.CLG contributed 56% to the total consolidated revenue of NIIT.

Your Company benefited from the comprehensive business transformation programundertaken by business in previous year which included a review of the entire portfolio ofbusinesses geographies and products with the objective of exiting low margin and lowvolume products capital intensive businesses and sharpen focus on asset - lighthigh-return and growth- oriented offerings. The Individual Learning business and SkillBuilding business operations were combined into a single Skills & Careers Group (SNC).This transformation program helped the company to return to growth and achieve positiveEBITDA margin in FY16. This was achieved despite continuing headwinds in the IT sectorhiring in India. The company had responded to the headwinds in the business by focusing ongrowing its Beyond-IT portfolio of offerings. The contribution from Beyond-IT portfolio ofcourses increased to 40% in FY16 as compared to 33% last year with a 23% increase inrevenue as compared to the previous year. The business achieved robust growth in revenuefrom International markets and in B2B offerings in India as a result of sharper focus andrealignment of operations. In addition new transformation initiatives launched during theyear including StackRoute and received encouraging response from the market.Overall the revenue achieved by the Skills & Careers business grew 1% year-on-yearversus a decline of 18% in FY15. Significant growth was achieved on a reduced capacityversus last year.

The business had a positive 2% EBITDA margin as compared to negative 5% EBITDA marginin FY15 an improvement of 698 basis points. The Skills & Careers business contributed33% to NIIT's consolidated revenue.

In the School Learning Business the company continues to stay away from capitalintensive and capex-driven business models. While this impacted the overall revenue andmargins the company continues to improve its liquidity and capital efficiency. The focusfor the School Learning Group (SLG) is on growing the asset-light IP-driven productofferings. In FY16 revenue from SLG declined 25% year-on-year. The business had 2% EBITDAmargins for the year and contributed 11% to NIIT's revenues for FY16.

On an overall basis NIIT achieved revenues of Rs. 10069 million a growth of 5% ascompared to the previous Financial Year. The strong growth in Corporate Learning and turnaround in Skills and Careers Business helped to overcome planned ramp down of revenue fromgovernment schools. EBITDA was Rs. 712 million as compared to Rs. 442 million last year(excluding one-time transformation charge in FY15).

Future Plans

The Company continues to focus on an asset light technology intensive and IP drivenbusiness opportunities. In the Corporate Learning Business the Company expects tocontinue growth momentum driven by strong demand for outsourcing of training to specialisttraining companies.The Company has started the new Financial Year with robust pipeline ofMTS opportunities.

In the Skills and Careers Business softness in hiring of IT graduates is expected tocontinue in the short term and would impact enrolments. However the increasing trend ofdigitization across industries and disruption of traditional industries by start-ups isdriving demand for Digital skills. NIIT has kicked off a program of Digital transformationof its portfolio of courses to align with increasing demand of such courses. In additionin the medium to long term your company plans to transform training delivery from brickand mortar centres to a multi-modal multi-channel delivery modal involving a greaterproportion of delivery online.

NIIT will continue to defocus capex driven business and exit capital intensivegovernment schools. The company believes that there is a large opportunity in the K-12market and plans to leverage existing operations in the schools to offer comprehensivemanaged services to schools as well as offer products and services to students outsideschool through digital channels.


Your Directors have not recommended any Dividend for the year under review.

Transfer to Reserves

Your Company has not transferred any sum to the General Reserve.

Awards and Accolades

During the year the NIIT Brand received accolades from across the world recognizingand commending various aspects of the Company. Some of them are listed below:

• NIIT has been featured as 'India's Most Trusted Education Brand 2016' by BrandTrust Report for the fourth consecutive year.

• NIIT has been awarded the 'Best Innovation Brand' in the Education sector at theASSOCHAM National Brand Summit & Excellence Awards 2016.

• NIIT has been featured as the 'Most Respected Education Company 2016' byBusiness World.

• - a disruptive innovation by NIIT Limited has been awarded the 'Bestonline education platform' at the Indian Education Awards 2016 organized by FranchiseIndia India's leading Franchising publication.

• NIIT Yuva Jyoti has been recognized as the 'Best Institute - Innovation 2016'by ASSOCHAM.

• NIIT USA received 8 'Brandon Hall Group Excellence Award 2015' jointly withShell GE MetLife Zurich North America and Westfield Insurance.

• NIIT USA has been ranked among Traininglndustry. com's 2016 Top 20 Companies inContent Development - for the sixth consecutive year.

• NIIT USA has been ranked among Traininglndustry. com's 2016 Top 20 Companies inTraining Outsourcing - for the ninth consecutive year.

• NIIT USA has been ranked among Traininglndustry. com's 2015 Top 20 Companies inGamification - for the second consecutive year.

• NIIT USA has been ranked #22 Gold LearningElite member in the CLO Learning Elite2016 list Chief Learning Officer magazine's prestigious program that honors the bestorganizations for learning and development.

• NUT was conferred with two prestigious awards at 'The 5th Indian EducationAwards 2015' organized by Franchise India. The company won the coveted Best VocationalInstitute for Banking Finance & Insurance award for NIIT Institute of Finance Banking& Insurance Training Ltd (IFBI). The prestigious Best Innovative Learning Tool awardwas presented to NIIT Nguru MathLab Plus.

• NIIT Limited has been awarded the 'Franchisor of the Year Award 2015' under thecategory 'Vocational & Skill Development Training Institute' by Franchise IndiaIndia's leading Franchising publication.

Changes in Capital Structure

Pursuant to the composite Scheme of Arrangement under the provisions of Section 391 and394 of the Companies Act 1956 between NIIT Limited Evolv Services Limited ScantechEvaluation Services Limited NIIT Online Learning Limited and MindChampion LearningSystems Limited (Formerly known as Hole- in-the-Wall Education Limited) and theirrespective shareholders and creditors which was approved by the Hon'ble Delhi High Courtvide its Order pronounced on May 08 2015 and which became effective from May 23 2015 onfiling the certified copy of High Court Order with the Registrar of Companies NCT ofDelhi and Haryana and was applicable from April 01 2014 ("the AppointedDate") the Authorized Share Capital of the Company was increased to Rs.1386000000/- comprising of 150000000 Equity Shares of Rs. 1/- each 250000000Equity Shares of Rs. 2/- each 13600000 Equity Shares of Rs. 10/- each 3500000008.5% Cumulative Redeemable Preference shares of Rs. 1/- each and 2500000 RedeemablePreference Shares of Rs. 100/- each.

During the year the Company has consolidated 150.000. 000 Equity Shares of Rs. 1/-each into 75.000. 000 Equity Shares of Rs. 2/- each and sub-divided 13600000 EquityShares of Rs. 10/- each into 68000000 Equity Shares of Rs. 2/- each.

During the year under review the Company has allotted 330636 Equity Shares under theNIIT Employee Stock Option Scheme 2005.

Subsidiary Companies

A report on the performance and financial position of each of the subsidiariesassociates and joint venture companies as per the Companies Act 2013 is provided asAnnexure-A in the prescribed Form AOC-1.

The Annual Financial Statements of the subsidiaries will be made available to theMembers of the Company/ Subsidiary Companies seeking such information at any point oftime. The Annual Financial Statements of the subsidiaries are also available forinspection for any Member during the business hours at the Registered Office of theCompany and subsidiary companies and the same can be accessed from the website of theCompany i.e.

Consolidated Financial Statements In compliance with Regulation 33 of theSecurities Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") and Section 129(3) of the CompaniesAct 2013 read with the relevant rules made thereunder the Consolidated FinancialStatements are prepared in accordance with the Accounting Standard (AS) - 21 onConsolidated Financial Statements read with AS- 23 on Accounting for Investments inAssociates and AS-27 on Financial Reporting of Interests in Joint Ventures. TheConsolidated Financial Statements together with Auditors' Report thereon form part of theAnnual Report.

Transfer of Amounts to Investor Education and Protection Fund

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act 1956relevant amounts which remained unpaid or unclaimed for a period of seven years have beentransferred by the Company from time to time on due dates to the Investor Education andProtection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason September 08 2015 (date of last Annual General Meeting) on the website of the Company investor-information.aspx

Corporate Social Responsibility (CSR)

In compliance with the requirement of Section 135 of the Companies Act 2013 read withthe Companies (Corporate Social Responsibility) Rules 2014 as amended from time to timethe Company has constituted a Corporate Social Responsibility Committee ("CSRCommittee"). As on the date of this report following are the members of CSRCommittee:

1. Mr. Surendra Singh - Chairperson

2. Mr. Rajendra S Pawar

3. Mr. Vijay K Thadani

4. Mr. Anand Sudarshan

The CSR Policy as approved by the Board of Directors of the Company is available on theCompany's website at


During the year under review the provisions corresponding to CSR under the CompaniesAct 2013 were not applicable on the company. Accordingly the Company has not made anygrant during the Financial Year 2015-16 towards CSR initiatives. The Report on CSRActivities is given in Annexure - B forming part of this Report.

Corporate Governance

Your Company's philosophy on Corporate Governance envisages the highest level oftransparency accountability and equity in all facets of its operations as well as in allinteractions with its Stakeholders including Shareholders NIITians Lenders andRegulatory Authorities. Your Company has also implemented several best practices inCorporate Governance such as "Whistle blower policy" and "Code of Conducton Ethics".

Your Company has complied with all the requirements relating to Corporate Governance asstipulated in the Listing Regulations. The Report of the Directors on Corporate Governanceis given as a separate section titled "Corporate Governance Report". TheCertificate from the Practicing Company Secretary confirming the compliance to theconditions of the Corporate Governance stipulated in Para E of Schedule V of ListingRegulations is annexed to the Corporate Governance Report.

Management Discussion and Analysis Report

As required by Regulation 34(e) of the Listing Regulations the Management Discussionand Analysis Report is annexed and forms part of this Annual Report. Directors

As per the provisions of Section 152(6) of the Companies Act 2013 Mr. Rajendra SPawar will retire by rotation in the ensuing Annual General Meeting and being eligiblehas offered himself for re-appointment. The Company has received declarations from all theIndependent Directors confirming that they meet the criteria of Independence as prescribedunder Section 149(6) of the Companies Act 2013 and Regulation 25 of Listing Regulations.

Key Managerial Personnel

As on date of this report following officials are the 'Key Managerial Personnel' ofthe Company under the Companies Act 2013:

1. Mr. Vfjay K Thadani - Vice Chairman & Managing Director

2. Mr. P Rajendran - Joint Managing Director

3. Mr. Rahul Keshav Patwardhan - Chief Executive Officer

4. Mr. Rohit Kumar Gupta - Chief Financial Officer

5. Ms. Arpita B Malhotra - Company Secretary During the year under review Mr. MukeshKumar resigned as Company Secretary of the Company w.e.f. the close of business hours onDecember 02 2015. After the end of Financial Year Ms. Arpita B Malhotra has beenappointed as Company Secretary of the Company w.e.f. May 10 2016.

Meetings of the Board

During the year Six (6) Board Meetings were convened and held. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013 andListing Regulations. For further details please refer Corporate Governance Report formingpart of this Annual Report.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard has carried out the annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Audit Nominationand Remuneration CSR and Stakeholders' Relationship Committees. A structured evaluationform was administered after taking into consideration inputs received from the Directorscovering various aspects of the Board's functioning such as adequacy of the composition ofthe Board and its Committees Board Effectiveness Key Stakeholders connect Ethics andCompliances Evaluation of Company's Performance Project Management and Internal Controland Audits. A separate exercise was carried out to evaluate the performance of individualDirectors including the Chairperson of the Board who were evaluated on parameters such aslevel of engagement and contribution effective participation in Board / CommitteeMeetings independence of judgement safeguarding the interest of the Company and itsminority shareholders providing expert advice to Board and contributing in deliberationswhile approving related party transactions.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed the Nomination and Remuneration Policy as stated in the Corporate GovernanceReport.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 andRegulation 22 of Listing Regulations a Vigil Mechanism for Directors and employees toreport genuine concerns has been established by the Company. The Whistle Blower Policy isavailable on the website of the Company at the following link:

Documents/Other%2 0Disclosures/Whistle%20 Blower%20 Policy pdf

Directors' Responsibility Statement

As required under Section 134(3)(c) read with 134(5) of the Companies Act 2013 theBoard of Directors of your Company hereby state and confirm:

a) That in the preparation of the Annual Accounts the applicable Accounting Standardswere followed along with proper explanation relating to material departures;

b) That the directors had selected such Accounting Policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of theFinancial Year and of the profit and loss of the Company for that period;

c) That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

d) That the directors had prepared the Annual Accounts on a going concern basis;

e) That the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Information relating to Conservation of Energy Technology Absorption Research andDevelopment Exports Foreign exchange earnings and Outgo and other information formingpart of the Directors' Report in terms of Section 134(3)(m) of the Companies Act 2013and the Rules made thereunder.

a) Conservation of energy

Although the operations of the Company are not energy intensive the management hasbeen highly conscious of the criticality of conservation of energy at all the operationallevels and efforts are made in this direction on a continuous basis. Adequate measureshave been taken to reduce energy consumption whenever possible by using energy efficientequipment. The requirement of disclosure of particulars with respect to conservation ofenergy as prescribed in Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 are not applicable to the Company and hence are notprovided.

b) Technology absorption

Your Company believes that in addition to progressive thought it is imperative toinvest in research and development to ascertain future exposure and prepare forchallenges. In its endeavor to obtain and deliver the best your Company has entered intoalliances / tie-ups with major global players in the Information Technology industry toharness and tap the latest and the best of technology in its field upgrade itself in linewith the latest technology in the world and deploy / absorb technology wherever feasiblerelevant and appropriate.

c) Research and Development

The Company believes that technological obsolescence is a reality. Only progressiveresearch and development will help us to measure up to future challenges andopportunities. We invest in and encourage continuous innovation. During the year underreview expenditure on research and development is not significant in relation to thenature and size of operations of your Company.

d) Foreign exchange earnings and outgo

i) Activities relating to exports initiatives taken to increase exports developmentof new export markets for products and services and export plans.

The Company exports customized learning content to its overseas clients to meet theirvarying learning needs. The Company develops content in a range of subjects for widelyvaried audience. The Company will continue to strengthen its presence in USA EuropeChina Africa South East Asia etc. with a view to increase exports.

ii) Total foreign exchange earned and used

The details of foreign exchange earnings and outgo are mentioned in Notes Nos. 31 to 34contained in the Notes forming part of the Annual Financial Statements for the FinancialYear ended March 31 2016.

Auditors and Auditors' Report

M/s Price Waterhouse Chartered Accountants (Firm Registration Number FRN301112E) wereappointed as Statutory Auditors of the Company at the 31st Annual GeneralMeeting of the Company to hold office from the conclusion of the Annual General Meetingheld in the year 2014 till the conclusion of the Annual General Meeting scheduled to beheld in the year 2017 subject to ratification by members at every consequent AnnualGeneral Meeting. Therefore ratification of appointment of Statutory Auditors is beingsought from the members of the Company at the ensuing AGM. There has been noqualification reservation or adverse remark or disclaimer in their Report.

During the year under review the Auditors had not reported any matter under Section143(12) of the Companies Act 2013 therefore no detail is required to be disclosed underSection 134(3)(ca) of the said Act.

The notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not require any further comments.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Nityanand Singh & Co. Company Secretaries to conduct Secretarial Auditfor the Company for the Financial Year 2015-16. The Secretarial Audit Report is annexedherewith as Annexure-C. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

Cost Auditors

In terms of Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Rules 2014 the Board of Directors of the Company upon recommendation of theAudit Committee have appointed M/s. Ramanath Iyer and Co. Cost Accountants New Delhi asthe Cost Auditors of the Company to carry out the cost audit for the Financial Year2015-16. The ratification of remuneration payable to Cost Auditors is being sought fromthe members of the Company at the ensuing AGM.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9 in terms ofSection 92(3) of the Companies Act 2013 is annexed herewith as Annexure-D.

Related Party Transactions

All related party transactions that were entered into during the Financial Year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.

The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a Related Party Transactions Policy for identifying reviewing andapproving transactions between the Company and Related Parties in compliance with theapplicable provisions of the Companies Act 2013 the Rules thereunder and ListingRegulations. The said Policy is available on the website of the Company at Policy_final.pdf.

All Related Party Transactions are placed before the Audit Committee and also beforethe Board for its approval. The details of contracts or arrangements with related partiesin form AOC-2 is annexed herewith as Annexure-E.

Particulars of Loans Guarantees or Investments

Details of Loans Guarantees or Investments covered under the provisions of Section 186of the Companies Act 2013 are given in the Notes to the Financial Statements.

Particulars of Employees

The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure-F(a) to this Report.

A statement containing the names of every employee employed throughout the FinancialYear and in receipt of remuneration of Rs. 60 lakh or more or employed for part of theyear and in receipt of Rs. 5 lakh or more a month under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed asAnnexure-F(b) to this Report.

Public Deposits

In terms of the provisions of Section 73 to 76 of the Companies Act 2013 read with therelevant rules made thereunder your Company has not accepted any fixed deposits from thepublic.

Detail of significant and material orders passed by the regulators courts tribunals

During the year under review no significant or material orders were passed by theRegulators or Courts or Tribunals impacting the going concern status and Company'soperations in future.

Human Resources and Employee Stock Option Scheme

NIITians are the key resource for your Company. Your Company has been able to createand continuously improve a favorable work environment that encourages innovation andmeritocracy at all levels.

Employee relations remained cordial at all the Company's locations. The Directors takethis opportunity to record their appreciation for the outstanding contribution of allNIITians.

During the Financial Year 2005-06 your Company had set up NIIT Employee Stock OptionPlan 2005 (ESOP-2005) with the objective of attracting and motivating employees byrewarding performance and retaining the best talent. The aim is to develop a sense ofownership among the employees within the organization and to align your Company's stockoption scheme with the best practices in the Industry. In accordance with the applicableprovisions of the Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 the particulars of the options granted vested exercised and allottedunder the ESOP-2005 are appended as Annexure-G and form part of this report.

The Nomination and Remuneration Committee has granted 1600000 Employee Stock Options(Grant #12) at Rs. 41.60 per option/share in June 2015 1535000 Employee Stock Options(Grant #13) at Rs. 52.15 per option/share in July 2015 35000 Employee Stock Options(Grant #14) at Rs. 75.65 per option/share and 90000 Employee Stock Options (Grant #15) atRs. 75.65 per option/share in January 2016 to the eligible employees under ESOP-2005.Further none of the employee was granted options equal to or exceeding 1% of the issuedcapital of the Company.


Your Directors take this opportunity to thank all investors clients licenseestechnology partners vendors financial institutions banks regulatory and governmentalauthorities media and stock exchanges for their continued support during the year underreview. We place on record our appreciation of the contribution made by our employees atall levels.

For and on behalf of the Board
Rajendra S Pawar
Place : New Delhi Chairman
Date : May 10 2016 DIN:00042516