Your directors are pleased to present the 49th annual reportand the Company's audited financial statements (standalone and consolidated) for thefinancial year ended March 31 2021.
The financial performance of the Company (standalone and consolidated)for the financial year ended March 31 2021 is summarized below:
(Rs. in Lakhs)
| ||Standalone ||Consolidated |
|Particulars || ||For the year ended || |
| ||31.03.2021 ||31.03.2020 ||31.03.2021 ||31.03.2020 |
|Total income for the year ||106721 ||113221 ||279752 ||288092 |
|Profit before finance charges depreciation & tax ||28686 ||25138 ||131831 ||120029 |
|Less: Finance charges ||1362 ||2052 ||34815 ||31877 |
|Profit before depreciation and taxation ||27324 ||23086 ||97016 ||88151 |
|Less : Depreciation ||3220 ||3188 ||29978 ||28865 |
|Profit before exceptional items but after depreciation ||24104 ||19898 ||67039 ||59287 |
|Exceptional items net ||116 ||- ||116 ||- |
|Profit before tax ||24221 ||19898 ||67155 ||59287 |
|Less : Current tax ||8643 ||6913 ||15312 ||9715 |
|- Deferred tax expense ||(261) ||(116) ||(3602) ||(3749) |
|Profit after tax from continued operations ||15838 ||13101 ||55446 ||53321 |
|Profit after tax from discontinued operations ||(378) ||(245) ||(378) ||(245) |
|Profit after tax for the year ||15460 ||12856 ||55068 ||53075 |
|Non-Controlling interest ||- ||- ||12744 ||13530 |
|Net profit attributable to shareholders of the Company ||15460 ||12856 ||42324 ||39545 |
|Appropriations || || || || |
|Dividend on equity share capital ||- ||4995 ||- ||4995 |
|Corporate dividend tax ||- ||1027 ||- ||1027 |
The Company registered an improved standalone and consolidated EBITDAof 26.9% and 47.1% respectively for FY 2021 relative to 22.2% and 41.7% for the previousyear. Considering the de-growth in the Indian economy due to Covid-19 and disruptions inproduction and logistics the standalone financials reflect strong the Ferro Alloyoperations of the Company to seize upon the spurt in demand from the dependent steelindustry. The consolidated financials are marked by a dip in Indian power revenueprovision for expected credit loss and maintenance outages at the Zambian entity levelwhich impacted the Revenue and EBITDA though partly offset by forex gains and higherinterest income.
The Company's Ferro Alloy operations have been at their optimumlevel in both Telangana and Odisha plants. At the same time the latter secured the longterm conversion arrangement with TATA Group assuring itself of stability in the near term.The power business has benefitted by sustained captive consumption and relatively bettervalue addition despite the severe weakness in the merchant power trade throughout FY2020-21. The Company considers the exit from Sugar operations in the previous year to betimely with an improved return on overall capital employed and is taking necessary stepsto divest the equipment's in the Sugar division during the FY 2022.
The Company's foray into healthcare enabled services andcommercial agriculture through overseas subsidiaries is set to obtain tractionnotwithstanding the severe impact on timelines owing to the COVID-19 pandemic.
Review of Operations
During the year under review notwithstanding the disruption caused bythe pandemic your Company's performance significantly improved over the previousyear.
Manganese Alloy business has driven the revenue and profitabilityduring FY 2020-21 aided by better cost management and sustained realisations. The marketwitnessed a progressively improved trend for manganese alloys especially in exportsafter the lockdown in April and May 2020. We are happy that the positive trend continuedin the current financial year reflecting a higher degree of sustainability ably supportedby firmingup demand in the dependent steel industry. The Company's long termprocurement plan for a significant volume of ore and its policy of index-based exportcontracts as well as firm supply contracts in the domestic market helped it overcome thevolatility to a great extent. Chromium Alloy operations have received a fillip with therenewal of conversion arrangement with TATA Group up to March 2025. Despite the costdynamics arising out of TATA's new mining concessions the conversion arrangementensures firm captive consumption and requisite value addition therefrom aside insulatingthe Company from the market vagaries associated with the sourcing of chromium orereductant and volatile finished The Company is however mindful of emerging opportunitiesin the Ferro Alloy business and formulate appropriate business plans from time to time.
The Company produced 96036 MT and sold 95711
MT of manganese alloys during FY 2021 relative to 100803 MT and97998 MT respectively in the previous year.
The Company converted 57109 MT of HCFC for
Tata Steel Limited for the FY 2021 corresponding to 68657 MT in theprevious year.
The power business operations and profitability were dictated by thecaptive consumption of power in the production of manganese and chromium alloys. Thealternative market for merchant trade of power was impacted by sector weakness and wasaccentuated by the disruption in industrial and other power consumption due to theCovid-19 pandemic during most part of FY 2020-21. It is heartening to report that theCompany has been able to persuade the local power utility in Odisha to synchronize the 60MW IPP which has remained stranded for almost seven years paving the way for itsoperations from the current financial year. Certain legal issues which were majorimpediments for operationalizing this IPP unit are in the process of resolution.
The Company generated 938.96 MU of power and after auxiliaryconsumption or transmission losses consumed 648.23 MU of power in the production of FerroAlloys and sold 174.24 MU of power to Discoms and through IEX for the financial year 2021relative to 1146.60 MU 705.69 MU and 306.64 MU respectively in the previous year.
Pursuant to the cessation of operations of Sugar Plant situated atSamalkot East Godavari District Andhra Pradesh in the previous year the Company hasinitiated the sale of equipment in the Sugar Division comprising sugar plant anddistillery which could go on during most of the FY 2021-22 as well. In parallel theinventory overhang of sugar stocks should get addressed through regular sales. The Companyis evaluating various options for monetizing the land area forming part of Sugar Divisionassets.
Your Board of Directors are pleased to recommend dividend on the equityshares at the rate of 125% ( 2.50) per share of 2/- each for the FY 2020-21 after havingconsidered various corporate actions ongoing capex and debt repayments for the FY2021-22 subject to shareholders' approval at the ensuing annual general meeting(AGM). The aggregate dividend payout amounts to 3627.64 Lakhs.
Buy-Back of Shares goods prices.
Pursuant to the decision of the Board of Directors on Buy-back ofequity shares of the Company in the open market from members otherg1 than promoters andpersons acting in concert with them up to an amount of 15000 Lakhs (maximum buybacksize) in February 2021 in accordance with the Securities and Exchange Board of India(Buy-Back of Securities) Regulations 2018 and the Companies Act 2013 the Companycommenced buyback of shares from the open market on March 3 2021. As on the date of thisreport the Company has bought back and extinguished 18364351 equity shares at anaverage price of 70.38 per equity share. The Company deployed a sum of 12924 Lakhs(excluding buyback tax securities transaction tax brokerage and other expenses)representing about 86.16% of the maximum buyback size.
Selective Reduction of Share Capital
During the financial year 2019-20 your Board of directors approved aScheme of Selective Reduction of share capital (the Scheme) to extinguish / cancel9947020 and 2800000 equity shares of the Company held by Nav Energy Private Limitedand Nava Bharat Ventures Employees Welfare Trust respectively and the same was approvedby the shareholders through a special resolution by postal ballot dated December 17 2019and was taken on record by the stock exchanges (BSE-designated stock exchange for thispurpose and NSE). Thereafter an application was filed with the Hon'ble NCLTHyderabad Bench.
The Hon'ble NCLT Hyderabad Bench on January 19 2021 allowed theScheme of Reduction of Capital of the Company and passed the Order after giving anopportunity of being heard on the Competent Authorities such as SEBI Regional Director(SER) and ROC-Telangana. The scheme was taken on record and given effect by the Registrarof Companies Hyderabad Telangana on February 12 2021. Consequent to the implementationof the aforesaid order the paid-up equity share capital of the Company was reduced from176217020 equity shares of 2/- each to 163470000 equity shares of 2/- each.
No amounts were proposed to be transferred to Reserves for the yearended March 31 2021.
The Company has not accepted any deposits from the public and as suchno amount on account of principal or interest on deposits from the public was outstandingas on the date of the balance sheet.
Listing of Equity Shares
The securities of the Company are listed at National Stock Exchange ofIndia Limited (NSE) and BSE Limited (BSE). Further the Company has no equity sharescarrying differential rights.
The Company has direct and step-down subsidiaries in India andoverseas. Consolidated financial statements have been prepared by the Company inaccordance with the requirements of Ind AS 110 "Consolidated FinancialStatements" as specified under the provisions of Section 133 of the Companies Act2013 ("the Act").
As per the provisions of Section 136 of the Act separate auditedfinancial statements of subsidiaries are placed by the Company on its website at www.nbventures.com and a report on the performance and financial included in the consolidatedfinancial pursuant to Rule 8(1) of Companies (Accounts) Rules 2014 is enclosed as Annexure- 1 to this report. Statement containing the salient features of the financialstatement of subsidiaries for the year ended March 31 2021 in Form AOC-1 (Pursuant tofirst proviso to Sub-Section (3) of Section 129 read with Rule 5 of Companies (Accounts)Rules 2014) is enclosed as Annexure - 2 to this report.
Nava Bharat (Singapore) Pte. Limited (NBS)
NBS a wholly-owned subsidiary of the Company is the investment armand holding company of the overseas strategic investments in coal mining and powergeneration principal investment being in Zambia.
Maamba Collieries Limited (MCL)
MCL is a step-down subsidiary of the Company in
Zambia with NBS holding 64.69% of the equity stake while 35% is held byZCCM Investments Holdings PLC. a Government of Zambia undertaking. MCL pursues twinbusinesses of coal and power sale in Zambia and holds a strategic financial andoperational position in the consolidated financials of the Company. The Group'sexposure to MCL is about 182005 Lakhs (US$ 247.6 Million) as at March 31 2021and is represented by the Equity Share capital and Shareholder loans including interestaccrued thereon.
MCL's predominant business is the sale of power to the local powerutility ZESCO under a long term PPA on "take or Pay" based on the availabilityof the 300 MW integrated coalfired power plant. MCL generated 1896.10 MU of power andafter auxiliary consumption and transmission losses sold 1678.50 MU to ZESCO registeringan availability of 77.7% and PLF of 72.1% for FY 2021 while the corresponding numbers inthe previous year were 2010.45 MU 1781.25 MU 76.6% and 76.4% respectively. The Plantavailability was impacted with the major maintenance schedule of one unit during Q4 of FY2021 and which outage has continued in the current year as certain critical parts of theturbine needed replacement involving a long lead time.
Coal Mining Operations
The coal mining operations of MCL have contributed to the overallprofitability exceptionally with an increased merchant coal sales and improved pricerealization. The Company made external sales of 375412 MT of coal up by 55.8% in FY2021 compared to 241016 MT in the previous year. As the Company has operationalized anew coal pit during FY 2021 the volume of coal sales should sustain at higher levels inthe coming years.
Debt Payment Default & Restructuring
Members are aware that MCL has contracted a long-term debt aggregatingto 433678 Lakhs (US$ 590.0 Million) to part-fund its Coal and Power project. This debtwas obtained based on the project assets and its contractual arrangements for power saleto the local utility the payment obligations of which are guaranteed by the Government ofZambia.
The debt however has no recourse to the shareholders / sponsors ofMCL except for the limited purpose aggregation in the consolidated financials andtherefore does not affect the Standalone operations of your Company in India.
MCL commenced repayment of the long-term debt and the currentoutstanding debt is about 303501 Lakhs (US$412.9 Million) as at March 31 2021. MCL hasbeen facing payment shortfalls against its monthly power bills to ZESCO the local powerutility. As the outstanding receivables from ZESCO have accumulated to about 317640 Lakhs(US$ 432.1 Million) as at March 31 2021 on account of the cumulative payment shortfallMCL's cash flows were severely impacted. As a consequence MCL could not pay threehalf-yearly principal instalments of the debt and so breached the Financing Documents onseveral covenants and the Lenders have served Notices of Reservation of Rights againstthese Payment Defaults.
The Power Purchase arrangement postulates International Arbitration atLondon as dispute resolution process. Following the huge payment shortfall from ZESCO andas there was no firm payment plans forthcoming MCL and the Lenders instituted theInternational Arbitration against ZESCO at London and the proceedings are underway. Inparallel MCL has been engaging with ZESCO for a prospective tariff reduction so as toensure full secured payment of its monthly bills and to provide for debt service as wellas envisaged equity returns subject to certain critical changes in the contracts withZESCO and the Lenders.
MCL envisages that the Arbitration could help it pursue the historicaloutstanding receivables up to a point in time and prospective tariff help it avoid cashflow mismatches from thereon. MCL expects the outcome of both the pursuits during thelater part of FY 2021-22.
Following the agreement on prospective tariff reduction and securedpayment arrangement for monthly bills MCL hopes to have the outstanding debt restructuredand has been engaging with the Lenders accordingly. With this restructuring the paymentdefaults against the loans should get addressed.
Legal case with ZCCM-IH
MCL has a subsisting litigation with ZCCM-IH the Co-Sponsor andShareholder for an amount of 7350 Lakhs (US$ 10.0 Million). This amount was advanced byZCCM-IH to MCL and is considered as a Shareholder Loan requiring compliance withsubordination thereof to long term debt. However ZCCM-IH has been disputing the saidstand and instituted a legal case for recovery. The matter is sub-judice in a ZambianCourt.
Nava Energy Pte. Limited Singapore (NEPL) Nava Energy Pte.Limited Singapore the Wholly
Owned Subsidiary (WOS) of the Company continues to render qualityO&M services to MCL for its 300 MW power plant in Zambia. The O&M operationsleveraged upon the technical support extended by the Company and its Indian subsidiariesto ensure trouble-free operations in Zambia. For MCL O&M Operations form part ofcritical operational costs and so has been regular in payments of O&M Fee as percontract.
NEPL hopes to expand the customer profile in this service offering aswell as related technical services if any and keeps this as a thrust area for growth.
NEPL made a distribution of a final dividend of 758 Lakhs (US$1.0Million) to the Company during the year under review which formed part of other income.
Nava Energy Zambia Limited Zambia (NEZL)
Nava Energy Zambia Limited is a Zambian Step-down subsidiary and a WOSof NEPL. NEZL has engaged qualified sub-contractors in Zambia to carry out on-site worksat the power plant. NEZL has etched a good name as the onsite service provider by engagingwith the owner and subcontractors for day to day operations of the power plant in all itsfacets.
Nava Agro Pte. Limited Singapore (NAPL)
NAPL is a Wholly Owned Subsidiary of the Company and is intended to bethe intermediate holding company in Singapore to pursue investments in commercialagriculture and related businesses initially in Zambia through Kawambwa Sugar Limited.
Kawambwa Sugar Limited Zambia (KSL)
Kawambwa Sugar Limited (formerly Kariba Sugar adjustment could Limited)(KSL) is a Zambian Company (step-down-subsidiary) which has been allocated 10000 ha ofland by the Government of Zambia to pursue commercial agri-ventures including processingthereof. NAPL holds 100% shareholding of KSL. KSL has set up the site infrastructurecomprising pilot plantation site internal roads site office and staff residences etc. Ithas been pursuing with the Government for proper approach road and proper powerconnectivity to the site critical needs to take up any kind of project activities.
Nava Holding Pte. Limited Singapore (NHPL)
Nava Holding Pte. Limited Singapore (NHPL) was incorporated inSingapore to hold investments in emerging areas of growth including the healthcareenabled services being undertaken by the Group.
Healthcare Enabled Services in APAC Region TIASH Pte. LimitedSingapore (TPL)
Nava Holding Pte. Ltd. holds a 65% equity stake in Tiash Pte. Ltd. andthe balance 35% is held by Mr. Timothy Robert Cushway CEO as Sweat Equity. The healthcareenabled services under TIASH and its operating subsidiaries in Singapore and Malaysiaentail low capital outlay principally for marketing distribution and administration ofthe intravenous iron medicine in the APAC region known for premium lifestyle healthcare.TIASH has made good marketing strides in Malaysia and Singapore where exclusivedistribution rights exist for the world's leading medicine in this space.
Owing to the disruption due to the Covid-19 pandemic revenue take offunder these services has been delayed but is catching up in the current year.
Nava Bharat Energy India Limited (NBEIL)
NBEIL is a step-down but wholly-owned subsidiary of the Company with26% of equity directly held by the Company and 74% being held through Nava Bharat ProjectsLimited (NBPL).
As the power sector was reeling under severe slow down during thepandemic times the 150 MW power plant of NBEIL was under shutdown through FY 2021 exceptfor the last week of March 2021 due to unremunerative tariffs over the power exchanges.NBEIL received offtake compensation from the Utility pertaining to earlier contracts thusmitigating the strain on the cash flow front. NBEIL extends back end and supervisoryservice to NEZL Zambia under a contractual arrangement.
NBEIL also runs an Ash Products Plant for part utilization of bed Ashand fly Ash to produce premium quality bricks and pavers. Income from Ash Products Plantforms part of the other operating income of the Company. Recently the Company has addedproduction of Manganese Bricks to the array of products under a conversion arrangementwith the Company being the holding Company of NBEIL. A second batching plant with a capexoutlay of 800 Lakhs is under construction which will allow production of Ash products andManganese Bricks simultaneously.
Nava Bharat Projects Limited (NBPL)
NBPL is a Wholly Owned Subsidiary of the
Company and is engaged in extending technical and commercial servicesto the group Companies. It plans to expand its foray of services outside the Group. Partof the service offering relates to back end critical technical and commercial supportunder the O&M contract that NEPL has with MCL. NBPL holds 74% of the Equity Sharecapital of NBEIL making it a step-down subsidiary to the Company. This shareholding issubject to an attachment by the Enforcement Directorate of the government of Indiafollowing a CBI case against an associate company called Navabharat Power Private Limited(NPPL) as detailed below. The Central Bureau of Investigation (CBI) and the EnforcementDirectorate (ED) of GOI instituted cases making allegations of misrepresentationpertaining to the allotment of coal block to NPPL. The cases were instituted in 2013against the erstwhile Directors of NPPL one of them being the Managing Director of theCompany and against NBPL. Based on the non-involvement of the Company's MD in thealleged offences it is felt that a favorable should ensue in due course.
While the CBI case is proceeding ED had attached the NBPL'sshareholding in NBEIL and further sought transfer which was contested by NBPL and a staywas obtained.
Brahmani Infratech Private Limited (BIPL)
BIPL is a subsidiary of the Company with a 65.74% equity stake and hasprincipal objects to pursue infrastructure and related projects. In this pursuit it hadbeen allocated a 250 acres land by the erstwhile Andhra Pradesh Government to establish anIT SEZ and support infrastructure. BIPL entered into a Joint Development Agreement (JDA)with Mantri Group. The project had to be abandoned upon Mantri Group reneging on the JDAand a dispute has arisen between the two parties. BIPL had since surrendered the land tothe Government and obtained most of the consideration paid.
The case involving Mantri Group went through protracted litigationthrough Arbitration at first and is before the Hon'ble High Court of Telangana. BIPLis also facing a legal case alleging oppression by one of the shareholders and the matteris presently pending before NCLT Hyderabad.
BIPL has invested in select properties in and around Hyderabad and isawaiting the disposal of the case before NCLT to engage in the stated objects.
Kinnera Power Company Pvt Ltd (KPCPL)
The Company is holding 26% of equity shares in KPCPLwhich is continuedas specified National Highway Authority of India (NHAI). As per the professed intentionand there being no economic interest the Company plans to fully off-load its stake inKPCPL in favor of Meenakshi Infra Group as per the regulations. Accordingly no economicinterest from KPCPL is being factored in the consolidated financials nor the accounts ofKPCPL appended in the Annual report of the Company.
Outlook and Future Plans
"Management Discussion and Analysis" contains a section onthe Company's outlook and future plans and members may please refer the same on this.
Change in the Nature of Business
There has been no change in the nature of business of the Companyduring the year under review.
Conservation of Energy Technology Absorption and Foreign Exchange
In accordance with the provisions of Section 134 (3)(m) of the Act therequired information relating to conservation of energy technology absorption and foreignexchange earnings and outgo has been enclosed as Annexure 3 to this report.
Corporate Social Responsibility (CSR)
The annual report on CSR activities in terms of outcome Section 135 ofthe Act and the details about the policy developed and implemented by the Company on CSRinitiatives taken during the year are enclosed as Annexure 4 to this report.A detailed policy on CSR is placed on the Company's website under the web link:https://www.nbventures.com/policies-code-of-conduct/.
In accordance with Section 92(3) of the Act and rule 12(1) of theCompanies (Management and Administration) Rules 2014 (as amended) a copy of the AnnualReturn of the Company shall be placed on the Website of the Company at https://www.nbventures.com/financials/.
Contracts or Arrangements with Related Parties
The particulars of contracts or arrangements with related partiesreferred to in sub-section (1) of Section 188 in Form AOC-2 pursuant to clause (h) ofsub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules2014 are enclosed as Annexure 5 to this report.
The policy on materiality of related party transactions and also ondealing with the related party transactions as approved by the Audit Committee and theBoard of Directors was placed on the website of the Company at www.nbventures.com.
Particulars of Loans Guarantees or Investments
The details of loans given guarantees provided and investments madeif any during the Financial Year ended on March 31 2021 are enclosed in Annexure 6 to this Report in compliance with the provisions of Section 186 of the Actread with the Companies (Meetings of the Board and its Powers) Rules 2014. Theparticulars of aggregate loans guarantees and investments under Section 186 of the Actare disclosed in Financial Statements which may be read as part of this Report.
Management Discussion and Analysis
The Management Discussion and Analysis Report for the year under reviewas stipulated under Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("the ListingRegulations") is enclosed as Annexure 7.
Business Responsibility Report
The Business Responsibility Report (BRR) as stipulated under Regulation34(2)(f) of the Listing Regulations is applicable to your Company for FY 2020-21 and isenclosed as a separate section to this Annual Report.
A separate report on Corporate Governance as required under the ListingRegulations is provided as a separate section to this Annual Report.
Disclosures Under Regulation 34(3) read with Schedule V of the ListingRegulations
(Rs. in Lakhs)
|In the accounts of ||Particulars ||Amounts at the year ended 2020-21 ||Maximum amount of loans / advances / investments outstanding during the year 2020-21 |
|1 Nava Bharat Ventures Limited (NBVL) (Holding Company) ||Loans given to: Nava Bharat Energy India Ltd. (Subsidiary of NBVL) ||12787.48 ||15364.38 |
|Nava Holding Pte. Ltd. ||Loans given to: || || |
|2 (NHPL) (Wholly owned subsidiary of NBVL) ||TIASH Pte. Ltd. ||2528.84 ||2528.84 |
| ||(Subsidiary of NHPL) ||(US$ 3440385) ||(US$ 3440385) |
|3 Nava Bharat Projects Limited (NBPL) ||Loans given to: Nava Bharat Energy India Ltd. ||Nil ||5000.00 |
|(Wholly owned subsidiary of NBVL) ||(Subsidiary of both NBPL and NBVL) || || |
|Nava Bharat (Singapore) Pte. Ltd. (NBS) ||Loans given to: ||65983.47 ||65983.47 |
|4 (Wholly owned subsidiary of NBVL) ||Maamba Collieries Ltd. (Subsidiary of NBS) ||(US$ 89767687) ||(US$ 89767687) |
The Board of directors of the Company has an optimum combination ofExecutive Non-Executive and Independent Directors with one woman Independent Director.
Independent and Non-Executive Directors
As prescribed under SEBI (LODR) Regulations 2015 and as per Section149(6) of the Companies Act 2013 the particulars of Non-Executive and IndependentDirectors are as under: Dr. D. Nageswara Rao Mr. K. Durga Prasad Mr. GP Kundargi Mr. AIndra Kumar Mrs. B. Shanti Sree and Mr. Balasubramaniam Srikanth.
Except for Mr. Balasubramaiam Srikanth who was co-opted as anadditional (non-executive and independent) director on June 17 2021 and Mrs. B.Shanti Sree who was appointed as an independent director by the shareholders at 48th
AGM held on September 2 2020 all were appointed as independentdirectors by the shareholders at 47th AGM held on August 8 2019.
Changes in Directors and Key Managerial Personnel (KMP):
During the year under review Mr. CV Durga Prasad has been re-appointedas Director Business Development with effect from April Board at its meeting heldon February 8 2021 subject to the shareholders' approval in the ensuing AGM.Further Mr. Balasubramaiam Srikanth has been co-opted as an additional (non-executive andindependent) director on June 17 2021 to hold the office up to the ensuing AGM. In theopinion of the Board with regard to integrity expertise and experience Mr.Balasubramaiam Srikanth fulfils all the criteria and other conditions for appointing himas an Independent Director of the Company as specified in the Act and the ListingRegulations. Hence the Board of directors based on the recommendations of the Nominationand Remuneration Committee considered and approved the appointment of Mr.Balasubramaiam Srikanth as an Independent director for a period of two (2) years w.e.fJune 17 2021 subject to the approval of shareholders in the ensuing AGM.
The following are the whole-time directors of the Company. Mr. D.Ashok Chairman Mr. P. Trivikrama Prasad Managing Director Mr. Ashwin Devineni ChiefExecutive and Mr. C.V. Durga Prasad Director Business Development.
Declarations of Independent Directors
All independent directors of the Company have given a declaration thatthey meet the criteria of independence as provided in sub-section (6) of section 149 ofthe Act. The Company also received a declaration of compliance of sub-rule (1) andsub-rule (2) of Rule 6 of the Companies (Appointment and Qualifications of Directors)Rules 2014.
Directors Retiring By Rotation
Pursuant to the provisions of the Act Mr. Ashwin Devineni retires atthe AGM and being eligible offers himself for re-appointment.
Number of Meetings of the Board
During the financialyear five Board meetings were held on June 26August 3 November 11 2020; February 8 and February 26 2021 in compliance withprovisions of the Companies Act 2013 the Listing Regulations and Secretarial Standards.
Performance Evaluation of the Board
Pursuant to the provisions of the Act and the
Listing Regulations the Board has carried out annual performanceevaluation of its own the individual directors as well as the Board committees (Auditcommittee Nomination and Remuneration committee Corporate Social Responsibilitycommittee and Stakeholders Relationship committee). A structured set of criteria wasadopted after taking into consideration the inputs received from the directors coveringvarious aspects of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board 2021 by the culture execution and performance ofspecific duties obligations and governance. Evaluation of the Board members is conductedon an annual basis by the Board Nomination and Remuneration Committee and IndependentDirectors with a specific focus on the performance and effective functioning of the Boardand individual directors.
The Nomination and Remuneration Committee had specified criteria forperformance evaluation of Directors Committees and Board as a whole and recommended thesame to the Board for evaluation.
Performance indicators for evaluation of independent directors:
Independent directors have three key roles governance control andguidance. Some of the performance indicators based on which the independent directors areevaluated are:
Ability to contribute to and monitor corporate governancepractices.
Ability to contribute by introducing international best practices toaddress top management issues.
Active participation in long term strategic planning.
Commitment fulfillment of a Director's the obligations andfiduciary responsibilities.
Attendance: The performance evaluation of
Independent or non-executive directors is done by the Board annuallybased on criteria of attendance and contributions at Board/Committee meetings as also therole played other than at meetings.
The evaluation process also considers the time spent by each of theBoard members core competencies personal characteristics accomplishment of specificresponsibilities and expertise.
Policy on Directors' Appointment Remuneration & Other Details
The Company adopted a policy relating to the remuneration. This Policycovers the remuneration and other terms of employment for the Company's ExecutiveTeam. The remuneration policy for members of the Board and management aims at improvingthe performance and enhancing the value of the Company by motivating and retaining themand to attract the right persons to the right jobs in the Company. The object of thisRemuneration Policy is to make your Company a desirable workplace for competent employeesand thereby secure competitiveness future development and acceptable profitability. Inorder to achieve this it is imperative that the Company is in a position to offercompetitive remuneration in all its operational locations.
A detailed policy on remuneration of the Directors and SeniorManagement is placed on the Company's website under the web link:https://www.nbventures. com/policies-code-of-conduct/.
Policy for Selection of Directors and Determining Directors'Independence
The Nomination and Remuneration committee identifies persons who arequalified to become directors and who may be appointed in senior management in accordancewith the criteria laid down and recommend to the Board for their appointment and removal.
The Criteria for the Appointment of Directors KMPs and SeniorManagement
A person for appointment as director KMP or in senior managementshould possess adequate qualifications expertise and experience for the positionconsidered for appointment. The Nomination and Remuneration committee decides whetherqualification expertise and experience possessed by a person are sufficient for theconcerned position.
The Committee ascertains the credentials and integrity of the personfor appointment as director KMP or senior management level and recommends to the Boardhis / her appointment.
The Committee while identifying suitable persons for appointment tothe Board will consider candidates on merit against objective criteria and with dueregard for the benefits of diversity on the Board.
The Nomination and Remuneration Committee shall assess the independenceof directors at the time of appointment re-appointment and the Board shall assess thesame annually. The Board shall re-assess determination of independence when any newinterests or relationships are disclosed by a Director.
The criteria of independence are as prescribed in the Act and thelisting regulations. The independent directors shall abide by the Code specified for themin Schedule IV of the Act.
Committees of the Board
Currently the Board has five committees: The Audit CommitteeNomination and Remuneration Committee Corporate Social Responsibility CommitteeStakeholders' Relationship Committee and Risk Management Committee.
The composition of the committees in compliance with the applicableprovisions of the Act Rules and Regulations are as given below.
|Name of the Committee ||Composition of the Committee ||Remarks |
| ||Dr. D. Nageswara Rao Chairman ||The Audit Committee of the Board of Directors was constituted in conformity with the requirements of Section 177 of the Act and regulation 18 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above. |
|Audit Committee ||Mr. K. Durga Prasad Member || |
| ||Mr. A. Indra Kumar Member ||All recommendations made by the Audit Committee during the year were accepted by the Board. |
|Nomination and Remuneration Committee ||Dr. D. Nageswara Rao Chairman ||The Nomination and Remuneration Committee of the Board of Directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 19 of the Listing Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above. |
| ||Mr. K. Durga Prasad Member || |
| ||Mr. A. Indra Kumar Member || |
| ||Mr. D. Ashok Chairman ||The Corporate Social Responsibility Commit- tee of the Board of Directors was constituted in conformity with the requirements of Section 135 of the Act. |
|Corporate Social Responsibility Committee ||Dr. D. Nageswara Rao Member || |
| ||Mr. K. Durga Prasad Member ||The Committee monitored the implementation of the CSR Policy from time to time. |
| ||Mr. K. Durga Prasad Chairman ||The Stakeholders' Relationship committee of the Board of Directors was constituted in conformity with the requirements of Section 178 of the Act and Regulation 20 of the Listing |
|Stakeholders' Relationship Committee ||Mr. P. Trivikrama Prasad Member || |
| ||Mr. GP Kundargi Member ||Regulations and its role has been the same as stipulated in the Act and the Regulations mentioned above. |
| || ||Risk Management Committee is not applicable to the Company for FY 2020-21. |
|Risk Management ||Mr. Ashwin Devineni Chairman ||However as per the amended Listing Regulations it is applicable to the Company for FY 2021-22. The Risk Management Committee of the Board of Directors was constituted by the Board at its meeting held on June 17 2021 in conformity with the requirements of Regulation 21 of the Listing Regulations with its role as stipulated in the Act and the Listing Regulations. |
|Committee ||Mr. GRK Prasad Member || |
| ||Mrs. B. Shanti Sree Member || |
A detailed note on the Board and its Committees is provided in thereport on Corporate Governance Report.
Particulars of Employees
The names and other particulars in accordance with the provisions ofSection 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are enclosed as Annexure - 8 tothis Report.
Names of the top ten employees in terms of remuneration drawn and thename of every employee employed throughout the financial year and in receipt ofremuneration of 1.02 cores or more or employed for part of the year and in receipt of 8.50lakhs or more per month under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are enclosed as Annexure - 9 to this Report.
Nava Bharat Ventures General Employees
The Board at its meeting held on August 8 2019 inter-alia approved theselective reduction of paid-up equity share capital of the Company by cancellation andextinguishment of the total shares held by NavaBharat Ventures Employee Welfare Trust(NBVEWT) through its Trustee- Barclays Wealth Trustees India Pvt. Ltd. along with theoutstanding loan owed by the Trust to the Company subject to the requisite sanctions fromshareholders and others. Further the Company accorded the approval of the members throughspecial resolution for the same vide postal ballot dated December 18 2019 andsubsequently the Honorable NCLT Hyderabad Bench on January 19 2021 allowed the Schemeof Reduction of Capital of the C mpany and passed the Order after giving an opportunity ofbeing heard on the Competent Authorities such as SEBI Regional Director (SER) and thescheme was taken on record and given effect by the Registrar of Companies HyderabadTelangana on February 12 2021.
Thereafter the Company filed successfully the required corporateaction forms with the
Depositories to extinguish / cancel the shares held by Nava BharatVentures Employee Welfare Trust through its Trustee - Barclays Wealth Trustees India Pvt.Ltd and completed the extinguishment / cancellation of the above said shares post whichthe shares held by NBVEWT were reduced to Zero.
Employees' Stock Option Scheme
There is no employees' stock option scheme being implemented bythe Company.
Directors' Responsibility Statement that: Directors confirm
(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
(b) they 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; sufficient
(c) they took proper and care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) they prepared the annual accounts on a going concern basis;
(e) they laid down internal financial controls to be followed by thecompany and that such internal financial controls were adequate and operating effectively;and
(f) they devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Statutory Auditors & Auditor's Report
M/s. Walker Chandiok & Co. LLP Chartered Accountants (FirmRegistration Number: 001076N / N500013) has been appointed as the statutory auditors ofthe Company for a period of 5 years i.e. till the conclusion of 50th AGM to be held inthe FY
2022-23 by the members of the Company at their meeting held on August9 2017. The Auditors' Report on the financial statements of the Company for thefinancial year ended March 31 2021 does not contain any reservation qualification oradverse remarks and their report together with notes to financial statements areself-explanatory and hence do not call for any further comments under Section 134 of theAct.
The Board appointed M/s. Narasimha Murthy & Co. Cost Accountantsas Cost Auditors for conducting the audit of cost records of the Company for
Sugar Industrial Alcohol Steel (Ferro Alloys) and Electricity for theFinancial Year 2020-21 on the recommendations of the Audit Committee. The same wasratified by the Members at the 48th AGM held on September 2 2020.
The Cost Audit reports for FY 2019-20 were filed Ministry of CorporateAffairs on December 8 2020.
Further the Board of Directors based on the recommendations of theAudit Committee appointed
M/s. Narasimha Murthy & Co. Cost Accountants as Cost Auditors forconducting the audit of cost records of the Company for Steel (Ferro Alloys) and
Electricity for the FY 2021-22 subject to ratification of members atthe ensuing AGM.
Internal Auditors for Costing Systems and Cost Accounting Records
M/s. Sagar & Associates Internal Auditors conducted an internalaudit of cost records for the Financial Year 2020-21.
The Board appointed M/s. Sagar & Associates as Internal Auditorsfor the conduct of the internal audit of cost records for the Financial Year 2021-22.
Maintenance of Cost Records
During the year under review Section 148(1) of the Act is applicableto your Company and accordingly such accounts and records are made and maintained by theCompany as specified.
During the year under review the Company has complied with theprovisions of Section 204 of the Act and Regulation 24A of the Listing Regulations. TheSecretarial Audit Report for the financial year ended March 31 2021 issued by Practicing
Company Secretary is enclosed as Annexure 10 to thisReport and does not contain any reservation qualification or adverse remarks.
Further the Board has appointed M/s. P.S. Rao & AssociatesPracticing Company Secretaries to conduct secretarial audit pursuant to therecommendations of the Audit Committee for the FY 2021-22.
The Secretarial Audit report of Nava Bharat Energy India Limited(NBEIL) a material subsidiary of the Company is also available on the Company'swebsite at https://www.nbventures.com/financials/.
Material Changes and Commitments
There have been no material changes and commitments in the businessoperations of the
Company from the financial year ended March 31 2021 to the date ofsigning of the Directors' Report.
Material Orders Passed by the Regulators
No significant and material orders were passed by the Regulators orcourts or tribunals impacting the going concern status and company's operations infuture except as stated otherwise.
All the properties of the Company including buildings plant andmachinery and stocks have been adequately insured.
Adequacy of Internal Financial Controls with Reference to the FinancialStatements with
The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. The Company maintains all its records in the SAPsystem and the workflow and approvals are routed through SAP.
The Internal Audit Department monitors and evaluates the efficacy andadequacy of the internal control system in the Company its compliance with operatingsystems accounting procedures and policies at all locations of the Company and itssubsidiaries. Based on the report of the internal audit function the Units undertakecorrective action in their respective areas and strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of the
The Board of Directors of the Company has adopted various policies likerelated party transactions policy whistle blower policy policy to determine materialsubsidiaries and such other procedures for ensuring orderly and efficient conduct of itsbusiness for safeguarding its assets prevention and detection of frauds and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial information.
Transfer of Amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 124(5) of the Act (section 205Aof the Companies Act 1956) an amount of 3297280/- relating to FY 2012-13 whichremained unclaimed for a period of 7 years was transferred by the Company in September2020 to the Investor Education and Protection Fund.
Transfer of Unclaimed Shares to Investor Education and Protection FundAuthority
All shares in respect of which dividend has not been paid or claimedfor seven consecutive years or more (relevant shares) up to and including the financialyear 2012-13 were transferred by the Company in the name of IEPF from time to time and thestatement containing such details as prescribed is placed on Company's website atwww.nbventures.com.
The Company established a vigil mechanism for directors and employeesto report genuine concerns pursuant to Section 177 of the Act. The vigil mechanismprovided for adequate safeguards against victimisation of employees who use such mechanismand for direct access to the chairperson of the Audit Committee in appropriate orexceptional cases. The policy lays down the mechanism for making enquiry intowhistleblower complaint received by the Company. Employees who may become aware of anyalleged wrongful conduct are encouraged to make a disclosure to the Audit Committee.
The details of such mechanism are communicated to all the directors andemployees and it was also disclosed on the website of the Company at https://www.nbventures.com/policies-code-of-conduct/.
Risk Management Policy
The Board formulated and implemented Risk Management Policy for theCompany which identifies various elements of risks which in its opinion may threaten theexistence of the Company and measures to contain and mitigate risks. The Company hasadequate internal control systems and procedures to combat the risk. The Risk Managementprocedures are reviewed by the Audit Committee and the Board on a periodical basis.
Dividend Distribution Policy
The Dividend Distribution policy as stipulated under Regulation 43A ofthe Listing Regulations is applicable to your Company for FY 2020-21 and is enclosed as Annexure-11 to the annual report and is also placed on the Company's website under theweb link: https://www.nbventures.com/policies-code-of-conduct/.
Industrial Safety and Environment
Utmost importance continues to be given to the safety of personnel andequipment in all the plants of the Company. The Company reviews thoroughly the varioussafety measures adopted and takes effective steps to avoid accidents. Safety drills arealso conducted at regular intervals to train the employees for taking timely andappropriate action in case of accidents.
Your Company received "The Corona Warrior" Internationalaward from the Viswa Guru World Records in recognition of the work that was done by theCompany during the Pandemic in FY 2020-21.
Green Initiative in Corporate Governance by Hon'ble Ministry ofCorporate Affairs
The Ministry of Corporate Affairs (MCA) has taken a green initiative inCorporate Governance by allowing paperless compliances by the
Companies and permitted the service of Annual Reports and documents tothe shareholders through electronic mode subject to certain conditions and the Companycontinues to send Annual Reports and other communications in electronic mode to themembers having email ids.
Industrial relations have been cordial during the year under review andyour Directors appreciate the sincere and efficient services rendered by the employees ofthe Company at all levels towards the successful working of the Company.
Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
Your Company has zero-tolerance towards sexual harassment at theworkplace and the details of sexual harassment complaints as per the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the Rules thereunder are as follows: No of Complaints Received : Nil
No of Complaints disposed off : NA During the year under review theCompany has complied with the provisions related to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Compliance with Secretarial Standards on Board and Annual GeneralMeetings
During the year under review the Company has complied with secretarialstandards issued by the Institute of Company Secretaries of India on Board Meetings andAnnual General Meetings.
Your Directors would like to express their grateful appreciation forthe assistance patronage and cooperation received from the Financial Institutions theCompany's Bankers Insurance Companies the Govt. of India Governments of variouscountries Govt. of Telangana Govt. of Andhra Pradesh and Govt. of Odisha the Stateutilities Shareholders and employees and other stakeholders during the year underreview.
| ||For and on behalf of the Board |
| ||P. Trivikrama Prasad |
| ||Managing Director |
| ||DIN : 00006887 |
| ||D. Ashok |
|Place : Hyderabad ||Chairman |
|Date : June 17 2021 ||DIN : 00006903 |