To the Members
Your Directors have pleasure in presenting the Thirty-Sixth Annual Report of theCompany together with Audited Financial Statements for the financial year ended March312021.
|Particulars ||FY 2020-21 ||FY 2019-20 |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|Total income ||707.39 ||1008.45 ||969.63 ||1162.09 |
|Total expenses ||552.60 ||776.37 ||647.11 ||820.35 |
|Earnings before Interest Depreciation and taxes ||154.79 ||232.08 ||322.52 ||341.74 |
|Finance Costs ||127.95 ||142.65 ||115.49 ||119.79 |
|Depreciation and Amortization ||178.52 ||203.98 ||184.16 ||197.48 |
|Profit before exceptional items and tax from continuing operations ||(151.69) ||(114.55) ||22.85 ||24.46 |
|Exceptional items ||- ||- ||- ||- |
|Profit before tax from continuing operations ||(151.69) ||(114.55) ||22.85 ||24.46 |
|Tax ||(96.73) ||(98.19) ||(104.21) ||(85.21) |
|Profit after tax from continuing operations ||(54.96) ||(16.36) ||127.06 ||109.67 |
REVIEW OF FINANCIAL PERFORMANCE
on a consolidated basis the Company clocked a revenue of Rs.1008.45 crores for theyear ended march 31 2021. earnings before Interest Depreciation and taxes (EBIDTA) atRs.232.08 crores grew at 6.2% over the previous years EBIDTA of Rs.218.62 crores(excluding one time revenue of Rs.123.12 crores arising out of mark-to-market adjustmentsin the previous year). The increase in the subscriber base of the Company the shift inthe composition of revenues to higher yield revenues and rationalization of operatingcosts has led to the improved operating margins reflected in the growth in EBIDTA.
Your Directors are pleased to recommend for approval of the members a dividend of Rs.4per equity share (previous year Rs.5.00 per equity share) i.e. 40% of the face value ofRs.10/- each for the financial year ended march 312021. In terms of regulation 43a of theSecurities and exchange Board of India (Listing obligations and Disclosure requirements)regulations 2015 ("SEBI listing regulations") the Dividend Distribution Policyis uploaded on the Company's website at http://www.nxtdigital.co.in/investors/corporate-policies/
CHANGES IN CAPITAL STRUCTURE
During the year under review paid-up equity share capital of the Company has beenincreased from Rs.205555030/- divided into 20555503 equity shares of Rs.10/- each toRs.240511580/- divided into 24051158 equity shares of Rs.10/- each on issue andallotment of fully paid up 3495655 equity shares of Rs.10/- each aggregating toRs.34956550/- to the shareholders of IndusInd Media & Communications Limited onAugust 28 2020 pursuant to the Scheme of Arrangement under Section 230-232 and otherapplicable provisions of the Companies Act 2013 ("Act") approved by Hon'bleNational Company Law Tribunal vide its order dated August 21 2020. Except this there isno change in the capital structure of the Company.
RIGHTS ISSUE OF EQUITY SHARES
The Board of Directors at its meeting held on May 13 2021 approved the issue ofequity shares on rights basis to the existing shareholders of the Company at an offerprice of Rs. 300/- per share of face value of Rs. 10/- per share. Two (02) shares of facevalue of Rs. 10/- each will be offered for every five (05) shares held by them. At thesaid meeting the Board also constituted a Rights Issue Committee to handle the mattersconnected with the proposed Rights Issue.
Draft Letter of Offer (DLoF) as approved by the Rights Issue Committee at its meetingheld on July 30 2021 has been filed with the Securities Exchange Board of India (SEBI)and Stock Exchanges i.e. BSE Limited (BSE) and National Stock exchange of India Limited(NSE) on August 2 2021.
The Company has made the public announcement on august 4 2021 inviting public to givecomments on the DLoF.
NSE has accorded in principle approval for the Rights Issue vide letter No.NSE/LIST/27834 dated august 4 2021.
State of the Indian Economy
The financial year 2020-21 commenced with the announcement of a nationwide lockdown bythe Government of India to fight the spread of the CoVID 19 pandemic. What was expected tobe of a reasonably short to medium term disruption became a year long saga. the Countryhas seen waves of the pandemic in different pockets at different points in time during theyear with recovery still being uncertain. As per the Economic Survey 20-21 almost onefourth of the Country's economic activity was wiped out due to fall in domestic demand inwake of the strict nationwide lock downs to curb the spread of the pandemic.
While economic activity was slowly beginning to come back to the pre-pandemic levels inthe last quarter of the financial year and there were positive indicators with respect togrowth in the financial year 2021-22 the second wave of the pandemic which started aroundFebruary 2021 resulted in a brake being applied all over again. While the Country has goneon an overdrive on the vaccination program covering a large part of the population isstill some time away considering the supply side and demand side gaps for the vaccination.
In order to keep the economy primed and to provide relief to the multitudes that gotaffected the Government announced several relief packages from time to time. Thesepackages have played their role in minimizing the impact of the pandemic on the economyand the public. Much needs to be done still.
In all these uncertainties created by the pandemic the Finance Minister had theunenviable task of presenting the Union Budget amidst a slowing economy risingunemployment and inflation. Despite all these adverse circumstances and expecting that theeconomy will overcome all this the World Bank is bullish on the economy and has projecteda GDP growth rate of 7.5 to 12.5% for the Indian economy for FY 2021-22.
Nature of Business
The Company has repositioned itself as a Media & Entertainment Company providingvideo data and content services. The Company's convergent digital design experiencesinnovation platforms and reusable assets connect across a number of technologies todeliver tangible business value and experiences to the stakeholders. Your Company alsofocuses on sustainable business strategy managing social and environmental impacts whileensuring that corporate decisions lead to an equitable growth.
Media & Entertainment Industry (M&E)
State of play:
The Company is one of India's leading digital content distribution companies deliveringdigital content via cable as well as through satellite through its Headend In The Sky(HITS) platform through a vast network of Local Cable Operators. It is the only integrateddigital delivery Services Company providing digital distribution services through CableSatellite and Internet. It also provides Broadband Internet Services through itssubsidiary oNEoTT Intertainment Limited (ONE). Operating as it does in the Media &Entertainment sector an analysis of the state of play for the sector and the futureoutlook becomes pertinent.
The M&E sector has in line with the general economic trend had its share ofsignificant de-growth due to the pandemic. As per the recent report issued by Federationof Indian Chambers of Commerce and Industry (FICCI) on the sector the Indian M&Esector fell by 24% taking back revenues to 2017 levels.
Television the segment in which the Company's video business operates continues to bethe largest segment in the M&E sector. The Company's video business revenues aredriven mainly by subscription and less by advertising. As per the above report whileadvertising revenues fell by a significant 22% subscription revenues fell by only 7%.This augurs well for the Company and is also reflected in the operating numbers of theCompany for the year which have improved despite the havoc caused by the pandemic.
With respect to the broadband services provided by the Company through its subsidiaryONE with the increased demand for data requirement due to the work from home situationcreated by the pandemic the Country saw a significant increase in the number of broadbandusers. The Fixed broadband penetration in India is still below 8% of households whichpresents a significant opportunity for growth. As per the FICCI report mentioned above byDecember 2020 the broadband subscribers reached 747 million a growth of 13% over theprevious year and more than 40% from 2018. As per a report of the Telecom RegulatoryAuthority of India while the total internet subscriber base in India is 1168.66 millionthat of wired broadband (which services are provided by oNE) is only 20.08 million therebyhaving a significant scope for growth.
The outlook for both the video and broadband offerings though remains bullish as Indiastill remains a largely underpenetrated market for both video and data.
The potential for growth in digital business is significant and digital delivery isexpected to have a substantial market size by 2025. this gives immense opportunities tocompanies who are able to spot the areas of growth in this vast opportunity and exploitthe same in a manner which ensures both revenue and profit growth.
The Company pro-actively keeps looking at available opportunities to take advantage ofand draws up strategies to exploit such opportunities. In line with this the Company'skey focus would be to
set up a network of "Points of presence" across the country byinstalling cost effective efficient digital head ends;
increase focus on its "Infrastructure sharing" business model where ithas already signed up with multi system operators who like to ride on the Company'sdigital infrastructure;
providing new video products including hybrid ott models;
build upon the "Strategic Alliance Partner" model for acquiringbroadband customers leading to growth in subscriber base in a cost effective model;
leverage its content and teleshopping businesses and lastly have a focusedapproach to Enterprise clients.
All these steps being taken will ensure that the Company is able to identifyopportunities and exploit the same.
The Company discontinued the entire Treasury & Investments business segment byliquidating almost the whole of the Treasury assets and paying off the loans against theseassets during FY20.
The Company disposed of its entire balance holding in Hinduja Leyland Finance Limitedwhich was part of the "Discontinued Operations" and was held as "Assetsheld for sale". With this except for a small quantity of shares of IndusInd BankLimited the Company has disposed of all the assets which were part of the"Discontinued Operations"
IMPACT OF COVID-19
Since the Industry in which our Company is operating is Media & Entertainment andTelecom services the same was covered under the list of COVID-19 "EssentialServices" issued by the Ministry of Home Affairs Government of India and thereforeoperations of the Company were continued largely uninterrupted. No major impact wasobserved on the business of the Company.
There are no material changes or commitments affecting the financial position of theCompany between the end of the financial year and the date of the report.
DETAILS OF SUBSIDIARIES/JOINT VENTURES/ ASSOCIATE COMPANIES
The financial position of the Company's subsidiaries included in the consolidatedfinancial statement is provided in accordance with the provisions of Section 129 of theAct read with Rule 5 of the Companies (Accounts) Rules 2014 containing the salientfeatures of the financial statements of Company's subsidiaries in Form AOC - 1 in"Annexure A" to this report. The Company does not have any associate or jointventure company during the period under review. Pursuant to the provisions of Section 136of the Act the audited financial statements of the Company including consolidatedfinancial statements and separate audited financial statements of the subsidiaries areavailable on the website of the Company at http://www.nxtdigital.co.in/investors/annual-reports/
In terms of the provisions of Regulation 24 of SEBI Listing Regulations OneOTTIntertainment Limited is unlisted material subsidiary of the Company. The policy fordetermining material subsidiaries formulated by the Board of Directors is disclosed on theCompany's website and is accessible at the linkhttp://www.nxtdigital.co.in/investors/corporate- policies/
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors at its meeting held on August 12020 appointed Mr. VynsleyFernandes as Chief Executive Officer and Key Managerial Personnel pursuant to Section 203of the Companies Act 2013 ("Act").
Further the Board at its meeting held on September 4 2020:
1) Appointed Mr. Vynsley fernandes as Manager pursuant to Section 203 of the act.
2) appointed Mr. Amar Chintopanth who is Chief Financial Officer as Whole Time Director(DIN: 00048789) for a period of three (03) years with effect from September 04 2020 toSeptember 03 2023.
The members of the Company at the 35th annual General meeting ("35thAGM") held on September 30 2020:
a) Re-appointed Ms. Bhumika Batra (DIN:03502004) Independent Director for a secondterm of five years on the expiry of her term with effect from March 11 2020 to March 102025.
b) approved the appointment of Mr. amar Chintopanth as the Whole-Time Director of theCompany for a period of three (03) years with effect from September 04 2020 to September03 2023.
c) approved the appointment of Mr. Vynsley fernandes as the Manager of the Company fora period of Three years with effect from conclusion of 35th AGM i.e. September30 2020 to September 29 2023.
Mr. Ashok Mansukhani ceased to be Managing Director of the Company with effect fromSeptember 30 2020 on completion of his term of appointment.
Further the Board of Directors at their meeting held on february 26 2021 appointedMr. Vynsley fernandes (Din: 02987818) as Managing (additional) Director and ChiefExecutive officer of the Company for a period of three years with effect from February 262021 to february 25 2024 subject to the approval of Members. the Board recommends hisappointment as a Managing Director & Chief Executive Officer for consideration of theMembers of the Company at the 36th annual General Meeting ("36thAGM"). a brief profile of Mr. Vynsley Fernandes forms part of the Notice conveningthe 36th AGM.
Mr. Munesh Narinder Khanna (DIN: 00202521) has been appointed by the Board at itsmeeting held on May 13 2021 as an Independent (Additional) Director in terms of theprovisions of Section 161 of the Companies Act 2013 and he holds office up to the date of36th AGM of the Company. the Board recommends his appointment for a period of 5(five years) as an Independent Director for consideration by the Members of the Company atthe 36th AGM. A brief profile of Mr. Munesh Narinder Khanna forms part of theNotice convening the 36th AGM.
In accordance with the provisions of Section 152(6) of the Act and in terms of theArticles of Association of the Company Mr. Amar Chintopanth Wholetime Director (DIN:00048789) will retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for reappointment. The Board recommends his reappointment for theconsideration of the members of the Company at the 36th AGM. A brief profile ofMr. Amar Chintopanth forms part of the Notice convening the 36th AGM.
Mr. Hasmukh Shah (fCS-2029) ceased to be Company Secretary & Compliance Officerwith effect from January 18 2021 on completion of his tenure of employment. Mr. AshishPandey fCS- 6078) has been appointed as Compliance Officer of the Company with effect fromJanuary 18 2021 and Company Secretary & Key Managerial Personnel pursuant to Section203 of the Act with effect from January 28 2021.
As on the date of this report Mr. Vynsley fernandes Managing Director & ChiefExecutive Officer Mr. Amar Chintopanth Whole time Director & Chief Financial Officerand Mr. Ashish Pandey Company Secretary are the Key Managerial Personnel of the Companyin accordance with the provisions of Section 2(51) read with Section 203 of the Act.
DECLARATION BY INDEPENDENT DIRECTORS
During the year under review all Independent Directors have given declarations thatthey meet the criteria of independence as laid down under Section 149(6) of the Act andregulation 16(1)(b) of the SEBI Listing regulations. the Independent Directors have alsogiven declaration of compliance with rules 6(1) and 6(2) of the Companies (Appointment andQualification of Directors) Rules 2014 with respect to their name appearing in the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs.There has been no change in the circumstances affecting their status as IndependentDirectors during the year under review.
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
The Board members are regularly updated on business updates business models andcompetitive environment. the Board is also updated on organizational risks industryreview internal financial controls changes in corporate and allied laws taxation lawsand related matters through presentations and updates made by the respective functionalleaders. Your Company's Managing Director & Chief executive Officer makes apresentation to Board members every quarter sharing updates about the Company's businessstrategy operations and the key trends in the industry relevant for the Company. Theseupdates help the board members in keeping abreast of the key changes and their impact onthe Company.
In compliance with the requirements of Regulation 25(7) of the SEBI Listingregulations the Company has put in place a Familiarization Programme for the IndependentDirectors to familiarize them with the Company their roles rights responsibilities inthe Company nature of the industry in which the Company operates business model etc.
The details of the Familiarization Programme conducted are available on the website ofthe Company at http://www.nxtdigital.co.in/contents/static/uploads/inv/sebi-clause46/Independent Directors - Familarisation Program -2020-21.pdf.
CODE OF CONDUCT
The Board of Directors has laid down a Code of Conduct for all Board members andSenior Management Personnel of the Company. All the Directors and Senior managementPersonnel have affirmed compliance with the Code of Conduct as approved and adopted by theBoard of Directors and a declaration to this effect signed by the Managing Director &Chief Executive Officer has been annexed as "Annexure B" to this report asrequired under regulation 26(3) read with Schedule V(D) of the SEBI Listing regulations.The Code of Conduct of the Company is available on the website of the Company athttp://www.nxtdigital.co.in/investors/ code-of-conduct/.
BOARD MEETINGS HELD DURING THE YEAR
The Board met 11(eleven) times during the financial year ended march 31 2021. themeeting details and the particulars of attendance of the Directors at the said meetingsare provided in detail in the Corporate Governance report which forms a part of thisreport. the maximum interval between any two meetings did not exceed 120 days asprescribed in the act.
COMPOSITION OF THE AUDIT COMMITTEE
Details pertaining to composition of the audit Committee are included in the CorporateGovernance report which forms part of this report.
COMMITTEE MEETINGS HELD DURING THE YEAR
The details of the Committee meetings are furnished in the Corporate Governance reportwhich forms part of this report.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND DIRECTORS
During the year the evaluation of the annual performance of individual Directorsincluding the Chairman of the Company and Independent Directors Board and Committees ofthe Board was carried out under the provisions of the act relevant rules and theCorporate Governance requirements as prescribed under regulation 17(10) of SEBI listingregulations and with respect to SEBI Guidance Note on Board evaluation. for performanceevaluation of the Board it's Committees and individual Directors the Company had engagedthe services of a specialized agency to undertake the evaluation process. The manner inwhich the Board has carried out the evaluation in consultation with such a specializedagency has been explained in the Corporate Governance report which forms part of thisreport.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors and performance of the Board as a whole was evaluated. Further they alsoevaluated the performance of the Chairman of the Company.
The Board also assessed the fulfillment of the independence criteria as specified inSEBI Listing regulations by the Independent Directors of the Company and theirindependence from the management.
DIRECTOR'S RESPONSIBILITY STATEMENT
Your Directors to the best of the knowledge and belief and according to theinformation explanations and representations obtained by them and after due inquirymake the following statements in terms of Sections 134(3)(c) and 134(5) of the Act that:
a. in the preparation of the annual accounts for the year ended March 312021 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent to give a true and fairview of the state of affairs of the Company as of March 31 2021 and of the profit/lossof the Company for the year ended on that date;
c. the Directors have taken proper and enough 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. the Directors have prepared the annual accounts on a going concern basis;
e. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
REMUNERATION POLICY FOR DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES ANDCRETERIA FOR APPOINTMENT OF DIRECTORS
For the purpose of selection of any Director the Nomination and Remuneration Committeeidentifies persons of integrity who possess relevant expertise experience and leadershipqualities required for the position. The Committee also ensures that the incumbentfulfills such criteria with regard to qualifications positive attributes independenceage and other criteria as laid down under the Act SEBI Listing Regulations or otherapplicable laws. The Board had on the recommendation of the Nomination and remunerationCommittee framed a Policy on remuneration of Directors Key Managerial Personnel and otheremployees.
The remuneration Policy has been disclosed in the Corporate Governance report whichforms part of this report.
The policy is available on the Company's website athttp://nxtdigital.co.in/contents/static/uploads/inv/ corporate policies/NXT RemunerationPolicy.pdf.
CORPORATE GOVERNANCE REPORT
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India ("SEBI").
During the year under review your Company has complied with the Corporate Governancerequirements under SEBI Listing Regulations. A detailed report on Corporate Governance asrequired under Regulation 34 read with Schedule V of the SEBI Listing Regulations isannexed as "Annexure C" to this report.
A certificate from the Secretarial Auditor of the Company certifying that the Companyhas complied with the conditions of Corporate Governance as required under Schedule V(E)of the SEBI Listing Regulations is annexed as "Annexure D" to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as prescribed under Part B of Schedule Vread with Regulation 34(3) of the SEBI Listing Regulations is annexed as "AnnexureE" to this Report.
BUSINESS RESPONSIBILITY REPORT:
The Business Responsibility Report (BRR) of the Company for the year ended March 312021 as prescribed under Regulation 34 of the SEBI Listing Regulations forms part of theAnnual Report. BRR report is attached marked as "Annexure F" to this report.
Your Company has not accepted any deposits from the public within the meaning ofChapter V of the Act and rules framed there under.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company believes that internal control is a prerequisite of governance and thataction emanating out of agreed business plans should be exercised within a framework ofchecks and balances. The Company has a well-established internal control framework whichis designed to continuously assess the adequacy effectiveness and efficiency of financialand operational controls. The management is committed to ensuring an effective internalcontrol environment commensurate with the size and complexity of the business whichprovides an assurance on compliance with internal policies applicable laws regulationsand protection of resources and assets.
Your Company has in place adequate internal financial controls which is commensuratewith the size scale and complexity of its operations. These have been designed toprovide reasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable statutes safeguarding assets fromunauthorized use executing transactions with proper authorization and ensuringcompliance of corporate policies. The Company has a well-defined delegation of power withauthority limits for approving revenue as well as expenditure. The Company uses EnterpriseResource Planning (ERP) system to record data for accounting and management informationpurposes and connects to different locations for efficient exchange of information. entityLevel Control framework document has been documented.
The Company has an Internal Audit function that identifies the critical audit areaswith specific reference to operations accounting and finance. the Internal auditorreviews the adequacy of the internal controls and risks in such audit areas every quarter.the audit is based on the Internal audit Plan which is reviewed and approved by the auditCommittee. Based on the observations of the Internal auditor corrective actions areundertaken by the process owners in their respective areas and thereby strengthening theinternal control.
The Internal Control System of your Company is tested on a yearly basis by aspecialized external audit firm. In addition to such periodic audits the Company also hasin place a well-implemented risk management policy.
Your Company has complied with specific requirements as laid under Section 134(5)(e) ofthe act which calls for establishment and implementation of the Internal FinancialControl framework that supports compliance with requirements of the act in relation to theDirector's responsibility Statement.
The audit Committee based on its evaluation has concluded that as on March 31 2021your Company's internal financial controls were adequate and operating effectively.
Pursuant to the Companies (Management and administration) amendment Rules 2020 aCompany is not required to attach the Extract of the annual Return with the Directors'Report in Form No. MGT-9 in case the web link of such annual Return has been disclosed inthe Board's Report in accordance with Section 92(3) of the act.
a copy of the annual Return is placed on the website of your Company athttp://www.nxtdigital.co.in/ investors/annual-general-meeting/.
LOANS GUARANTEES AND INVESTMENTS
Particulars of loans given investments made guarantees given and securities providedare given in Note nos. 4 6 12 and 45 of the Notes forming part of Financial Statements.
RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under Section 2(76) ofthe Act and Regulation 23 of the SEBI Listing Regulations during the financial year endedMarch 31 2021 were in the ordinary course of business and at an arm's length pricingbasis and do not attract the provisions of Section 188 of the Act hence no particularsin Form AOC-2 have been furnished. there were no transactions with related parties in thefinancial year which were in conflict with the interest of the Company and requiringcompliance of the provisions of Regulation 23 of the SEBI Listing Regulations.
Suitable disclosure as required by the Indian accounting Standards (Ind aS 24) has beenmade in the note no. 36 forming part of the Financial Statements. the Company hasformulated a policy on materiality of Related Party transactions and dealing with RelatedParty transactions which has been uploaded on the Company's website which can be accessedat following link; http://nxtdigital. co.in/contents/static/uploads/inv/corporatepolicies/ Revised RPt policy.pdf
At the 35th AGM of the Company held on September 30 2020 M/s. Haribhakti& Co. LLP Chartered Accountants (Firm Registration No. 103523W/ W100048) wereappointed as Statutory Auditors of your Company for a term of five years from theconclusion of 35th AGM till the conclusion of 40th AGM.
The Company has received a confirmation from M/s. Haribhakti & Co. LLP CharteredAccountants (Firm Registration No. 103523W/W100048) that they are not disqualified to actas the Statutory Auditors and are eligible to hold the office as Auditors of the Company.
The Auditor's Report on the Standalone and Consolidated Financial Statements of theCompany for the year ended March 31 2021 has been issued with an unmodified opinion bythe Statutory Auditors.
The Board had appointed Ms. Rupal Jhaveri a Company Secretary in Whole-time Practice(CP: 4225) to undertake Secretarial Audit for the financial year 2020-21 pursuant to theprovisions of Section 204 of the Act and Companies (Appointment and Remuneration ofManagerial Personnel) Rules
2014. The Secretarial Audit Report in the Form No. MR-3 for the year ended March312021 is annexed as "Annexure G" to this report.
The Secretarial audit report for the year under review does not contain anyqualification reservation or adverse remark.
During the year under review in accordance with Section 148 of the act and rulesframed there under the Board of Directors on the recommendation of the audit Committeehad appointed M/s. ABK & associates Cost accountants (firm registration No. 000036)as Cost auditors of the Company for the financial year 2020-21 to audit the cost accountsfor the financial year ended March 312021.
The Board of Directors on the recommendation of the audit Committee had appointed M/s.ABK & associates Cost accountants (firm registration No. 000036) as Cost auditorsof the Company for the financial year 2021-22 to audit the accounts relating to Dark OpticFiber Leasing for the financial year ended march 31 2022. necessary resolution forratification of remuneration of the Cost Auditor for the financial year 2021-22 will beplaced before the Members for ratification/approval at the 36th AGM. the Costaudit report for the year ended march 31 2021 does not contain any qualificationreservation and adverse remark.
NO REPORTING OF FRAUDS BY AUDITORS:
During the year under review neither the Statutory auditors nor the Secretarialauditors has reported to the audit committee under section 143 (12) of the act anyinstances of fraud committed against the Company by its officers or employees the detailsof which would need to be mentioned in the Board's report.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has been supporting "Sustainable rural Development Project" aProject of rural Development and rural Education Programme in Jawhar Taluka PalgharDistrict Maharashtra through Hinduja Foundation. For the financial year 2019-20 yourCompany had spent Rs.116.39 lakh which amounts to 2% of the average net profits of theCompany in the three preceding financial years of 2019-20. The CSR Committee at itsmeeting held on January 18 2021 arrived at a conclusion that considering average lossfor the preceding three years for the financial year 2020-2021 there would not be anystatutory obligation to provide the funds for CSR activities. The Board at its meetingheld on January 28 2021 reviewed and confirmed the same.
The annual report on CSR activities containing details of expenditure incurred by theCompany and brief details on the CSR activities are provided in "Annexure - H"to this Report.
The program in Jawhar taluka of Maharashtra has since 2015 focused on improving thelives of the citizens of its most remote hamlets. Through interventions in water healtheducation and livelihoods many lives in the region have been positively impacted. The mostheartening result has been a drop in the rates of distress migration- the figure hasdropped from 90% to 35% proving that the livelihood programs in agriculture andentrepreneurship have been successful. Through floriculture alone families here areearning up to Rs 42.000 per year. As opposed to a single crop a year farmers now produce2-3 crops. Women and children are also seeing the benefits of this program. 63% of thewomen here are now engaged in land based income generation activities and their savingstoo have risen thanks to guidance from SelfHelp Groups. Through Road to School over 4000students across 14 schools in Jawhar have been reached their foundational literacy andnumeracy levels both now being higher than the Maharashtra rural average.
WHISTLE BLOWER / VIGIL MECHANISM
To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behavior in all its operations the Company has adopted a policy onWhistle Blower / Vigil Mechanism and the same is uploaded on the website of the Companyat the web link: http://www. nxtdigital.co.in/investors/corporate-policies/
The mechanism enables the Directors and employees to report their genuine concernsabout unethical behavior actual or suspected fraud or violation of the Company's code ofconduct and assures to provide adequate safeguards against victimization of the concernedDirector or employee. The employees and other stakeholders have direct access to theChairperson of the audit Committee for lodging concerns if any for review.
Your Company affirms that no Director or employee has been denied access to theChairperson of the audit Committee and that no complaints were received during the yearunder review.
The Board of Directors has constituted a Risk Management Committee which is entrustedwith the responsibility of overseeing various strategic operational and financial risksthat the organisation faces along with the adequacy of mitigation plans to address suchrisks. The Corporate Governance Report which forms part of this report contains thedetails of Risk Management Committee of the Company.
The risk management policy of the Company lays down the risk strategy of the Companyand helps in determining the risk factor categorizing the various forms of risksaffecting the Company's strategic and financial goals and modes to manage such risks.
The risk identification and remedial steps if any to mitigate risks are periodicallyreviewed by the Company. In addition to reviewing the remedial steps the Company alsoassesses whether identified risks still exist or whether the Company is exposed to newrisks.
The Audit Committee and Board are updated on how each of the identified risks ismonitored during the reporting period to ensure that there is no adverse impact on theCompany.
Further details on risk management are provided in the management Discussion andanalysis Section which form part of this report.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards (SS) issued by theInstitute of Company Secretaries of India and that such systems are adequate and operatingeffectively. The Company has complied with SS-1 and SS-2.
The Company's financial discipline and prudence is reflected in the credit ratingsascribed by rating agencies. the details of credit ratings are disclosed in the CorporateGovernance report which forms part of this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMENATWORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
Your Company strongly believes in providing a safe and harassment free workplace foreach and every individual working for the Company through various interventions andpractices. It is the continuous endeavour of the management of the Company to create andprovide an environment to all its employees that is free from discrimination andharassment including sexual harassment.
The Company has adopted a policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and redressal) act 2013 and the rules made thereunder. the Company has submitted the annual returns to the local authorities as requiredunder the above-mentioned act.
During the financial year ended March 31 2021 NIL complaint pertaining to sexualharassment was received by the Company. Your Company has complied with provisions relatingto the constitution of Internal Complaints Committee under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and redressal) act 2013.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the applicable provisions of the act read with the IEPF authority(accounting audit transfer and refund) rules 2016 ("the IEPF rules") allunpaid or unclaimed dividends are required to be transferred by the Company to theInvestor Education & Protection fund ("IEPF') established by the Government ofIndia after the completion of seven years.
Further according to the rules the shares on which dividend has not been paid orclaimed by the shareholders for seven consecutive years or more shall also be transferredto the Demat account of the IEPF authority. During the year the Company has transferredthe unclaimed and unpaid dividends of Rs.266780/- (rupees Two Lakhs Sixty Six thousandSeven Hundred and Eighty Only).
Further 773 equity shares on which dividends were unclaimed for seven consecutiveyears were transferred as per the requirements of the IEPF rules. the details are providedin the Corporate Governance report of this annual report under heading Unpaid/UnclaimedDividend and are also available on our Company's website at the web linkhttp://www.nxtdigital.co.in/investors/unclaimed- dividend/
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of Conservation of Energy research and Development and technologyabsorption pursuant to Section 134(3)(m) of the act during the year under review and thedetails of Foreign Exchange Earnings and Outgo are as under:
Conservation of Energy:
The Company is not an energy-intensive unit; hence an alternate source of energy maynot be feasible. However regular efforts are made to conserve energy. the Companyevaluates the possibilities and various alternatives to reduce energy consumption.Further the use of low energy consuming LED lightings is being encouraged.
However due to nationwide lockdown in the country due to COVID-19 pandemic theCompany had encouraged its employees to work from home thereby use of energy was low.
The Company is not engaged in manufacturing activities; therefore disclosures ontechnology absorption and conservation of energy etc. are not applicable.
Foreign Exchange Earnings and Outgo:
During the year under review the summary of foreign exchange earnings and outgo arementioned below:
|Foreign Exchange ||Earning ||Outgo |
|FY 2019-20 ||NIL ||48.70 |
|FY 2020-21 ||NIL ||239.16 |
EMPLOYEES PARTICULARS AND RELATED DISCLOSURES
Your Company's skilled talented and multicultural workforce is pivotal to all theinitiatives that drive us to realize our future plans. We have more than 1000 employeesspread across the Country in various sales offices regional offices and Corporate office.Human Resource agenda encourages high performance culture with focus on employee healthsafety & welfare employee engagement development & productivity. Your Director'swould like to take this opportunity to express their appreciation for the passiondedication and commitment of the employees of the Company and look forward to theircontinued contribution.
Disclosures pertaining to the remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as "Annexure I" to this Report.
Statement containing particulars of top 10 employees and the employees drawingremuneration in excess of limits prescribed under Section 197 (12) of the Act read withRule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in the "Annexure - J" forming part of this report.
COMMUNICATION AND PUBLIC RELATIONS
Your Company has continuously endeavored to increase awareness among its stakeholdersand in the market place about the Company's strategy new developments and financialperformance as per rules laid down by the regulatory authorities like SEBI etc.
1) No significant or material orders except stated above were passed by any Regulatoror Court or Tribunal which can have an impact on the going concern status and theCompany's operations in the future.
2) There are no material changes and commitments that have occurred between the end ofthe financial year of the Company and the date of this report which affects the financialposition of the Company.
3) The Managing Director of the Company does not receive any remuneration or commissionfrom any of its subsidiaries.
4) No application has been made under the Insolvency and Bankruptcy Code; hence therequirement to disclose the details of application made or any proceeding pending underthe Insolvency and Bankruptcy Code 2016 (31 of 2016) during the financial year along withtheir status as at the end of the financial year is not applicable.
5) The requirement to disclose the details of difference between amount of thevaluation done at the time of onetime settlement and the valuation done while taking loanfrom the Bank or financial Institutions along with the reasons thereof is not applicable.
AWARDS AND RECOGNITION
Your Company continued its quest for excellence in its chosen area of business toemerge as a true national brand. Awards / recognitions received by the Company during theyear 2020-21 includes Mr. Vynsley Fernandes Managing Director & CEO won CEO ofthe year' award by World Leadership Congress.
Your Directors place on record their appreciation for the contributions made byemployees towards the success of your Company more particularly ensuring business as usualin spite of COVID-19 impact. Your Directors gratefully acknowledge the co-operation andsupport received from the shareholders customers vendors bankers regulatory andGovernment Authorities in India.
|For and on behalf of the Board of Directors |
|Ashok P. Hinduja Chairman |
|Place: Mumbai |
|Date: August 13 2021 |