NxtDigital Management Discussions


Your Company has during the financial year 2022 -23 successfully concluded a demerger of its Digital Media & Communications business to Hinduja Global Solutions Limited, through a Scheme of Arrangement which received final approval of the Honble National

Company Law Tribunal on November 11, 2022. The Board of Directors of your Company have approved, subject to shareholders and regulatory approvals, the merger of Hinduja Leyland Finance Limited, a leading Non-Banking Financial Company into the Company. The Company is therefore in a stage of transition to enter into the business of financial services subject to all necessary approvals.

Future plans:

The Company at present has certain land assets in Bangalore. The Company is in negotiations with various parties for disposing the land. While the carrying cost of the land is approximately 12 Crores, the market value based on an independent valuation is approximately Rs 180 Crores.

The Board of Directors of the Company have approved, subject to shareholders and regulatory approvals, the merger of Hinduja Leyland Finance Limited, a leading Non Banking Financial Company into the Company. The Company is, therefore, in a stage of transition to enter into the business of financial services subject to all necessary approvals

The Company has made the necessary applications to the Regulatory authorities for approval of the merger.

PERFORMANCE REVIEW

Discussion on financial results:

The Company had during the year placed surplus cash balances with organizations as Inter Corporate

Deposits and has earned interest on the same. Apart from this, there was no other major source of income for the Company.

The summary of the financial results for the financial year 2022-23 are given below:

(Rs in Lakh)

For the Year

FY 2022-23 FY 2021-22
Total income 252.11 6930.25
Total expenses 224.71 2608.34
Earnings before tax from continuing operations 27.40 4321.91
Finance Costs - -
Depreciation and Amortization - -
Profit/(Loss) before tax from continuing operations 27.40 4321.91
Tax Expenses - -

(Rs in Lakh)

For the Year

FY 2022-23 FY 2021-22
Net Profit/(loss) after tax from continuing operations 27.40 4321.91
Net Profit/(loss) after tax from discontinuing operations - (13221.25)
Net Profit/(loss) for the year 27.40 (8899.24)

Balance Sheet Summary:

(Rs in Lakh)

Particulars

FY 2022-23 FY 2021-22

Liabilities

Equity & Reserves 6789.37 8109.69
Borrowings - -
Lease liabilities - -
Other liabilities 1265.57 148.15

Total

8054.94 8257.84

Assets

Property, plant & equipment - -
Inventories 1201.80 1201.80
Other long-term assets - -
Other assets 6853.14 7056.04

Total

8,054.94 8,257.84

Some key metrics:

Ratio Measure

FY 2022-23 FY 2021-22
(a) Current ratio 6.30 55.27
(b) Return on Equity ratio* 0.00 -0.64
(c) Trade payables turnover ratio 6.48 26.95
. (d) Net capital turnover ratio 0.00 0.86
(e) Net profit ratio 0.00% 0.62%
(f) Return on Capital employed 0.40% 0.53%

* includes amounts of discontinued operations

For details, please refer Note 28-‘Financial Ratios of the Audited Financial Statement for the financial year ended March 31, 2023.

COVID-19 Risk

With the impact of COVID 19 pandemic having significantly reduced in the last year, the Company has not had to face any adverse situation impacting either its business or the realizability of its assets or meeting of its obligations.

RISKS, CONCERN AND MITIGATION PLAN

As part of the assessment, the risk slate is periodically revisited through a top-down and bottom-up approach where select employees/risk owners identify key probable risks.

Based on feedback received, risk prioritization is done, key risks are shortlisted and assigned to the risk owners to help them define mitigation plans, along with key elements for monitoring, including relevant measures and milestones. The identified mitigation plans are monitored at periodic intervals to assess progress and measure if residual risks are within the organizations risk appetite.

The risk management policy of the Company lays down the risk strategy of the Company and helps in determining the risk factor, categorizing the various forms of risks affecting the Companys strategic and financial goals and modes to manage such risks.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY PLEASE TAKE FROM BOARD REPORT

The Company has laid down an adequate system of internal controls, policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, timely preparation of reliable financial disclosures and to ensure compliance with regulatory requirements. The internal financial controls are adequate and operating effectively. Effectiveness of internal financial controls ensured through management reviews, controlled self-assessment and independent testing by the internal audit team.

Your Company has complied with specific requirements as laid under Section 134(5)(e) of the Act, which calls for establishment and implementation of the Internal Financial Control framework that supports compliance with requirements of the Act in relation to the Directors Responsibility Statement.

The management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations and protection of resources and assets.

The Company has an Internal Audit function that identifies the critical audit areas with specific reference to operations, accounting, and finance.

The Internal Auditor reviews 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 Audit Committee. Based on the observations of the Internal Auditor, corrective actions are undertaken by the owners in their respective areas and thereby strengthening the internal controls.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Companys human resources system emphasises on the freedom to express views, competitive pay structure, performance-based reward system and growth opportunities and internal job opportunities, critical assignments within the organisation for career options for the employees. It has well-documented and disseminated employee friendly policies to enhance transparency, create a sense of teamwork and trust among employees and align employee interests with organisational strategic goals. The policy assists in a holistic workplace environment and play a key role in right talent on-boarding, talent retention and leadership development. The Company has developed well-designed and documented policies such as Whistleblower policy and Prevention of Sexual isHarassment policy in order to prevent discrimination and harassment and discourage any wrong practices. The Company ensures equal access to opportunities in the areas of recruitment, learning & development, career progression and advancement, regardless of gender, age, racial/ethnic background, religion or social status.

CAUTIONARY STATEMENT

Statements in this report describing the Companys objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations over which the Company does not have any direct control include among others, climatic conditions, economic conditions affecting demand-supply and price conditions in the domestic market in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.