Xchanging Solutions Ltd
Directors Reports
Dear Shareholders,
The Board of Directors ("Board") is pleased to present the
Twenty Second Annual Report and the Audited Financial Statements of the Xchanging
Solutions Limited ("the Company") for the financial year ended March 31, 2023.
A. FINANCIAL RESULTS
The highlights of standalone and consolidated financial results of the
Company for the financial year ended March 31, 2023 and March 31, 2022 are as under:
PARTICULARS |
STANDALONE |
CONSOLIDATED |
|
For the Financial year ended March 31,
2023 |
For the Financial year ended March 31,
2022 |
For the Financial year ended March 31,
2023 |
For the Financial year ended March 31,
2022 |
Total Income |
4,750 |
5,218 |
18,512 |
18,284 |
Total Expenditure |
2,871 |
2,937 |
12,552 |
12,197 |
Profit before Finance Costs, |
1,949 |
2,386 |
6,031 |
6,194 |
Depreciation and Tax |
|
|
|
|
Depreciation & Amortization |
60 |
89 |
61 |
91 |
Finance Costs |
10 |
16 |
10 |
16 |
Profit / (Loss) before Tax |
1,879 |
2,281 |
5,960 |
6,087 |
Income Tax |
410 |
62 |
1,470 |
830 |
(including deferred tax) |
|
|
|
|
Net Profit / (Loss) after Tax |
1,469 |
2,219 |
4,490 |
5,257 |
Other Comprehensive |
-20 |
-20 |
1,787 |
519 |
Income/(Expenditure) |
|
|
|
|
Total Comprehensive |
1,449 |
2,199 |
6,277 |
5,776 |
Income/(Expenditure) |
|
|
|
|
Earnings / (Loss) per share |
1.32 |
1.99 |
4.03 |
4.72 |
B. REVIEW OF OPERATIONS
During the financial year ended March 31, 2023, the consolidated income
of the Company was Rs 18, 512 Lakhs as against Rs 18,284 Lakhs during the previous year
ended March 31, 2022. At a standalone level, the total income of the Company for the
financial year ended March 31, 2023 amounted to Rs 4,750 Lakhs compared to Rs 5,218 Lakhs
during the previous year ended March 31, 2022.
C. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the financial year ended
March 31, 2023 as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligation and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is presented
in a separate section and forms an integral part of this Report.
D. DIVIDEND
The Board does not recommend a dividend for FY 2022-23. Refer the
Company's policy on Dividend Distribution available on the website of the Company at
https://dxc.com/in/en/ about-us/xchanging-solutions-limited-investor-relations
E. TRANSFER TO RESERVES
During the financial year under review, the Company has not transferred
any amount to the General Reserve.
F. SUBSIDIARIES AND ASSOCIATES
Your Company has 2 (two) direct subsidiaries and 1 (one) step down
subsidiary as on March 31, 2023. There are no associates or joint venture companies within
the meaning of Section 2(6) of the Companies Act, 2013 ("the Act"). There has
been no material change in the nature of the business of the subsidiaries.
Liquidation status of Subsidiary Companies
Nexplicit Infotech India Private Limited, a subsidiary (Wholly owned
subsidiary of Xchanging Solutions (USA) Inc.) is under liquidation.
Except as mentioned above, during the financial year ended March 31,
2023 under review, there have been no material changes in the business of the
subsidiaries. In terms of Section 129(3) of the Act, the Company has prepared a statement
containing the salient features of the Financial Statement of subsidiaries in the
prescribed Form AOC-1 which is attached to the Financial Statements of the Company.
The Financial Statements of Subsidiary Companies are being uploaded on
website of the Company https://www.dxc.com/
in/en/about-us/xchanging-solutions-limited-investor-relations for inspection by the
shareholders. Any member desirous of obtaining a copy of the said financial statements may
write to the Company. The financial statements including the consolidated financial
statements and all other documents required to be attached with this report have been
uploaded on to the website of your Company viz. https://dxc.com/in/
en/about-us/xchanging-solutions-limited-investor-relations In terms of the Company's
Policy on determining "material subsidiary", during the financial year ended
March 31, 2023, Xchanging Solutions (USA) Inc and Xchanging Solutions Singapore Pte.
Limited were determined as a material subsidiary(ies) whose income exceeds 10% of the
consolidated income of the Company in the immediately preceding financial year.
G. RELATED PARTY TRANSACTIONS
All Related Party Transactions are placed before the Audit Committee
for approval as per the Related Party Transactions Policy of the Company and approved by
the Board. The policy is also uploaded on the website of the Company and can be accessed
through the link https://
dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations. All related party
transactions that were entered into during the financial year were on an arm's length
basis and were in the ordinary course of business. The disclosure of transactions with the
related parties are provided in the notes to the Standalone Financial Statements, forming
part of the Annual Report.
As required under the Act, particulars of contracts or arrangements
with related parties in the prescribed Form AOC-2, is provided as Annexure - I to this
Boards' Report.
H. AUDITORS
(i) Statutory Auditors and Auditors' Report
The Shareholders of the Company in the 20th Annual General Meeting
("AGM") of the Company had reappointed M/s. Deloitte Haskins & Sells LLP,
Chartered Accountants, (Firm Registration No. 117366W/W-100018), ("Deloitte") as
the Statutory Auditors of the Company to hold office from the conclusion of the 20th AGM
till the conclusion of the 25th AGM of the Company. The Statutory Auditors had carried out
audit of financial statements of the Company for the financial year ended March 31, 2023
pursuant to the provisions of the Act. The reports of Statutory Auditors forms part of the
Annual Report. The reports are self-explanatory and does not contain any qualifications,
reservations or adverse remarks.
(ii) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed Mr. Ankush Agarwal, Partner, MAKS & Co., Company Secretaries [FRN
P2018UP067700], to undertake the Secretarial Audit of the Company. Accordingly, in terms
of provisions of Section 204(1) of the Act, a Secretarial Audit Report for the financial
year ended March 31, 2023 given by the Secretarial Auditor of the Company in prescribed
Form MR-3 is provided as Annexure -II.
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
(iii) Reporting of Frauds by Auditors
During the year under review, the Statutory Auditors and the
Secretarial Auditor have not reported any instances of frauds committed in the Company by
its Officers or Employees, to the Audit Committee under Section 143(12) of the Act,
therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
I. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES
Details of loans, Guarantees and Investments covered under Section 186
of the Act and Schedule V of the Listing Regulations are provided in the notes to
financial statements.
J. PUBLIC DEPOSITS
Your Company has neither invited nor accepted any deposits from public
within the meaning of Section 73 of the Act read with Companies (Acceptance of Deposits)
Rules 2014 during the period under review.
K. EMPLOYEES
(i) Key Managerial Personnel (KMP)
The following have been designated as the Key Managerial Personnel of
the Company pursuant to Sections 2(51) and 203 of the Act read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014: a) Mr. Nachiket
Vibhakar Sukhtankar, Managing Director and Chief Executive Officer b) Mr. Shrenik Kumar
Champalal, Whole Time Director and Chief Financial Officer c) Mr. Mayank Jain, Company
Secretary cum Compliance Officer
(ii) Employees' Stock Option Scheme
During the period under review, no Employees' Stock Option scheme
exists in the Company.
(iii) Particulars of Employees and Related Disclosures
In accordance with the provisions of Section 197(12) of the Act read
with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, a statement containing the disclosures pertaining to remuneration and other
details as required under the Act and the above Rules, are appended to this Report as
Annexure III.
None of the directors except Mr. Henry D'Souza, received any
remuneration or commission from Subsidiary Companies of your Company.
The details of remuneration paid to the Directors including the
Managing Director & Chief Executive Officer of the Company are given in Corporate
Governance Report.
The information required under Section 197(12) of the Companies Act,
2013 ("the Act") read with Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However,
pursuant to first proviso to Section 136(1) of the Act, this Report is being sent to the
Shareholders excluding the aforesaid information. Any shareholder interested in obtaining
said information, may write to the Company Secretary at the Registered Office of the
Company and the said information is open for inspection at the Registered Office of the
Company The Board of Directors affirm that the remuneration paid to key managerial
personnel of the Company is as per the Nomination & Remuneration Policy of the
Company.
L. BOARD AND COMMITTEES
(i) Directors
As on March 31, 2023, the Board of Directors comprises of six directors
out of which 2 are Executive Directors, 3 are Independent Directors and 1 is Non-Executive
- Non-Independent Director.
Based on the recommendation of the Nomination and Remuneration
Committee and approved by the Shareholders on the Annual General Meeting held on August 3,
2022, Mr. Pankaj Vaish was appointed as the Non-Executive Independent Director Further,
based on the recommendation of the Nomination and Remuneration Committee, Mrs. Rama NS was
proposed to be re-appointed as Non-Executive Independent Director subject to the approval
of the Shareholders. The Board of Directors recommend the re-appointment of Mrs. Rama NS
as the Non-Executive Independent Director for a period of five years w.e.f. April 1, 2024
to March 31, 2029, to the shareholders for their approval in the ensuing Annual General
Meeting. Further, based on the recommendation of the Nomination and Remuneration
Committee, Mr. Shrenik Kumar Champalal was proposed to be re-appointed as Whole Time
Director subject to the approval of the Shareholders. The Board of Directors recommend the
re-appointment of Mr. Shrenik Kumar Champalal as the Whole Time Director for a period of
three years w.e.f. March 31, 2024 to March 30, 2027, to the shareholders for their
approval in the ensuing Annual General Meeting. The Company has received requisite notice
in writing from member of the Company proposing their candidature as Directors of the
Company.
Pursuant to the provision of Section 152(6) of the Act and the Articles
of Association of the Company, Mr. Nachiket Vibhakar Sukhtankar, Managing Director, being
longest in the office, retire by rotation at the ensuing Annual General Meeting and being
eligible offer himself for the re-appointment. The Board of Directors recommend his re
-appointment.
Mr. Venkatesh Shastry, Independent Director, has resigned from post of
directorship w.e.f. May 5, 2022 due to his personal reasons and other professional
commitment. He also confirmed that there is no material reason of his resignation other
than stated above. Brief resume and other details relating to the directors, who are to be
appointed/ re-appointed as stipulated under Regulation 36(3) of the Listing Regulations
and Secretarial Standards issued by ICSI, are furnished in the Notice of Annual General
Meeting forming part of the Annual Report.
Further, pursuant to the provisions of Section 149 of the Act, the
Independent Directors have submitted declarations that each of them meet the criteria of
independence as provided in Section 149(6) of the Act along with Rules framed thereunder
and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also
confirmed that they have complied with Schedule IV of the Act and Company's Code of
Conduct.
Further, in terms of Regulations 25(8) of the Listing Regulations, the
Independent Directors have confirmed that they are not aware of any circumstance or
situation, which exist or may be reasonably anticipated, that could impair or impact their
ability to discharge their duties with an objective independent judgment and without any
external influence.
All Directors have affirmed that they are not debarred from holding the
office of a Director by virtue of any SEBI order or any other such Authority and are not
disqualified u/s 164(2) of the Companies Act, 2013. Further, Independent Directors have
successfully registered themselves in the Independent Director's data bank maintained
by Indian Institute of Corporate Affairs.
The Company has taken the certificate from Mr. Ankush Agarwal, Partner,
MAKS & Co., Company Secretaries [FRN P2018UP067700], that none of the directors on the
Board of the Company have been debarred or disqualified from being appointed or continuing
as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory
authority. The Certificate is annexed to this Report as Annexure - IV. Further, in the
opinion of the Board, the Independent Directors fulfill the conditions specified in
Listing Regulations and they are independent of the management.
(ii) Board Evaluation
Pursuant to the provisions of Section 134(3)(p) of the Act and
Regulation 4 of Listing Regulations, the Board has carried out an annual performance
evaluation of its own performance, and the evaluation of the working of its Committees and
directors. The manner in which the evaluation has been carried out has been explained in
the Corporate Governance Report.
(iii) Remuneration Policy
The remuneration paid to the Directors is in line with the Nomination
and Remuneration Policy formulated in accordance with Section 178 of the Act and
Regulation 19 of the Listing Regulations (including any statutory modification(s) or
re-enactment(s) thereof for the time being in force).
The relevant Policy(ies) have been uploaded on the website of the
Company and can be accessed through the link
https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.
(iv) Board/Committee Composition and Meetings
A calendar of meetings is prepared and circulated in advance to the
Directors. The details of composition of Board and Committee and their meetings held
during the year are given in the Corporate Governance Report. The intervening gap between
the meetings was within the period prescribed under the Act and the Listing Regulations.
(v) Familiarization Programme and Separate Meeting of Independent
Directors
During the financial year ended March 31, 2023, a separate meeting of
the Independent Directors of the Company was held on May 23, 2022 without the attendance
of Non-Independent Directors and the Management team.
During their meeting held on May 23, 2022, the Independent Directors
discussed the matters specified in Schedule IV of the Act and Regulation 25 of the Listing
Regulations.
The Nomination and Remuneration Committee of the Company at its meeting
held on February 27, 2015 had approved a familiarization programme for Independent
Directors of the Company. The Familiarization programme for Independent Directors is
available at
https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.
(vi) Audit Committee
This Committee comprises the following Directors viz. Mrs. Rama NS
(Chairperson of the Committee), Mr. Henry D'Souza, Mr. Pankaj Vaish, and Mr. Shrenik Kumar
Champalal. The Company Secretary acts as the Secretary to the Committee. Details of the
Audit Committee have been provided in Corporate Governance Report.
All the recommendations of the Audit Committee were accepted by the
Board.
(vii)Directors' Responsibility Statement
In terms of Section 134(5) of the Act, the Directors would like to
state and confirm: (a) That in preparation of the annual financial statements for the year
ended March 31, 2023, applicable accounting standards had been followed along with proper
explanation relating to material departures if any; (b) That such accounting policies have
been selected and applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company as of March 31, 2023, and of the profit of the Company for the year ended on that
date; (c) That proper and sufficient care has been taken in the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities; (d)
That the annual accounts have been prepared on a going concern basis; (e) Based on the
framework of internal financial controls and compliance systems established and maintained
by the Company, work performed by Group Management Team including audit of internal
financial control over financial reporting, the Board is of the opinion that proper
internal financial controls are in place and such internal financial controls are adequate
and are operating effectively; and (f) That proper systems have been devised to ensure
compliance with the provisions of all applicable laws and such systems are adequate and
are operating effectively
M. GOVERNANCE
(i) Corporate Governance
The Company is committed to uphold the highest standards of Corporate
Governance and to adhere to the requirements set out by the Securities and Exchange Board
of India. A detailed report on Corporate
Governance along with the Certificate of Mr. Ankush Agarwal, Partner,
MAKS & Co., Company Secretaries [FRN P2018UP067700], confirming compliance with
conditions of Corporate Governance as stipulated under Schedule V of the Listing
Regulations forms an integral part of this Report.
(ii) Vigil Mechanism / Whistle Blower Policy
The Company has established a whistle blower policy and also
established a mechanism for directors and employees to report their concerns. The details
of the same are explained in the Corporate Governance Report. The Board of Directors based
on the recommendation of the Audit Committee has amended the Whistle Blower Policy to
inter alia, enable employees to report incidents of leak or suspected leak of unpublished
price sensitive information in line with the changes made in the SEBI (Prohibition of
Insider Trading) Regulations, 2015. As per the Whistle Blower Policy implemented by the
Company, the employees, directors, customers, dealers, vendors, suppliers, or any
Stakeholders associated with the Company are free to report illegal or unethical
behaviour, actual or suspected fraud or violation of the Company's Codes of Conduct or
Corporate Governance Policies or any improper activity to the Chairman of the Audit
Committee of the Company. During the year under review, no complaint pertaining to the
Company was received under the Whistle Blower Policy. The Vigil Mechanism/Whistle Blower
Policy is available at
https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.
(iii) Risk Management
The Company has a Risk Management process which provides an integrated
approach for managing the risks in various aspects of the business. The detailed framework
is provided in the Management Discussion and Analysis Report.
(iv) Internal Financial Controls and their adequacy
Your Company has in place adequate internal financial controls with
reference to the financial statements. The internal financial control system of the
Company is supplemented with internal audits, regular reviews by the management and checks
by external auditors. The Audit Committee ensures adequacy of the system. The Statutory
Auditors of the Company also provide their opinion on the internal financial control
framework of the Company.
During the year under review, no material or serious observation has
been highlighted for inefficiency or inadequacy of such controls.
(v) Disclosure under the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. The Company has complied with
provisions relating to the constitution of Internal Committee ("IC"), (formerly
known as Internal Complaints Committee) under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. The IC has been set up to redress the
complaints received regarding sexual harassment. All employees are covered under this
policy.
The following is the summary of the complaints received and
disposed-off during the financial year ended March 31, 2023: a) No. of complaints filed
during the financial year: Nil b) No. of complaints disposed off during the financial
year: Nil c) Number of complaints pending as on end of the financial year: Nil
N. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Section 135 of the Act and the Companies (Corporate Social
Responsibility Policy) Rules, 2014 have been amended substantially with effect from
January 22, 2021.
In line with the said amendments, the CSR Policy is available on the
Company's website at
https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.
In terms of the provisions of the Act read with the amended Companies
(Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities
in the format prescribed under Annexure II of the said Rules is annexed to this Report and
marked as Annexure -V.
O. CONSERVATION OF ENERGY, RESEARCH AND
DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information as per Section 134(3)(m) of the Act read with Rule 8 of
the Companies (Accounts) Rules, 2014 regarding Conservation of Energy, Research &
Development, Technology Absorption and Foreign Exchange Earning and Outgo is annexed
herewith as Annexure -VI.
P. BUSINESS RESPONSIBILITY AND SUSTANABILITY
REPORTING
Pursuant to Regulation 34(2) of the Listing Regulations read with SEBI
Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/ 562 dated May 10, 2021, the Business
Responsibility and Sustainability Reporting (BRSR) describing the initiatives taken by the
Company from an environmental, social and governance perspective forms part of this Annual
Report. The BRSR forms part of the Annual Report and can also be accessed on the Company's
website at https://dxc.com/in/ en/about-us/xchanging-solutions-limited-investor-relations.
Q. OTHER DISCLOSURES
(i) Share Capital
There was no change in the paid-up share capital of the Company. As on
March 31, 2023, the paid -up capital of the Company was Rs. 1,114,037,160/-. This
comprises 111,403,716 equity shares of Rs. 10/- each fully paid-up.
The Company has not issued any sweat equity shares or equity shares
with differential rights during the financial year.
(ii) Statutory Disclosures
None of the Directors of your Company are disqualified as per provision
of Section 164(2) of the Act. The Directors of the Company have made necessary disclosures
as required under various provisions of the Act and the Listing Regulations.
(iii) Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the
Annual Return as on March 31, 2023 is available on the Company's website at
https://dxc.com/ in/en/about-us/xchanging-solutions-limited-investor-relations.
(v) Compliance of Secretarial Standards
During the financial year under review, the Company has complied with
applicable Secretarial Standards on Board and General Meetings specified by the Institute
of Company Secretaries of India pursuant to Section 118 of the Act.
(vi) Appointment of Independent Director in unlisted material
Subsidiary
Pursuant to Regulation 24 of the Listing Regulations, Mr. Henry
D'Souza, Independent Director of the Company has been appointed as Independent Director on
the Board of Company's unlisted material subsidiaries i.e. Xchanging Solutions (USA) Inc
and Xchanging Solutions Singapore Pte Limited w.e.f. April 1, 2019.
(vii)Responsibility For Standalone:
The Company's Board of Directors is responsible for the information
included in the Board's Report including Annexures to Board's Report, Management
Discussion and Analysis and Corporate Governance Report including annexures thereon
For Consolidated:
The Parent Company's (Xchanging Solutions Limited) Board of Directors
is responsible for the information included in the Boards' Report including Annexures to
the Board's Report, Management Discussion and Analysis and Corporate Governance Report
including annexures thereon viii) Material changes and commitments affecting the financial
position of the Company
There have been no material changes and commitments affecting the
financial position of the Company which have occurred between the end of the financial
year to which the financial statements relate and the date of this Report.
(ix) Significant and material orders
During the Financial Year 2022-23, there were no significant and
material orders passed by the Regulators or Courts or Tribunals impacting the going
concern status and the Company's operations in future. Further, no penalties have been
levied by the SEBI or any other regulator during the year under review.
(x) Listing
Equity Shares of your Company are listed on National Stock Exchange of
India Ltd. and BSE Ltd. The Company has paid required listing fees to Stock Exchanges for
FY 2023-24.
(xi) Maintenance of Cost Records
The maintenance of cost records, for the services rendered by the
Company, is not required pursuant to Section 148 (1) of the Act read with Rule 3 of the
Companies (Cost Records and Audit) Rules, 2014.
(xii)Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
Certificate
In terms of the Listing Regulations, the certificate, as prescribed in
Part B of Schedule II of the said Regulations, has been obtained from Mr. Nachiket
Vibhakar Sukhtankar, Managing Director & Chief Executive Officer and Mr. Shrenik Kumar
Champalal, Whole Time Director & Chief Financial Officer, for the Financial Year 2022
- 2023 with regard to the Financial Statements and other matters. The said Certificate is
attached herewith as Annexure - B and forms part of Corporate Governance Report. xiii) Any
proceedings under the Insolvency and Bankruptcy Code, 2016
There are no proceedings initiated/pending against your Company under
the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the
Company. xiv) There were no instances where your Company required the valuation for one
time settlement or while taking the loan from the Banks or Financial institutions.
ACKNOWLEDGEMENTS AND APPRECIATION:
The Directors would like to express their sincere appreciation for the
co-operation and assistance received from the Company's Bankers, Regulatory Bodies and
Stakeholders including other business associates who have extended their valuable
sustained support and encouragement during the year under review. The Directors also wish
to place on record their deep sense of gratitude and appreciation for the commitment
displayed by executives, officers and staff at all levels of the Company, resulting in the
successful performance of the Company during the year under review. We look forward to
your continued support in the future.
For and on behalf of the Board of Directors, |
Nachiket Vibhakar Sukhtankar |
Shrenik Kumar Champalal |
Managing Director & |
Whole Time Director & |
Chief Executive Officer |
Chief Financial Officer |
Place: Mumbai |
Place: Bangalore |
Date: May 25, 2023 |
Date: May 25, 2023 |