You are here » Home » Companies ยป Company Overview » NELCO Ltd

NELCO Ltd.

BSE: 504112 Sector: Telecom
NSE: NELCO ISIN Code: INE045B01015
BSE 13:42 | 21 Mar 524.20 5.75
(1.11%)
OPEN

529.85

HIGH

529.85

LOW

519.00

NSE 13:29 | 21 Mar 525.80 8.35
(1.61%)
OPEN

524.70

HIGH

528.75

LOW

519.45

OPEN 529.85
PREVIOUS CLOSE 518.45
VOLUME 5519
52-Week high 1089.95
52-Week low 503.25
P/E 67.81
Mkt Cap.(Rs cr) 1,196
Buy Price 524.05
Buy Qty 1.00
Sell Price 524.25
Sell Qty 1.00
OPEN 529.85
CLOSE 518.45
VOLUME 5519
52-Week high 1089.95
52-Week low 503.25
P/E 67.81
Mkt Cap.(Rs cr) 1,196
Buy Price 524.05
Buy Qty 1.00
Sell Price 524.25
Sell Qty 1.00

NELCO Ltd. (NELCO) - Director Report

Company director report

To

The Members

The Directors have pleasure in presenting Seventy Nineth Annual Report of Nelco Limited(Company or Nelco) alongwith the Audited Statement of Accounts for the year ended 31stMarch 2022.

As informed earlier the Hon ble National Company Law Tribunal (NCLT) Mumbai Benchapproved the Composite Scheme of Arrangement and Amalgamation (Scheme) involving theinternal restructuring of the various businesses of the Company and its two wholly ownedsubsidiaries viz. Tatanet Services Limited (TNSL) and Nelco Network Products Limited(NNPL). As per the NCLT order the scheme shall be effective on the date on which the lastof all the approvals and sanctions from appropriate authorities as may be required underthe law in respect of the Scheme have been obtained. The Company received the requisiteapproval from Department of Telecommunications (DoT) on 9th June 2021 fortransfer of the Internet Service Provider license and VSAT license from TNSL to theCompany under the Scheme. Accordingly the Scheme became effective on 9th June2021.

1. Financial Results

(Rs in lakhs)

Sr. No. Particulars Standalone* Consolidated
FY2021-22 FY2020-21 FY2021-22 FY2020-21
A Continuing Operations
a Revenue from Operations 14316 13112 26007 22612
b Other Income 259 152 474 284
c Total Income 14575 13264 26481 22896
d Operating Expenditure 12143 10768 20949 18125
e Profit before finance cost tax and depreciation and amortization (PBITDA) 2432 2496 5532 4771
f Less: Finance Cost 268 438 753 953
g Less: Depreciation/Amortization 835 809 2464 2230
h Net Profit/(Loss) before tax 1329 1249 2315 1588
i Current/Deferred Tax Expenses 307 325 707 352
j Net Profit/(Loss) after Tax 1022 924 1608 1236
B Discontinuing Operations** (being transferred to Wholly Owned Subsidiary)
k Profit from Discontinuing operations (before tax) 116 330 - -
l Tax Expenses 29 27 - -
m Profit after Tax from Discontinuing operations 87 303 - -
C Profit after tax from Total Operations 1109 1227 1608 1236
n Add: Other comprehensive income/(expenses) (56) 28 (30) 28
o Total Comprehensive Income 1053 1255 1578 1264

**Operations that are being transferred to Nelco Network Products Ltd. (Wholly OwnedSubsidiary) as a part of internal restructuring.

* During the year the Company has received approval from Department ofTelecommunications (DoT) for transfer of VSAT and ISP license held by subsidiary CompanyTatanet Service Limited (TNSL) to Nelco Limited. Upon approval from DoT the scheme ofrestructuring becomes effective from appointment date i.e. April 1 2017. Pursuant toapproval the Proposed Scheme has been accounted for as follows.

- Discontinued operations have been transferred to NNPL in accordance with IND AS 105.Considering the materiality and convenience reason demerger impact is given from June 12021; and

-TNSL merger has been accounted in Nelco Limited (standalone) in accordance withAppendix C of IND AS 103 Business Combination and accordingly results of all the previousperiods have been restated by including results of the Company from the beginning of theprevious year i.e. April 1 2020.

2. Dividend

The Directors of your Company recommend for FY 2021-22 a dividend of Rs 1.80 per shareof Rs 10/- each i.e. 18% (previous year Rs 1.20 per share i.e. 12%) subject to theapproval of the Members at the ensuing AGM. If approved the total dividend outgo for FY2021-22 would amount to Rs 410.73 lakhs (previous year Rs 273.82 lakhs).

According to Regulation 43A of the Listing Regulations the top 1000 listed entitiesbased on market capitalization calculated as on 31st March of every financialyear are required to formulate a dividend distribution policy which shall be disclosed onthe website of the listed entity and a web-link shall also be provided in their annualreports. Accordingly the Dividend Policy of the Company can be accessed using thefollowing link: https://www.nelco.in/pdf/Policies/dividend-distribution-policy.pdf

3. Financial Performance and the state of the Company's affairs

3.1 Standalone

On a Standalone basis your Company achieved revenue of Rs 14316 Lakhs in FY 2021-22from Continuing Operations as against Rs 13112 Lakhs in FY 2020-21. In FY 2021-22 theCompany earned from continued operations a net profit after tax of Rs 1022 Lakhs fromits total operations as against profit of Rs 924 Lakhs in FY 2020-21. This was due toincrease in service revenue from satellite connectivity services.

In FY 2021-22 revenue from discontinued operations is Rs 1406 Lakhs whereas in PY2020-21 revenue was Rs 9513 Lakhs. There is lower revenue in the current year asDiscontinued Operations were carried by the Company for two months till scheme of internalrestructuring became effective whereas in the previous year revenue was for full yearperiod. Profit after tax from Discontinued Operations for 2021-22 is Rs 87 Lakhs and for2020-21 Rs 303 Lakhs. Same has been transferred by the Company to its subsidiary NelcoNetwork Products Limited (NNPL) in accordance with approved scheme of internalrestructuring.

Profit from Discontinuing Operations are calculated considering the direct cost ofthose Operations and interest on identifiable loans that are being transferred under theScheme. The entire corporate overheads are considered part of Continuing Operations.

3.2 Consolidated

On a Consolidated basis revenue from Operations was Rs 26007 Lakhs in FY 2021-22 asagainst Rs 22612 Lakhs in FY 2020-21 i.e. increase by 15% over previous year.

The segment wise performance (Consolidated) from total operations for the year was asfollows:

Based on evaluation of key financial parameters the Company believes that it operatesin only one reportable segment i.e. Network Systems and accordingly the financial resultsare reported as single reportable segment from the year ended 31st March 2020.The Company earned a net profit after tax of Rs 1608 Lakhs from total operations asagainst profit of Rs 1236 Lakhs in FY 2020-21. No material changes and commitments haveoccurred after the close of the year under review till the date of this Report whichaffect the financial position of the Company.

3.3 Operations

Information in detail has been given in the Management Discussion & Analysis whichforms a part of this report.

4. Reserves

The Board of Directors has decided to retain the entire amount of profit for FY 2021-22in the statement of profit and loss.

5. Subsidiary Companies

5.1. The Company has one wholly owned subsidiary i.e. Nelco Network Products Ltd.(NNPL) as on 31st March 2022. The other wholly owned subsidiary TatanetServices Ltd. was amalgamated with the Company on 9th June 2021 pursuant toNCLT order approving the Composite Scheme of Arrangement and Amalgamation (Scheme).

NNPL holds Inflight & Maritime Communication (IFMC) licence issued by DOT. Pursuantto the Scheme it has acquired from the Company two businesses on a going concern basis byway of slump sale. These businesses are (a) Industrial Security and Surveillance System(ISSS) and (b) sale and maintenance of VSAT and related equipment. There has been no othermajor change in business of NNPL during the year under review. The revenue of NNPL for FY2021-22 was Rs 11734 Lakhs and profit after tax was Rs 578 Lakh and the accumulatedreserve and surplus since incorporation was Rs 3382 Lakhs.

As required under Section 129(3) of the Companies Act 2013 (Act) the salient featuresof financial statements of NNPL in Form AOC-1 is attached to the financial statements ofthe Company.

Further pursuant to Section 136 of the Act the financial statements of the Companyconsolidated financial statements along with relevant documents and separate auditedfinancial statements in respect of subsidiary Company are available on the website of theCompany https://www.nelco.in/investor-relation/financial.php. The Policy for determiningmaterial subsidiaries of the Company has been provided in the following link:

https://www.nelco.in/pdf/Policies/Policy%20for%20determining%20Material%20Subsidiaries.pdf.

6. Directors and Key Managerial Personnel

Change in Board Composition

Directors Appointment

Pursuant to the recommendation of the Nomination and Remuneration Committee ( NRC )the Board of Directors appointed Mr. Saurabh Ray as Additional Director of the Companywith effect from 26th April 2022. In accordance with Section 161(1) of the Acthe holds office upto the date of the ensuing AGM and a Notice under Section 160(1) of theAct has been received from a Member signifying the intention to propose their appointmentas Director. The Board recommends his appointment as Director of the Company.

Cessation

On 29th May 2022 Mr. R. R. Bhinge ceases to be Director and Chairman of theCompany on attaining the age of 70 years (the age of retirement) as per the GroupGovernance Guidelines on Board Effectiveness for retirement of Non-ExecutiveDirectors. Mr. Anand Agarwal the nominee of the Parent Company The Tata Power CompanyLtd. (TPC) resigned from the Board of Directors of the Company w.e.f. 26thApril 2022 on withdrawal of his nomination by TPC.

The Board placed on record its deep sense of appreciation of the valuable contributionmade by Mr. Bhinge and Mr. Agarwal to the operations and growth of the Companyduring their association with the Company.

Re-appointment

In accordance with the provisions of Section 152 of the Act and the Articles ofAssociation of the Company Mr. P. J. Nath retires by rotation at the ensuing AGMand being eligible has offered himself for re-appointment. Independent Directors In termsof Section 149 of the Act and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 (Listing Regulations) the Shareholders of the Company appointed Mr. K.N.Murthy Dr. Lakshmi Nadkarni and Mr. Ajay Kumar Pandey as Independent Directorsfor a period of 5 years from 28th January 2020 to 27th January 2025.The Company has received declarations from them confirming that they meet the criteria ofindependence as prescribed under Section 149(6) of the Act read with Rules framedthereunder and Regulation 16(1) (b) of the Listing Regulations. In terms of Regulations25(8) of the Listing Regulations the Independent Directors have confirmed that they arenot aware of any circumstance or situation which exists or may be anticipated that couldimpair or impact their ability to discharge their duties.

In the opinion of the Board the Independent Directors fulfil the conditions ofindependence specified in the Act and the Listing Regulations and are independent of themanagement. Further the Board is of the opinion that the Independent Directors of theCompany possess requisite qualifications experience (including the proficiency) andexpertise in their respective fields and that they hold highest standards of integrity.

Further the Independent Directors of the Company wherever applicable have undertakenrequisite steps towards the inclusion of their names in the data bank of IndependentDirectors maintained with the Indian Institute of Corporate Affairs in terms of Section150 of the Act read with Rule 6 of the Companies (Appointment & Qualification ofDirectors) Rules 2014.

Additional information and brief profile as stipulated under Listing Regulations andSecretarial Standards-2 on General Meetings with respect to Director seeking appointmentis annexed to the Notice of AGM.

During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than sitting fees andreimbursement of expenses incurred by them for the purpose of attending meetings of theBoard/Committee of the Company.

Pursuant to Section 203 of the Act the Key Managerial Personnel of the Company as on31st March 2022 are:

Mr. P.J. Nath Managing Director & CEO
Mr. Malav Shah Chief Financial Officer
Mr. Girish Kirkinde Company Secretary & Head-Legal

Mr. Uday Banerjee Chief Financial Officer superannuated from the services of theCompany on 31st December 2021. Number of Board meetings During the year underreview Seven Board Meetings were held. For further details please refer Report onCorporate Governance. Governance Guidelines: The Company has adopted Governance Guidelineson Board Effectiveness. The said Guidelines covers aspects related to composition and roleof the Board Chairman and Directors Board diversity definition of independenceDirector s term retirement age and Committees of the Board. It also includes aspectsrelating to nomination appointment induction and development of Directors DirectorRemuneration subsidiary oversight Code of Conduct Board Effectiveness Review andmandates of Board Committees.

7. Annual Evaluation of Board Performance and Performance of its Committees andIndividual Directors

As required under the Act and Listing Regulations the Board has carried out formalannual evaluation of the performance of the Board its Committees and of individualdirectors. The performance of the Board was evaluated by the Board after seeking inputsfrom all the Directors on the basis of criteria such as the Board composition andstructure effectiveness of board processes information and functioning etc.

The performance of the Committees was evaluated by the board after seeking inputs fromthe Committee members on the basis of criteria such as the composition of Committeeseffectiveness of Committee meetings etc.

The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on January 5 2017. In a separate meeting ofIndependent Directors performance of non-Independent Directors the Board as a whole andthe Chairman of the Company was evaluated considering the views of Executive Director andnon-Executive Directors. The Board and the NRC reviewed the performance of individualDirectors on the basis of criteria such as the contribution of the individual Director tothe Board and Committee meetings like preparedness on the issues to be discussedmeaningful and constructive contribution and inputs in meetings etc.

In the Board meeting that followed the meeting of the Independent Directors and meetingof Nomination and Remuneration Committee the performance of the Board its Committeesand individual Directors was also discussed. Performance evaluation of IndependentDirectors was done by the entire Board excluding the Independent Director beingevaluated.

Based on inputs received from the Board members it emerged that the Board had a goodmix of competency experience qualifications and diversity. Each Board member contributedin his/her own manner to the collective wisdom of the Board keeping in mind his/her ownbackground and experience. There was active participation and adequate time was given fordiscussing strategy. Overall the Board was functioning very well in a cohesive andinteractive manner.

7.1 Committees of the Board

The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority. The following substantive Committees constituted bythe Board function according to their respective roles and defined scope:

Audit Committee (AC)
Nominations HR and Remuneration Committee (NRC)
Stakeholders Relationship Committee (SRC)
Corporate Social Responsibility Committee (CSRC)
Risk Management Committee (RMC)
Executive Committee of the Board (ECOB)

Details of composition terms of reference and number of meetings held for respectiveCommittees are given in the Report on Corporate Governance which forms part of the AnnualReport. Further during the year under review all recommendations made by the AuditCommittee have been accepted by the Board.

The details of the familiarization programs for Independent Directors are disclosed onthe Company s website and the web link for the same is:https://www.nelco.in/pdf/Policies/programme-f-d-policy.pdf The Company has adopted a Codeof Conduct for its Non-Executive Directors including a code of conduct for IndependentDirectors which suitably incorporates the duties of Independent Directors as laid down inthe Act. The Company has also adopted the Tata Code of Conduct for its employees includingthe Managing and Executive Directors. The above codes can be accessed on the Company swebsite at https://www.nelco.in/investor-relation/corporate-governance.php: Interms of the Listing Regulations all Directors and senior management personnel haveaffirmed compliance with their respective codes. The CEO & Managing Director has alsoconfirmed and certified the same which certification is provided at the end of the Reporton Corporate Governance.

7.2 Remuneration Policy for the Directors Key Managerial Personnel and other Employees

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read withPart D of Schedule II to the Listing Regulations the NRC is responsible for formulatingthe criteria for determining qualification positive attributes and independence of aDirector. The NRC is also responsible for recommending to the Board a policy relating tothe remuneration of the Directors Key Managerial Personnel and other employees. In linewith this requirement the Board has adopted the Policy on Board Diversity which isreproduced in Annexure-I forming part of this report and Remuneration Policy forDirectors Key Managerial Personnel and other employees of the Company is available on thewebsites of the Company at:https://www.nelco.in/pdf/Policies/Remuneration%20Policy%20for%20Directors%20KMP%20and%20Other%20employees.pdf.

Salient Features of this policy are as under:-

- The philosophy for remuneration of DirectorsKey Managerial Personnel("KMP") and all other employees of Nelco Ltd. ( Company ) is based on thecommitment of fostering a culture of leadership with trust. The remuneration policy isaligned to this philosophy.

- Independent Directors ("ID") and non-independent Non-Executive Directors("NED") may be paid sitting fees (for attending the meetings of the Board and ofcommittees of which they may be members) and commission within regulatory limits.

- Overall remuneration should be reflective of size of the company complexity of thesector/industry/ company s operations and the company s capacity to pay the remuneration.

- The NRC will recommend to the Board the quantum of commission for each director basedupon the outcome of the evaluation process which is driven by various factors includingattendance and time spent in the Board and committee meetings individual contributions atthe meetings and contributions made by directors other than in meetings.

- The extent of overall remuneration to Managing Director ("MD")/ ExecutiveDirectors("ED")/ KMP/ rest of the employees should be sufficient to attract andretain talented and qualified individuals suitable for every role.

- The remuneration mix for the MD/EDs is as per the contract approved by theshareholders.

- In addition to the basic/fixed salary the company provides to other KMPs andemployees with certain perquisites allowances and benefits to enable a certain level oflifestyle and to offer scope for savings and tax optimization where possible and alsoperformance linked bonus.

- Remuneration is payable to Director for services rendered in professional capacityand which NRC is of the opinion that the director possesses requisite qualification forthe practice of the profession.

- There is no change in the aforesaid policies during the year under review.

- Except the Performance Linked Payment (PLP) which is a part of his Cost to theCompany (CTC) the Managing Director & CEO has neither received any commission fromthe Company nor from its Holding or Subsidiary Company.

7.3 Particulars of Employees and Remuneration

Disclosures pertaining to 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 ( Rules) is provided in Annexure - II (A) forming partof 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 II (B) forming part of this report. None of theemployees listed in the said Annexure II (B) is related to any Director of the Company. Interms of proviso to Section 136(1) of the Act the Report and Accounts are being sent tothe shareholders excluding the aforesaid Annexure. The said Statement is also open forinspection at the Registered Office of the Company. Any member interested in obtaining acopy of the same may write to the Company Secretary.

8. Significant and material Orders passed by the Regulators or Courts orTribunal

No significant and materials orders were passed by the Regulators or Courts orTribunals impacting the going concern status and your Company s operations in future.

Corporate Governance Management Discussion & Analysis and Business ResponsibilityReport

As per Listing Regulations the Corporate Governance Report with the AuditorsCertificate thereon and the Management Discussion and Analysis are attached which formspart of this Annual Report.

Pursuant to Regulation 34(2)(f) of the Listing Regulations the Business ResponsibilityReport initiatives taken from an environmental social and governance perspective in theprescribed format is attached as a separate section of this Annual Report.

Vigil Mechanism

The Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behaviour. In line with the Tata Code of Conduct (TCoC) any actual orpotential violation howsoever insignificant or perceived as such would be a matter ofserious concern for the Company. The role of the employees in pointing out such violationsof the TCoC cannot be undermined. Pursuant to Section 177(9) of the Act and Regulation4(2)(d)(iv) of the Listing Regulations a Whistle-blower Policy and Vigil Mechanism wasestablished for Directors employees and stakeholders to report to the Managementinstances of unethical behaviour actual or suspected fraud or violation of the Company scode of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employeesof the Company to approach the Chief Ethics Counsellor (CEC)/Chairman of the AuditCommittee of the Company for redressal. The Company has revised the Whistle-blower Policyto include reporting of incidents of leak or suspected leak of unpublished price sensitiveinformation in terms of SEBI (Prohibition of Insider Trading) Regulations 2015 asamended from time to time. The revised Policy was approved by the Board at its meeting.The updated policy has been posted on the Company s website at https://www.nelco.in/pdf/Policies/Whistle%20Blower%20Vigil%20Mechanism%20Policy.pdf.The Company affirms that no personnel have been denied access to the Audit Committee

9. Risks and Concerns

The Company is faced with risks of different types including strategic financialregulatory and operational. Each of the risks need different approaches for mitigation andmanagement. Details of various risks faced by the Company are provided in ManagementDiscussion & Analysis.

9.1 Risk Management Framework and Internal Financial Controls

Risk Management framework: The Company has established a risk management frameworkand policy based on which risks are identified and assessed across its business segments.The Risk Management Committee (RMC) of the Board was constituted in FY22 to enhance thefocus on risk identification and mitigation. The Committee is responsible for monitoringand reviewing the risk management plan and ensuring its effectiveness. The Company s keyrisks are discussed with RMC on a half yearly basis.

The Audit Committee and Board have an additional oversight in the area of key strategicand financial risks and controls. The major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuing basis.

The internal Risk Management Committee at the Company level which comprises of the CEOCFO Risk Officer and key business and operations heads ensures that existing and futurerisk exposures of the Company are identified assessed quantified minimized managed andappropriately mitigated. The Company s framework of risk management process provides clearbasis for informed decision making at all levels of the organization on an ongoing basishaving duly evaluated likely risks and their mitigation plans being controllable andwithin risk appetite of the Company. There are no elements of risk which in the opinionof the Board may impact the existence of the Company.

Internal Financial Control and Systems: The Company has an internal control systemcommensurate with the nature of its business the size and complexity of its operationsand as such the internal financial controls with reference to the Financial Statements areadequate. The Company has appointed independent Chartered Accountant firm as InternalAuditors who audits governance risks management and internal controls and processes. TheInternal Auditors present their findings to the Audit Committee. Testing of InternalFinancials Controls also form a part of internal audit schedule. The scope and authorityof internal audit is defined in Audit Committee Charter adopted by the Company. As per theAudit Committee Charter adopted by the Board and as per provisions of Section 177 of theCompanies Act 2013 (the Act) one of the responsibilities of the Audit Committee is toreview the effectiveness of the Company s Internal control system including InternalFinancial Controls. Internal controls have been discussed in detail in ManagementDiscussion & Analysis in this report. The Company has implemented robust processes toensure that all internal financial controls are effectively working. On review of theinternal audit observations and action taken on audit observations there are no adverseobservations having material impact on financials commercial implications or materialnon-compliances which have not been acted upon. In addition the statutory auditors carryout an audit at quarterly intervals and these reports also have not reported any adversefindings.

Process Robustness: The Company also carries out business excellence assessmentsand process deep dives through external agencies to establish and improve efficiency andeffectiveness of processes in various key functions. The Company assesses the processmaturity and robustness for its key functions on the following:

- Process documentation and workflow
- Process measures and controls (manual/system driven) including maker-checker mechanisms
- Performance tracking for key measures/metrics
- Initiatives taken for process improvements

The Company also carries out internal audits and process deep dives through externalagencies to establish and improve efficiency and effectiveness of processes in various keyfunctions. On review of the internal audit observations and action taken on auditobservations there are no adverse observations having material impact on financialscommercial implications or material non-compliances which have not been acted upon. Inaddition the statutory auditors carry out an audit at quarterly intervals and thesereports also have not reported any adverse findings.

10. Sustainability

10.1 Corporate Social Responsibility

The Company has formed a CSR committee comprising of the following Directors:

Mr. R. R. Bhinge Chairman
Dr. Lakshmi Nadkarni and
Mr. P. J. Nath

As the Company has not earned net profits computed as defined in Section 198 of theAct it is not mandatorily required to spend on CSR activities. However after theamalgamation on 9th June 2021 of Tatanet Services Ltd. (TNSL) as per the Schemewith the Company TNSL s obligation for CSR spend of Rs 14.76 Lakhs stands transferred tothe Company. Accordingly the Company spent Rs 14.76 Lakhs for FY2021-22 towards the CSRactivities. The annual report on CSR activities is provided in Annexure - III to thisReport. The Company has formulated the policy on CSR which is available on Company swebsites: https://www.nelco.in/pdf/Policies/ CSR%20Policy.pdf. The Company motivatesemployees to take up volunteering which benefit the society through participation in Nelcoorganized CSR activities Tata ProEngage and Tata Volunteering week.

10.2 Safety Health and Environment

The Company placed utmost importance to establish a safe work environment for itsemployees contractual workforce suppliers visitors and partners. Specific focus wasgiven to determine safety standards on Office Safety Field Safety Working at Heightsafety & Electrical and Fire Safety. The Apex Safety Committee met frequently toassess the work conditions Incident reported and risk assessments. The Works Committeeensured specific safety norms are followed across regions. Reporting of Incidences andunsafe conditions are encouraged and the committee analysed the reported instances andcorrective actions taken to avoid recurrence.

The Company adopts a proactive and responsible approach to safeguard the welfare of itsemployees. Communication on health tips virtual seminars on health topics fitnessrelated sessions Doctors availability in the premise are some of the services availablefor employees and families.

Training & awareness sessions were conducted periodically on Fire Safety and onusage of the fire saving equipment. Fire Evacuation Drills were conducted to checkemergency preparedness. The compliance related to the Fire safety are followed and auditedperiodically to ensure adherence.

While VSAT services qualified under the essential services category Safety and Healthof the employees especially those who were in customer services roles and employees whowere visiting offices under special circumstances were taken on priority. All hygienespecific guidance were followed. Regular deep cleaning of the office premises and checksincluding thermal screening oximeter check footwear disinfectant and vehiclesanitization continued to ensure safety of the employees in office. Company initiatedvaccination drives for employees & families and contract resources in the year. A partof our employees continued to work from home during the year.

11. Human Resources

As on 31st March 2022 the Company had employee strength of 86. During theyear under review 9 employees were recruited and 10 employees were separated. Variouspeople related initiatives were undertaken by the Company during the year to enableorganizational growth through people care and development which include:

During on going Pandemic and lockdownHealth and well being of the employees had becomea major priority for the Company. The connect meetings gave opportunities to employees toexpress themselves and get solutions to their work matters. Besides HR connect meetingsthe regular connect sessions were conducted by the Department Heads. Over and above thisthe MD connect sessions were also initiated to ensure that the employees are heard at thehighest level and encouraged to give their best. The Company strengthened its engagementwith 3rd party contract employees and included Franchisees and its engineerstoo in the connect programs. Special learning programmes including Technical Functionaland Behavioural trainings were designed for contract employees and the Franchiseeengineers. These trainings also included sessions on TCoC Safety & POSH awareness.Performance awards were also announced for the Franchisee engineers.

Every year Employee Engagement Surveys are conducted to enable people to voice outtheir concerns and suggestions for making the workplace better for everyone. The Companyutilises multiple platforms that encourage open communication amongst employees and allowthem to voice their opinion. MD Connects and Ideas Portal are two such platforms whereemployees share ideas which are further evaluated by a committee and translated intoactions wherever feasible. Knowledge sessions and employee welfare and sports activitiesare also conducted from time to time to ensure continuous learning team bonding andmotivation.

Reward & Recognition: In order to make recognitions an integral part of theCompany it has automated the Reward and Recognition module to ensure timely recognition.By introducing additional reward categories in the policy which includes anytimeanywhere appreciation Nelco wishes to add more vigour and robustness in the way employeesare recognised and appreciated for their exemplary performances and operationalexcellence. Nelco Innovista awards is a platform which rewarded participants for theircreative and innovative minds.

Capability Development: Company focuses on overall capability building of functionalmanagerial and behavioural skills. The capability building programs considering thepresent and future business requirements are part of strategic planning exercise. Trainingneeds are primarily sourced through performance appraisal discussions with respectivemanagers. Training programmes are facilitated by e-learning platform as well as internaland external trainers. During pandemic the Company has been committed towards buildingthe skill levels of employees through organizing virtual workshops and fulfilling thetraining requirements through e-learning platforms. Employees were encouraged to undergotrainings of their choice apart from the training needs identified by their managers. Thecompany also arranged webinars and learning opportunities through Tata group learningportals & webinars and helped employees upgrade their knowledge.

Innovation in working is encouraged through competitions like Tata Innovista and TataBusiness Leadership Awards where employees showcase creative ideas/actions in businessprocess or technology. A comprehensive Competency assessment is carried out for employeesand plans made for bridging the identified skill gaps through relevant training programs

Performance & Talent Management: Employee performance is monitored and managedthrough rigorous processes of Performance Appraisal. Mapping the SMART goals in the onlinesystem ensures that Goals are properly maintained and tracked for improving the peoplesdepartments and overall organization s productivity. The Annual Performance evaluation isbased on achievement against pre-defined Key Result Areas (KRAs) for each individualwhich are agreed at the beginning of the year and the role-based Tata Leadership Practices(TLP). Continuous dialogue is encouraged between managers and their teams with focus onguiding and training first time managers through performance coaching. Talent managementframework is rolled out for High-Potential employees which help them to grow in theorganization faster. The Company also conducted Critical resources Planning exercise inorder to create succession plan at the middle management level.

Succession Planning: Successors have been identified for critical positions (for N& N-1 level) in the Company to ensure business continuity. Based on the outcome ofthis process decisions to hire capable person for specific positions have also beenrecommended. Wherever successors are not available a detailed back up plan is drafted toensure business is not impacted in case of any emergency situation.

TheCompanyhasaninstitutedPolicyonPreventionofSexualHarassment(POSH)whichseekstogoverntheguidelines and grievance redressal procedures as required under Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013. As per policy aComplaints Redressal Committee/Internal Complaints Committee has been formed in theCompany with inclusion of an external lady member. POSH related sessions were conductedfor employees and allied resources. No complaints related to POSH have been receivedduring the year. The Company has ensured to cover all the Associates Franchisee engineersand vendors in the POSH and Ethics workshops so that the culture of integrity and respectis spread throughout the extended arm of Nelco.

12. Credit Rating

During the year CRISIL has assigned ratings for long term and short-term bankfacilities of the Company to CRISIL A Stable and CRISIL A1 respectively.

13. Loans Guarantees Securities and Investments (LGSI)

Details of LGSI covered under the provisions of Section 186 of the Act 2013 are givenin Annexure IV forming part of this report.

14. Foreign Exchange ' Earnings and Outgo. ` ( in lakhs)

Particulars ' Standalone Year ended 31st March 2022 Year ended 31st March 2021
Foreign Exchange Earnings 4680 2764
Foreign Exchange Outflow 1434 2838

15. Auditors

Members of the Company at the AGM held on 13th August 2020 approved theappointment of S. R. Batliboi & Associates LLP Chartered Accountants (ICAI FirmRegistration No. 101049W /E300004) as the statutory auditors of the Company for a periodof 5 years commencing from the conclusion of the 77th AGM held on 13thAugust 2020 until the conclusion of 82nd AGM of the Company to be held in theyear 2025.

16. Auditors' Report

The standalone and the consolidated financial statements of the Company have beenprepared in accordance with applicable Indian Accounting Standards (Ind AS) notified underSection 133 of the Act. The Statutory Auditor s report does not contain anyqualifications reservations adverse remarks or disclaimers. The Notes to the Accountsreferred to in the Auditors report are self-explanatory and therefore do not call for anyfurther clarification under Section 134(3)(f) of the Act.

During the year under review neither the statutory auditors nor the secretarialauditors has reported to the Audit committee under Section 143 (12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in the Board s report.

17. Cost Auditors and Cost Audit Report

Your Board has appointed M/s. P.D.Dani and Associates (Firm Registration No. 000593)Cost Accountants as Cost Auditors of the Company for conducting cost audit for the FY2021-22. A resolution seeking approval of the Members for ratifying the remuneration of Rs125000 (Rupees One Lakh Twenty-Five thousand) plus GST and reimbursement ofout-of-pocket expenses on actual basis payable to the Cost Auditors for FY22 is providedin the Notice to the ensuing 79th AGM. As specified by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 the Company hasmaintained cost accounts and records.

18. Secretarial Audit Report

In terms of Section 204 of the Act and Rules made thereunder M/s. Bhandari &Associates Practicing Company Secretaries were appointed as Secretarial Auditors of theCompany to carry out the secretarial audit for FY 2021-22. The report of the SecretarialAuditors for FY 2021-22 is enclosed as Annexure- V forming part of this Report. There hasbeen no qualification reservation adverse remark or disclaimer given by the SecretarialAuditors in their Report. The Company has devised proper systems to ensure compliance withthe provisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.

As per the requirements of the Listing Regulations Practicing Company Secretaries haveundertaken secretarial audit for FY 2021-22 of Nelco Network Products Ltd. the materialunlisted subsidiary of the Company. As per the Audit Report (Annexure- V-A) the subsidiaryhad complied with the applicable provisions of the Act Rules Regulations and Guidelinesand that there were no deviations or non-compliances.

19. Conservation of Energy and Technology Absorption

The information on conservation of energy and technology absorption stipulated underSection 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules 2014is given in Annexure VI forming part of this report.

20. Related Party Transactions

In line with the requirements of the Act and the Listing Regulations the Company hasformulated a Policy on Related Party Transactions and the same is available on the Companys website: https://www.nelco.in/pdf/Policies/Related%20Party%20Transaction%20Policy.pdfAll related party transactions entered during the year under review were on an arm slength basis and were in the ordinary course of business. All transactions with relatedparties were reviewed and approved by the Audit Committee. Prior omnibus approval isobtained for related party transactions which are of repetitive nature and entered in theordinary course of business and on an arm s length basis. There were no other materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel and Body Corporate(s) which had a potential conflict with theinterest of the Company at large. Accordingly the disclosure of these Related PartyTransactions as required under Section 134 (3) (h) of the Act in Form AOC 2 is notapplicable for the year under review. The details of the transactions with related partiesare provided in the accompanying Financial Statements.

21. Deposits

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of theBalance Sheet.

22. Extract of Annual Return

Pursuant to Section 92 of the Act read with the appliable Rules the Annual Return forthe year ended 31st March 2022 can be accessed on the Company s website at thefollowing link: https://www.nelco.in/pdf/disclosure-of-events/annual-return-2021-22-nelco-ltd.pdf.

23. Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costauditors secretarial auditors and external consultants including the audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by Management and the relevant Board Committees including the Audit Committeethe Board believes the Company s internal financial controls were adequate and effectiveduring the period under review.

Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:

a) in the preparation of the annual accounts for the period ended 31st March2022 the applicable accounting standards had been followed along with proper explanationrelating to material departures.

b) they have in the selection of the accounting policies consulted the StatutoryAuditors and have applied them consistently and made judgments and estimates that arereasonable and prudent to give a true and fair view of the Company for the period ended 31stMarch 2022 and of the profit of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

d) they have prepared the accounts for the period under review on a going concernbasis.

e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively.

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

24. Acknowledgment

The Board of Directors thank the Company s shareholders customers vendors businesspartners bankers and financial institutions for their continuous support.

The Directors also thank the Government of India Dept. of Telecommunications Dept. ofSpace various Ministries Regulatory Authorities and their departments for theirco-operation. We appreciate and value the contributions made by all our employees.

On behalf of the Board of Directors
R.R. Bhinge
Chairman
Mumbai 26th April 2022

.