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Punjab Communications Ltd.

BSE: 500346 Sector: Telecom
NSE: PUNJCOMMU ISIN Code: INE609A01010
BSE 00:00 | 27 Jan 31.80 -1.55
(-4.65%)
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34.35

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34.35

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30.80

NSE 05:30 | 01 Jan Punjab Communications Ltd
OPEN 34.35
PREVIOUS CLOSE 33.35
VOLUME 3712
52-Week high 48.90
52-Week low 27.00
P/E
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 34.35
CLOSE 33.35
VOLUME 3712
52-Week high 48.90
52-Week low 27.00
P/E
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Punjab Communications Ltd. (PUNJCOMMU) - Director Report

Company director report

Your Board have pleasure in presenting the Forty First Annual Report of your Companytogether with the Audited Statement of Accounts for the Financial Year ended on 31stMarch 2022 along with Independent Auditors' Report thereon and Secretarial Audit Reportfor the financial year under report.

Financial Results

(Rs.ln lacs)

Particulars 2021-22 2020-21
Gross Income 1864.72 2904.31
Total expenditure 3186.66 4094.60
Profit before tax -1321.94 -1190.29
Profit/(Loss) after tax -1248.79 -1190.29
Other comprehensive Income/(Loss) -23.09 76.20
Total Comprehensive Income/(Loss) -1271.88 -1114.09
Dividend Nil Nil
Paid up equity 1202.36 1202.36
Profit/(Loss) appropriated to General Reserve 0.00 0.00
Profit/ (Loss) Account (Retained Earnings) -5969.82 -4697.94
Reserves (Including Capital Reserves) 2235.93 3507.80
Net Property Plant and Equipment & Investment Property 411.79 462.52
Capital employed 4111.87 5338.20
Earning/(Loss) per share (in Rs.) -10.39 -9.90
Cash earning/(loss) per share (in Rs.) -10.55 -9.43
Book value per share (in Rs.) 28.62 39.19

Web-link of Annual Return

The copy of Annual Return pursuant to the provisions of sub-section (3) of Section 92of the Companies Act 2013 is placed on the website of the company and web link of annualreturn is: http://www.puncom.com/?id=110

Meetings

During the year Six Board meetings were duly convened and held. The details of whichare given in the Corporate Governance Report. The intervening gap between the meetings waswithin the period as prescribed under the provisions of Companies Act 2013 SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (herein after referred to as"Listing Regulations") and Secretarial Standard (SS-1) on Meetings of Board ofDirectors.

Directors Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility statement it is hereby confirmed:

a) That in the preparation of the annual accounts for the Financial Year ended 31stMarch 2022; the applicable Indian Accounting Standards have been followed along withproper explanation relating to material departures;

b) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for the year under review;

c) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

d) That the Directors have prepared the annual accounts for the Financial Year ended 31stMarch 2022 on a going concern basis; and

e) That the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

f) That the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Frauds reported by Auditors u/s 143(12)

Your company has complied with all the provisions of Section 143 of the Companies Act2013. Hence there are no frauds reported by the Auditors other than those which arereportable to the Central Government. Further no fraud has been reported to the CentralGovernment.

Declaration by Independent Director(s)

All the Independent Directors on the Board of Puncom have given their respectivedeclaration under Section 149(7) that they meet the criteria of independence as per theprovisions of sub-section (6) of Section 149 of Companies Act 2013 along with Regulation16 (b) & Regulation 25 of SEBI Listing Regulations. All the independent directors ofthe company has declared that they have registered themselves with databank of IndependentDirectors as maintained by Indian Institute of Corporate Affairs in compliance with Rule6(1) of Companies (Appointment & Qualification of Directors) Rules 2014. Accordinglythe Board has formed a satisfactory opinion regarding integrity expertise and experienceof the independent directors after undertaking due assessment of the veracity of thedeclaration made by them.

All the independent directors of your company except Dr. Neelu Jain are not requiredto pass the online proficiency self - assessment test and falls under the exemptioncategory. Dr. Neelu Jain has recently registered herself with Independent Director OnlineDatabank and accordingly she is required to pass the test within two (2) years of herregistration.

Company's Policy relating to Directors appointment payment of remuneration anddischarge of their duties:

Pursuant to MCA notification G.S.R. 463 (E) dated 05th June 2015 ourcompany being a government company is exempted from the given requirement. However thecompany has in place a nomination & remuneration policy covering the aspects asprovided under Section 178(3) of the Companies Act 2013 and is available on the websiteof company at http://www.puncom.com/?id=107

Explanations or comments by the Board on qualification(s) reservation(s) or adverseremark(s) or Matter of Emphasis are as follows:

Management Reply to Statutory Auditors' Remarks

M/s Raj Gupta & Co Chartered Accountants was appointed as Statutory Auditors ofthe Company for the Financial Year 2021-22. Following are the 'Key Audit Matters' and'Emphasis of Matters' as pointed out by the Auditors in their Independent Audit Reportdated 25th May 2022.

a) Key Audit Matters

The company has reflected the value of investment in bonds of UPCSMFL at cost. Furtherthe principal amount of bond is fully guaranteed by the UP State Government but due tothe protracted litigation the time of recovery is indeterminable. [Also Refer note 5 and42(a)]

Management remarks on Key Audit Matters - Principal amount of bonds of UPCSMFL arefully guaranteed by U P State Government. State of Uttar Pradesh has offered a One TimeSettlement (OTS) however there is no decision on OTS as of now. Since the matter is sub -judice the time of recovery is indeterminable. Refer Note 3 and 42(a) of Balance Sheet.

b) Emphasis of Matters

i) Para (i) of Independent Auditor's Report- Regarding accounting of certain items ofincome and expenditure as and when they have been incurred ascertained or settled thesame have been accounted for as per disclosures made in Note 1 Significant AccountingPolicies Point I(b) being followed consistently.

ii) Para (ii) of Independent Auditor's Report-The Company has been selected fordisinvestment by the Cabinet Committee on Disinvestment Government of Punjab. During theFY 2019-20 the Directorate of Public Enterprises and Disinvestment Government of Punjabhad appointed M/s Resurgent India Limited Gurgaon (Haryana) as Transaction Advisor forPuncom Disinvestment. During FY 20-21 the Government of Punjab has closed the submissionof "Expression of Interest" (EOI) by eligible bidders on 1stFebruary 2021. Further as part of the disinvestment the company was in the process ofdue diligence activity. For this purpose DPED has approved the site visit from the period21/06/2021 onwards till 12/07/2021 i.e. within a three week period to carry out the duediligence. Accordingly the due diligence was conducted during this given period.Subsequent to site visit certain queries were raised to Puncom which has been addressed.Thereafter certain queries have been raised with the Director Industries and Commercewhich as per our knowledge is being replied.

iii) Para (iii) of Independent Auditor's Report- Regarding the matter of balanceconfirmations w.r.t to Note 9 & 21 of financial statements the company has sentbalance confirmation letter to all parties requesting them to confirm the balances within15 days of the receipt of the letter falling which the balance will be presumed to becorrect. The company has no other means of confirming the balances for which no responsehas been received except presuming them to be correct as per terms of letter.

Management Remarks on Emphasis of Matter:

Notes to accounts forming part of Annual Accounts are self-explanatory & exhaustiveto the remarks of Auditors in their report dated 25th May 2022 hence theManagement Reply to Auditors' Remarks/ Key Audit Matters and Emphasis of Matters is notrequired.

Management reply to Secretarial Auditors' Remarks

The Secretarial Audit for Financial Year 2021-22 was carried out by M/s S K Sikka &Associates Practicing Company Secretary Chandigarh and he has observed in hissecretarial audit report i.e. MR-3 that an amount of Rs 27722/- being unclaimedpertains to five (5) shareholders is still lying unpaid since year 2003 which was earlierkept in the escrow account maintained with Axis Bank Ltd but now pursuant to RBIguidelines it has been closed by the bank after providing a demand draft to the company.A total of 419 shares pertaining to (10) ten shareholders is lying in the escrow accountas required in the Buy-back guidelines with M/s Karvy Computershare Pvt. Ltd (Now KFinTechnologies Pvt. Limited). As reported by the Company in absence of relevant procedureand guidelines the same could not be transferred by the company in accordance withSection 124 of the Companies Act 2013 read with Regulation 39(4) & Schedule VI ofSEBI (LODR) Regulations 2015.

In this regard Management reply/ observation is that in the absence of any provisionswith respect to transferring of buy back amount & shares to IEPF Authority thecontinuous efforts are being made by your company in this regard with Investor Educationand Protection Fund Authority (IEPF Authority) as well as with officials of Axis Bank.Several correspondences are being made via emails and letters to IEPF Authority and allqueries raised by IEPF Authority is being duly replied with by your company.

Due to unilateral change in nature of account from "special account" to"normal account" by the Axis Bank without the consent & knowledge of yourcompany the bank has closed the buy-back escrow account as per the Reserve Bank ofIndia's circular no. DOR. No. BP.BC/7/21.04.048/2020-21 dated 6th August 2020on account of availment of cash credit (CC) / overdraft (OD) limit by the Company from thebanking system. Moreover the Company has filed a complaint against Axis Bank with itsNodal Officer to reopen the said Buy-back special account & credit back the DD amountto maintain the same as it is shareholders money till the time company received positiveresponse from IEPF authority. If no action will be taken by the Nodal Officer then yourcompany will be approaching the Principal Nodal Officer and lastly will file its complaintwith the Banking Ombudsman.

Particulars of Loans and Guarantees under Section 186 of the Companies Act 2013

The particulars with respect to Loans and Guarantees under Section 186 of the CompaniesAct 2013: NIL

Particulars of Related Party Transactions

Under Companies Act 2013: Puncom has not entered into any Related PartyTransaction as per the provisions of Section 188(1) of the Companies Act 2013 during thefinancial year under report. The required form AOC-2 has been appended as Annexure 1 tothis report.

Further the disclosures related to Related Party Transactions are also detailed inNote-12 and Note-40 of Notes to Accounts of Financial Statements for the year ended 31stMarch 2022. There are no materially significant related party transactions which havepotential conflict with the interest of the Company.

Under Regulation 34(3) of Listing Regulations 2015: Puncom has not entered intoany Related Party Transaction as per the Listing regulations and the disclosures as perSchedule V of the said regulations are as follows:

1. Loans and advances in the nature of loans to subsidiaries NIL
2. Loans and advances in the nature of loans to associates NIL
3. Loans and advances in the nature of loans to firms/companies in which directors are interested NIL
4. Acceptance of any amount in the form of loans and advances in the nature of loans from its holding company NIL

There are no transactions of the company with any person or entity belonging topromoter/promoter group holding 10% or more shareholding in company during the financialyear under review.

State of the Company's Affairs

Certain areas within the telecommunications industry have taken a business hit due toCovid-19 especially the companies having niche markets. Manufacturing units catering tosuch niche areas have suffered tremendously.

The imported electronic component such as chips capacitors etc. were not available inthe market due to break in supply chain. The delivery time of such components has becomevery high and their prices have increased due to their non-availability. Only theessential projects in railways were given funds and remaining were put on hold or delayedtill the situation stabilised. Therefore less number of tenders have been floated by therailways for V - Mux and OFC projects. Nevertheless Puncom pushed its product to railwaysthrough project executioners who were having OFC projects in hand. Railways is moving toIP based network and therefore Puncom has very timely identified the parties whoseproducts are technically eligible for such type of network and have tied up for buyingtheir equipment. Puncom has already started participating in the railway tenders which askfor execution of projects for IP-MPLS equipment. Puncom hopes to make some inroads inthese areas soon. Though the demand for Power Line Carrier Communication equipment hasdecreased yet Puncom is making efforts to grab maximum business for this equipment and itsproject work. The situation is expected to improve soon and the business shall be back tonormal as before.

Corporate Plan/ Market Scenario of our products

Puncom has made efforts to increase market share of its PLCC products during last two -three years. But the requirement of PLCC is declining in power sector as the network isbeing replaced with the installation of OPGW network based on SDH and I-PMPLS backbone.Puncom made efforts to increase market share of V-Mux in Railways in last two - threeyears by selling it to private contractors however the requirement is decreasing as therailways has decided to shift voice communication on VOIP and backbone communication fromSDH to IP-MPLS systems.

Puncom is executing OFC and PLCC turnkey projects for railways and power sector. Puncomhas extensive strengths to execute indoor OFC works. However since most of the railwaytenders now are being floated after clubbing both indoor and outdoor OFC works Puncom ismaking efforts to strengthen its resources for executing such works as well. This wouldhelp Puncom in improving its market share in Railways besides sales turnover. In the lastyear power sector has come up with very few tenders for PLCC therefore Puncom received feworders for this product. Similarly for PDH and Power Plants Puncom got few orders fromrailways because of very stiff competition from the small local contractors biddingdesperately in tenders to get business after COVID restrictions. The setback to theindustrial climate and Indian economy outlook caused by Covid-19 are likely to remain forsome time. Puncom too has not escaped the setback.

To further increase the market share of its products in Railway and Power sectornetworks Puncom is offering its products to other equipment installers for executingtheir turnkey projects. This helps in improving sales turnover and also increases thepresence of Puncom make equipment in these networks.

Puncom is also undertaking annual maintenance/repair contracts for PLCC V-Mux andPower Plants from various customers. Undertaking such value added services not onlycontributes towards sales turnover but also helps in strengthening the performance ofPuncom equipment in various networks of Railways power sector etc.

Puncom is making continuous efforts to add new products to increase its product mix byway of tie-ups with other companies and through in house re-engineering of existingproducts and new developments. In this direction Puncom has developed another productcalled Control communication equipment for OFC (CCEO)and getting orders regularly. In thecoming years it will contribute in improving sales turnover. Puncom is also looking foropportunities to provide services through tie-up with other companies involvinginstallation erection and commissioning work. Puncom has empaneled companies forintegrated multiplexer and IP-MPLS routers to execute railway projects in upgradation ofbackbone communication SCADA and communication for axel counter applications.

Telecom Scenario in India and Puncom approach

India has seen an exponential growth of telecom network in India for several years andnow has more or less universal broadband penetration. Liberal government policies andfierce competition between operators has ensured that India receives latest and bestequipment and technologies from MNCs at lowest prices. Additionally digital revolutionand APP based smart technologies have ensured that high speed network availability to oneand all is a more or less mandatory requirement for most day to day activities.

Large scale upgrade of main telecom network and IT is also changing the workenvironment and catalysing other segments like power railways defence governmentagriculture security education etc to upgrade their networks and work processes and aregenerating new business opportunities. New areas of network and information securityrenewable energy green and clean technologies information access and automation etc arebecoming increasingly important and are emerging as new growth segments. The governmentplans for setting up digital villages by making huge investment. The main objective ofdigital villages is to transform rural villages of India into smart villages through useof ICT applications. This will create employment opportunities for rural people by way ofpromoting the IT/ITeS industry and generate new business opportunities for telecomequipment manufacturers. Further Government plans to reduce the use of fossil fuel andencouraging EV and hybrid vehicles this will also create new business opportunities for EVinfrastructure equipment manufacturers.

Historically Puncom has been deriving its revenue mainly from Power Railway and BSNLsegments. Unfolding telecom and industrial scenario however foresees increased role of newrevenue streams from emerging growth segments. Puncom is monitoring these emerging trendsand is on lookout for appropriate opportunities for sustenance and growth and preparingitself to meet the emerging challenges in the changing environment. However the growth inthe telecom equipment manufacturing sector is grim except for mobile hand setmanufacturing industry.

Reserves

Due to losses in the current year no amount was carried over to Reserves and Surplus.Instead the reserves have been utilized to the extent of Rs 1271.87 Lacs.

Dividend

Owing to losses during the FY 21-22 the Directors of the company do not recommend anydividend for the Financial Year 2021-22.

Material changes and Commitments after the close of the Financial Year

The particulars with respect to material changes and commitments affecting thefinancial position of the company which have occurred between the end of the financialyear i.e. 31st March 2022 till the date of this report i.e. 9thAugust 2022 under Section 134(3)(l) of the Companies Act 2013 is as follows:

The company has offered the VRS Scheme year 2022 to its employees in line with PunjabGovt. guidelines and a total of 23 no. of employees opted for VRS Scheme and out of whichVRS of 22 employees were accepted and relieved from the services of the company w.e.f. 22ndJuly 2022.

There is an impact of approx. Rs. 10.75 crore (Ex Gratia including Gratuity) on thefinancial position of the company on account of VRS liability towards these 22 employeeswhich will be paid within a period of 60 days of relieving as per statue & VRS Scheme.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo:

a) Conservation of Energy

i) Steps taken & impact on conservation of energy:

Steps taken:

We have continued with the practice of switching off the supply to the areas where thenormal lights are not required or where the production work is not taking place. There areapproximately 3000 tube lights in our building-B-91 which we are slowly and steadilychanging to LED tubes.

Impact:

The consumption has reduced due to the above measures taken.

ii) Steps taken for utilizing alternate sources of energy:

The system is in place for alternate sources of energy.

iii) Capital investment on energy conservation equipments : NIL

b) Technology Absorption

i) Efforts made towards technology absorption:

Efforts are made from time to time towards technology absorption adoption andinnovation.

ii) Benefits derived:

Company is able to achieve significant cost reduction and improvement in the products.

iii) Technology imported (during the last three years) NIL
Details of technology imported N/A
Year of Import N/A
Whether the technology has been fully absorbed N/A
If not absorbed areas where absorption has not taken place and reasons thereof iv) Expenditure incurred on Research and Development N/A
(Rs. In Lacs)
Particulars 2021-22(Current Year) 2020-21 (Previous Year)
Capital NIL NIL
Recurring NIL NIL
Total R&D expenditure as a percentage of total turnover NIL NIL

c) Foreign Exchange Earnings and Outgo

The foreign exchange earnings and outgo during the Financial Year 2021-22 in terms ofactual inflows and actual outflows is given as follows:

(Rs. In Lacs)

Particulars 2021-22 (Current Year) 2020-21 (Previous Year)
EARNINGS
F.O.B Value of Exports NIL NIL
OUTGO
i) CIF Value of Import of Raw Materials 46.40 60.51
ii) Components & Spares NIL NIL
iii) Capital Goods NIL NIL
iv) Repair & Maintenance (P&M) imports NIL NIL
v) Foreign trave l & othe rs NIL NIL

Risk Management Policy

The requirement of establishing Risk Management Committee is not applicable to ourcompany. However the Risk Management Policy is still in place and was amended toincorporate the provisions of Regulation 21 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Corporate Social Responsibility (CSR)

As per the provisions of Section 135 of the Companies Act 2013 every company havingnet worth of Rupees Five Hundred crore or more or turnover of Rupees One Thousand crore ormore or a net profit of Rupees Five crore or more during any financial year is required tospend in every financial year at least 2% of the average net profits made during the threeimmediate preceding financial years on CSR activities. We would like to inform you that asper applicable provisions of Companies Act 2013 there is average net loss andaccordingly CSR provisions were not applicable during the year under review.

Composition of Committees of the Board

The Audit Committee Nomination and Remuneration Committee & StakeholdersRelationship Committee are duly constituted as per applicable provisions of SEBI (LODR)Regulations 2015 and Companies Act 2013 the details of which are mentioned in theCorporate Governance report annexed herewith.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of ListingRegulations read with subsequent MCA notification G.S.R. 463 (E) dated 5thJune 2015 the Board evaluation procedure is not applicable on us (exempted to Govt.Cos.) however there is a system in place for evaluation of performance of the Board itscommittees and individual directors.

The Nomination and Remuneration Committee considered the exemption provided to theGovernment Companies and decided to take the benefit of the exemption. As a resultCommittee decided to not to evaluate the performance of the KMP's and seniormanagement/HODs during Financial Year 2021-2022 except w.r.t. appointment of seniormanagement and other employees. The performance of Independent Directors was evaluated bythe entire Board (except by the Director being evaluated) in their 212thMeeting held on 25th May 2022.

Change in the nature of business

During the year 2021-2022 there was no significant change in the nature of Business ofthe Company. The company only expanded its operations as per the amended Objects Clause ofthe Memorandum of Association of the Company.

Directors and Key Managerial Personnel

Pursuant to Section 2(51) and 203 of the Companies Act 2013 read with related rulesthe Key Managerial Personnel of the company as on the date of report are as follows:

1. Sh. Uma Shankar Gupta IAS Managing Director

2. CMA Jagdeep Singh Bhatia Chief Financial Officer

3. CS Madhur Bain Singh Company Secretary

Following changes in the constitution of Board of Directors took place during theperiod under review upto 9th August 2022 on account of change in nomination byPunjab Information & Communication Technology Corporation Limited (Punjab Infotech)and otherwise from time to time;

Sr. No. Name Designation Period of Directorship
1. Sh. Alok Shekhar IAS Chairman 08.07.2020 to 27.07.2021
2. Sh. Hussan Lal IAS Chairman 27.07.2021 to 21.09.2021
3. Sh. Tejveer Singh IAS Chairman 21.09.2021 to 18.04.2022
4. Smt. Neelima IAS Managing Director 22.02.2021 to 06.10.2021
5. Sh. Sibin C. IAS Sr. Vice Chairman 22.02.2021 to 06.10.2021
6. Smt. Neelima IAS Sr. Vice Chairman 06.10.2021 to 09.11.2021
7. Smt. Neelima IAS Sr. V.C & Managing Director 09.11.2021 to 05.05.2022
8. Sh. Moti Ram Sharma Independent Director 26.09.2018 to 25.09.2021
9. Smt. Neena Singh Independent Director 31.03.2015 to 15.02.2022
10. Sh. Sibin C. IAS Sr. Vice Chairman 05.05.2022 to 11.07.2022
11. Sh. Dilip Kumar IAS Chairman 18.04.2022 & continuing
12. CA. D.K. Singla Independent Director 25.03.2022 & continuing
13. Dr. Neelu Jain Independent Director 25.03.2022 & continuing
14. Sh. Uma Shankar Gupta IAS Managing Director 05.05.2022 & continuing
15. Sh. Mohinder Pal IAS Sr. Vice Chairman 11.07.2022 & continuing
16. CA. Ramesh Goel Whole-time Director 09.08.2022 & continuing

In terms of Section 152 of the Companies Act 2013 Sh. Dilip Kumar IAS shall retireby rotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.

Details of Puncom's Subsidiaries

Puncom has one immaterial subsidiary namely M/s Punjab Digital Industrial SystemsLimited which has been ordered by the Hon'ble Punjab and Haryana High Court to be wound upon 20th February 2009. All the formalities in this regard for the company hasbeen completed. However it is pertinent to point out that with the existence of NationalCompany Law Tribunal (NCLT) / National Company Law Appellate Tribunal (NCLAT) the windingup case has been transferred from Hon'ble Punjab & Haryana High Court to NCLT / NCLAT.The National Company Law Tribunal (NCLT) is yet to issue the dissolution order in respectof subsidiary company namely M/s Punjab Digital Industrial Systems Limited.

Deposits

The particulars with respect to Deposits under Section 73 of the Companies Act 2013are: NIL.

Details of Significant and Material orders passed

During the financial year under report no significant order(s) was/were passed byCourts Tribunals affecting the going concern status and operations of the company infuture.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed. A report on the InternalFinancial Controls under clause (i) of sub-section 3 of Section 143 of the Companies Act2013 as given by the Statutory Auditors of the Company forms part of the IndependentAuditor's Report as Annexure B.

Non-maintenance of Cost Records

The disclosure with respect to maintenance of cost records as specified by the CentralGovernment under subsection (1) of Section 148 of the Companies Act 2013 is not requiredby the Company and accordingly no such accounts and records are made and maintained.

Disclosure under IBC

There is no application made or any proceedings pending under the Insolvency andBankruptcy Code 2016 (31 of 2016) during the year under review. Accordingly the statusas at end of current Financial Year may be treated as NIL.

Disclosure on difference in valuation during OTS

No fresh loans were taken from Banks and Financial Institutions during the reportingperiod. Accordingly there is NIL difference between valuation done at time of one timesettlement and valuation done while taking loan from Banks or Financial Institutions.

Vigil Mechanism/Whistle Blower Policy

The company has its "Vigil Mechanism/Whistle Blower Policy" in place. Inaccordance with the requirements of Regulation 4(2)(d)(iv) and Regulation 22 of ListingRegulations read with under Section 177 of the Companies Act 2013 CMA J.S. Bhatia CFOheading the Finance Division has been appointed as Vigilance and Ethics Officer. The weblink for the policy is http://www.puncom.com/? id=107

Disclosure relating to Remuneration of Directors and KMP:

A. Disclosure under Rule 5 (1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:

a) Ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year under report:

S. No. Name of the Director Median Remuneration of employees (Rs. In lacs) Ratio
1. Smt. Neelima (IAS)* 10.59 NIL
2. CMA Jagdeep Singh Bhatia 2.6:10

* Smt. Neelima IAS ceased to be Managing Director of the company w.e.f. 5thMay 2022.

b) Percentage increase in remuneration of each director Chief Financial Officer ChiefExecutive Officer Company Secretary or Manager if any in the financial year: There areonly two KMP covered under this and they are CMA Jagdeep Singh Bhatia CFO and Sh. MadhurBain Singh CS having an increase of 4.17% and 4.75% respectively in remunerationexcluding LTA & LE

c) Percentage increase in the median remuneration of employees in the FinancialYear 2021-22: 2.45%

d) Number of permanent (regular) employees on rolls of the Company as on 31/03/2022:188(includes one employee who retired on 31.03.2022).

e) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Average increase in remuneration is equivalent to the rate of inflation declared bystate for the purpose of D.A. The Company being Public Sector Undertaking (PSU) of Punjabfollows applicable pay-scales as per the service rules as amended from time to timethrough wage revision agreement executed with union from time to time and duly approved bythe Board of Directors of the Company uniformly for all its employees as per therespective designation and tenure of employee with the company.

f) Affirmation that the remuneration is as per the remuneration policy/service rulesetc. of the company: Yes the remuneration is as per remuneration policy/servicerules/requisite approvals of the company.

B. Disclosure under Rule 5(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014

The list of the top ten employees in terms of remuneration drawn is as follows:

Sr. No Name Desi gnation Remuneration received (in Rs.)* FY 2021-22 Nature of employment (whether contractual or otherwise) Qualifications and Experience Date of commencement of employment Comp leted Age (in yrs) Last employment held Percent age of equity shares held Whether relative of any director or manager if so name of such director/ manager)
1 Sh. Jagdeep Singh Bhatia DVP 3914769 Regular BCOM ICWAI; Over 40 yrs 01.07.1988 57 CDIL Nil No
2 Sh. Rupinder S Mainee AVP 3507022 Regular BSc & M BA; Over 36 yrs 09.03.1989 56 Delta Hamlin Ltd. Nil No
3 Smt. Namita Sharma GM 2815888 Regular BE; Over 28 yrs 17.11.1993 50 Nil Nil No
4 Smt. Raminder Kaur Addl. GM 2579639 Regular BE(Electronics) and PGDOM; Over 29 yrs 08.07.1993 49 Nil Nil No
5 Smt. Indu AGM 2542152 Regular MSc(Physics)PGDBA 30.09.1991 53 Nil Nil No
Walia (Operation) MCA; Over 30 yrs
6 Sh. Kapil Kumar AGM 2529344 Regular MCA; Over 25 yrs 10.02.1997 49 Nil Nil No
7 Smt. Amardeep Kaur DGM 2334448 Regular BE(Electronics); Over 28 yrs 05.10.1993 53 Nil Nil No
8 Smt. Geeta Sr. Manager 2126046 Regular DIP(ECE); Over 36 yrs 07.12.1985 55 Nil Nil No
9 Sh. Madhur Bain Singh Sr. Manage 2104733 Regular MA (Geography) PGDCA CS; Over 24 yrs 01.10.2004 51 Global Knitfab Limited Nil No
10 Sh. Sanjay Garg DGM 2024707 Regular MSc(Physics); Over 33 yrs 23.09.1991 56 'The Oriental Apparatus Workshops'. Nil No

*Includes Leave Encashment & LTA availed by the employees as per service rules ofthe company.

There are no such employees who have been paid annual remuneration of Rs. 102.00 lacsor above and a monthly remuneration of Rs. 8.50 lacs and above in case of employee workedfor less than a year.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year under review as stipulatedunder the Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Regulation 34(2)(e) of Listing Regulations is appended as Annexure2 and is an integral part of this report.

Corporate Governance Report

The Corporate Governance Report for the year under review as stipulated under theSchedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isappended as Annexure 3 and is an integral part of this report.

Secretarial Audit Report

The Board pursuant to the provision of Section 204 of the Companies Act 2013 read withRule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 has appointed M/s S K Sikka & Associates Practicing Company Secretaries havingMembership No.FCS 4241 to conduct Secretarial Audit for the FY 2021-22.

M/s S K Sikka & Associates Practicing Company Secretaries have carried out theSecretarial Audit for the financial year ended March 31 2022 and the Secretarial AuditReport in Form No. MR-3 is annexed herewith this report as Annexure 4 and formspart of the report.

Compliance with applicable Secretarial Standards

The Company has duly complied with all applicable secretarial standards as referredunder Section 118 of Company Act 2013 and as issued by ICSI during the year under review.

Sexual Harassment of Women at Workplace: Internal Committee

In compliance with the provisions of Section 21 read with Rule 14 of the SexualHarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013('Act') and Rules made thereunder the Company has constituted Internal ComplaintsCommittee (ICC). During the year No complaint with allegations of sexual harassment hasfiled with the Company. As a routine three workshop or awareness programme aga inst sexual harassment were carried out during the financial year under report.

Cautionary Statement

Certain statements in the Boards' Report describing the Company's objectivesprojections estimates expectations or predictions may be forward-looking statementswithin the meaning of applicable laws rules and regulations. Actual results might differfrom those expressed or implied. The statements and figures made in this report is basedon the inputs as received from respective divisions of the company.

Important factors that could make a difference to the Company's operations includelabour and material availability prices cyclical demand and pricing in the company'sprincipal markets changes in government regulations tax regimes economic developmentwithin India and other incidental factors. Further the Disinvestment/Sale of Assetsprocess of the Company is also a major factor that could make a difference to theviability of the Company or Company's operations.

The Company is not under any obligation to publicly amend modify or revise any suchforward looking statements on the basis of any subsequent developments information orevents.

Acknowledgement

The Board places on record its gratitude to various State Transmission CorporationsDepartment of Railways PGCIL and other esteemed customers in India and abroad. The Boardalso places on record its gratitude to various banks associated with the companyespecially SBI/Indian Bank (Allahabad Bank) for their interest continuous help andco-operation for smooth functioning of the Company. The Board also places on record itsgratitude to the Punjab Information and Communication Technology Corporation Limited(PICTCL/Punjab Infotech) the Holding Company for its guidance and support.

The Board also places on record its appreciation for continuous support and amicablerelations with various government authorities' viz. Income Tax Department Goods andServices Tax Department Excise and Customs Department PF & Labour Department andMinistry of Corporate Affairs (Registrar of Companies Chandigarh) Securities ExchangeBoard of India BSE etc.

We are thankful for continuous support of our esteemed customers all through & alsocontinuous support of shareholders bankers and stakeholders including the businessassociates as they reposed undoubting faith in the Company.

The Board in particular acknowledges the co-operation of esteemed shareholders fortheir constant support and for the confidence reposed in the Management of the Company.

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