To
The Members,
The Directors have pleasure in presenting Eightieth Annual Report of Nelco Limited
(Company or Nelco) alongwith the Audited Statement of Accounts for the year ended 31st
March 2023.
1. Financial Results
(Rs in lakhs)
Sr. No. Particulars |
Standalone* |
Consolidated |
|
FY2022-23 |
FY2021-22 |
FY2022-23 |
FY2021-22 |
A Continuing Operations |
|
|
|
|
a Revenue from Operations |
19,704 |
14,316 |
31,333 |
26,007 |
b Other Income |
268 |
259 |
257 |
474 |
c Total Income |
19,972 |
14,575 |
31,590 |
26,481 |
d Operating Expenditure |
15,635 |
12,192 |
25,257 |
21,018 |
e Profit before finance cost, tax and depreciation and amortization (PBITDA) |
4,337 |
2,383 |
6,333 |
5,463 |
f Less: Finance Cost |
337 |
219 |
773 |
684 |
g Less: Depreciation/Amortization |
1,065 |
835 |
2,778 |
2,464 |
h Net Profit/(Loss) before tax |
2,935 |
1,329 |
2,782 |
2,315 |
i Current/Deferred Tax Expenses |
847 |
307 |
797 |
707 |
j Net Profit/(Loss) after Tax |
2,088 |
1,022 |
1,985 |
1,608 |
B Discontinuing Operations** (being transferred to Wholly Owned Subsidiary) |
|
|
|
|
k Profit from Discontinuing operations (before tax) |
- |
116 |
- |
- |
l Tax Expenses |
- |
29 |
- |
- |
m Profit after Tax from Discontinuing operations |
- |
87 |
- |
- |
C Profit after tax from Total Operations |
2,088 |
1,109 |
1,985 |
1,608 |
n Add: Other comprehensive income/(expenses) |
(19) |
(56) |
(24) |
(30) |
o Total Comprehensive Income |
2,069 |
1,053 |
1,961 |
1,578 |
** Operations that are being transferred to Nelco Network Products Ltd. (Wholly Owned
Subsidiary) as a part of internal restructuring.
*In the previous year ended March 31, 2022 the Company has received approval from
Department of Telecommunications (DoT) for transfer of VSAT and ISP license held by
subsidiary Company Tatanet Service Limited (TNSL) to Nelco Limited. Upon approval from
DoT, the Composite Scheme of Arrangement and Amalgamation ("Scheme") becomes
effective from appointment date i.e. April 1, 2017. Pursuant to approval, 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 1,
2021; and TNSL merger has been accounted in Nelco Limited (standalone) in accordance with
Appendix C of IND AS 103 "Business Combination" and accordingly, results of all
the previous periods have been restated by including results of the Company from the
beginning of the previous year i.e. April 1, 2020.
2. Dividend
The Directors of your Company recommend for FY 2022-23, a dividend of Rs 2.00/- per
share of Rs 10/- each i.e. 20% (previous year Rs 1.80 per share i.e. 18%) subject to the
approval of the Members at the ensuing AGM. If approved, the total dividend outgo for FY
2022-23 would amount to Rs 456.37 lakhs (previous year Rs 410.73 lakhs).
According to Regulation 43A of the Listing Regulations, the top 1000 listed entities
based on market capitalization, calculated as on 31st March of every financial
year are required to formulate a dividend distribution policy which shall be disclosed on
the website of the listed entity and a web-link shall also be provided in their annual
reports. Accordingly, the Dividend Policy of the Company can be accessed using the
following 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 19,704 Lakhs in FY 2022-23
from Continuing Operations as against Rs 14,316 Lakhs in FY 2021-22. In FY 2022-23 the
Company earned from continued operations, a net profit after tax of Rs 2,088 Lakhs from
its total operations as against profit of Rs 1,022 Lakhs in FY 2021-22. This was due to
increase in service revenue from satellite connectivity services.
In FY 2022-23 there is no revenue from discontinued operations as in the previous year
2021-22 in accordance with approved scheme of internal restructuring, Company has
transferred discontinued business from June 1st 2021 to wholly owned subsidiary
Nelco Network Products Limited. In the year 2021-22, from discontinued operations Company
has earned revenue of Rs 1,419 Lakhs and profit after tax of Rs 87 Lakhs. Profit from
Discontinuing Operations related to FY 2021-22 are calculated considering the direct cost
of those Operations and interest on identifiable loans that are being transferred under
the Scheme. The entire corporate overheads are considered part of Continuing Operations.
3.2. Consolidated
On a Consolidated basis, revenue from Operations was Rs 31,333 Lakhs in FY 2022-23 as
against Rs 26,007 Lakhs in FY 2021-22 i.e. increase by 20% over previous year.
The segment wise performance (Consolidated) from total operations for the year was as
follows:
Based on evaluation of key financial parameters, the Company believes that it operates
in only one reportable segment i.e. Network Systems and accordingly the financial results
are reported as single reportable segment. The Company earned a net profit after tax of Rs
1,985 Lakhs from total operations as against profit of Rs 1,608 Lakhs in FY 2021-22. No
material changes and commitments have occurred after the close of the year under review
till the date of this Report which affect the financial position of the Company.
During the year Telesat and Company have conducted their first in-orbit demonstration
of high-speed broadband connectivity in India with Telesat's Phase 1 Low Earth Orbit (LEO)
satellite. LEO satellites will revolutionise satellite connectivity and bring
transformational capabilities. The Company in partnership with Telesat, plans to serve
existing and new market segments to enable broadband connectivity for low latency
applications with Telesat Lightspeed services. Telesat Lightspeed is an advanced,
enterprise-class satellite network that leverages Telesat's innovative architecture and
global Ka-band priority spectrum rights. Subject to the necessary regulatory clearances,
this will help in addressing the need of the market for fibre-like connectivity in the
remotest parts of the country with high reliability and flexibility of satellite
communication.
During the year Company has entered an agreement with Intelsat Commercial Aviation
(Intelsat) to provide inflight connectivity (IFC) services in Indian airspace. Intelsat is
an operator of one of the world's largest integrated satellite and terrestrial network and
leading provider of IFC. This will enable the IntelsatRss airline partners and flyers to
enjoy end-to-end broadband coverage on domestic and international aircraft flying to or
from an Indian airport, as well as aircraft flying over the Indian airspace. The Company
will be creating a great opportunity through this relationship with Intelsat for further
growth of its Aero IFC services in the country in the coming years.
3.3. Operations
Information in detail has been given in the Management Discussion & Analysis which
forms a part of this report.
4. Reserves
The Board of Directors has decided to retain the entire amount of profit for Financial
Year 2022-23 in the statement of profit and loss.
5. Subsidiary Company
The Company has one wholly owned subsidiary i.e. Nelco Network Products Ltd. (NNPL) as
on 31st March 2023. Pursuant to the Scheme in the PY 2021-22, it has acquired
from the Company two businesses on a going concern basis by way of slump sale. These
businesses are (a) Industrial Security and Surveillance System (ISSS) and (b) sale and
maintenance of VSAT and related equipment. NNPL also holds Inflight & Maritime
Communication (IFMC) licence issued by DOT. There has been no change in business of NNPL
during the year under review. The revenue of NNPL for FY 2022-23 was Rs 11,658 Lakhs and
loss after tax was Rs 113 Lakh and the accumulated reserve and surplus since incorporation
was Rs 3,264 Lakhs.
As required under Section 129(3) of the Companies Act, 2013 (Act), the salient features
of financial statements of NNPL in Form AOC-1 is attached to the financial statements of
the Company.
Further, pursuant to Section 136 of the Act, the financial statements of the Company,
consolidated financial statements along with relevant documents and separate audited
financial statements in respect of subsidiary Company, are available on the website of the
Company https://www.nelco.in/investor-relation/financial.php.
The Policy for determining material 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
During the year under review, there was no change in the composition of the Board.
However, at the Annual General Meeting (AGM) held on 8th July 2022, Members
approved the appointment of Mr. Saurabh Ray and Mr. A.S. Lakshminarayanan as Non-Executive
Directors of the Company liable to retire by rotation.
In accordance with the requirements of the Companies Act 2013 and the Company's
Articles of Association, Mr. Saurabh Ray retires by rotation and is eligible for
re-appointment. Members' approval is being sought at the ensuing AGM for his
re-appointment.
Independent Directors
In terms of Section 149 of the Act, Mr. K. N. Murthy, Dr. Lakshmi Nadkarni and Mr. Ajay
Kumar Pandey are the Independent Directors of the Company.
In terms of Regulation 25(8) of the Listing Regulations, they have confirmed that they
are not aware of any circumstances or situation which exists or may be reasonably
anticipated that could impair or impact their ability to discharge their duties. Based
upon the declarations received from the Independent Directors, the Board of Directors has
confirmed that they meet the criteria of independence as mentioned under section 149(6) of
the Act and Regulation 16(1)(b) of the Listing Regulations and that they are independent
of the management. Further, the Board is of the opinion that the Independent Directors of
the Company possess requisite qualifications, experience (including the proficiency) and
expertise in their respective fields and that they hold highest standards of integrity.
In the opinion of the Board, there has been no change in the circumstances which may
affect their status as Independent Directors of the Company and the Board is satisfied of
the integrity, expertise, and experience (including proficiency in terms of Section 150(1)
of the Act and applicable rules thereunder) of all Independent Directors on the Board.
Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and
Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company
have included their names in the data bank of Independent Directors maintained with the
Indian Institute of Corporate Affairs.
Additional information and brief profile as stipulated under Listing Regulations and
Secretarial Standards-2 on General Meetings with respect to Director seeking
appointment/re-appointment is annexed to the Notice of AGM.
During the year under review, the non-executive directors of the Company had no
pecuniary relationship or transactions with the Company, other than sitting fees and
reimbursement of expenses incurred by them for the purpose of attending meetings of the
Board/Committee of the Company.
Pursuant to Section 203 of the Act, the Key Managerial Personnel of the Company as on
31st March 2023 are:
Mr. P.J. Nath, Managing Director & CEO
Mr. Malav Shah, Chief Financial Officer
Mr. Girish Kirkinde, Company Secretary & Head-Legal
Number of Board meetings
During the year under review, seven Board Meetings were held. For further details,
please refer Report on Corporate Governance, which forms part of this annual report.
Governance Guidelines:
The Company has adopted Governance Guidelines on Board Effectiveness. The said
Guidelines covers aspects related to composition and role of the Board, Chairman and
Directors, Board diversity, definition of independence, Director's term, retirement age
and Committees of the Board. It also includes aspects relating to nomination, appointment,
induction and development of Directors, Director Remuneration, subsidiary oversight, Code
of Conduct, Board Effectiveness Review and mandates of Board Committees.
7. Annual Evaluation of Board Performance and Performance of its Committees and
Individual Directors.
As required under the Act and Listing Regulations, the Board has carried out formal
annual evaluation of the performance of the Board, its Committees and of individual
directors. The performance of the Board was evaluated by the Board after seeking inputs
from all the Directors on the basis of criteria such as the Board composition and
structure, effectiveness of board processes, information and functioning, etc.
The performance of the Committees was evaluated by the board after seeking inputs from
the Committee members on the basis of criteria such as the composition of Committees,
effectiveness of Committee meetings, etc.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by
the Securities and Exchange Board of India on 5th January 2017. In a separate
meeting of Independent Directors, performance of non-Independent Directors, the Board as a
whole and the Chairman of the Company was evaluated, considering the views of Executive
Director and non-Executive Directors. The Board and the NRC reviewed the performance of
individual Directors on the basis of criteria such as the contribution of the individual
Director to the Board and Committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in meetings, etc.
In the Board meeting that followed the meeting of the Independent Directors and meeting
of Nomination and Remuneration Committee, the performance of the Board, its Committees,
and individual Directors was also discussed. Performance evaluation of Independent
Directors was done by the entire Board, excluding the Independent Director being
evaluated.
Based on inputs received from the Board members, it emerged that the Board had a good
mix of competency, experience, qualifications and diversity. Each Board member contributed
in his/her own manner to the collective wisdom of the Board, keeping in mind his/her own
background and experience. There was active participation and adequate time was given for
discussing strategy. Overall, the Board was functioning very well in a cohesive and
interactive manner.
7.1. Committees of the Board
The Committees of the Board focus on certain specific areas and make informed decisions
in line with the delegated authority. The following substantive Committees constituted by
the Board function according to their respective roles and defined scope:
Audit Committee (AC)
Nominations, HR and Remuneration Committee (NRC)
Stakeholders Relationship Committee (SRC)
Risk Management Committee (RMC)
Details of composition, terms of reference and number of meetings held for respective
Committees are given in the Report on Corporate Governance which forms part of the Annual
Report. Further, during the year under review, all recommendations made by the Audit
Committee have been accepted by the Board.
The details of the familiarization programs for Independent Directors are disclosed on
the Company's website and the web link for the same is:
https://www.nelco.in/pdf/Policies/familarization-programme-22-23.pdf
The Company has adopted a Code of Conduct for its Non-Executive Directors including a
code of conduct for Independent Directors which suitably incorporates the duties of
Independent Directors as laid down in the Act. The Company has also adopted the Tata Code
of Conduct for its employees including the Managing and Executive Directors. The above
codes can be accessed on the Company's website at https://www.nelco.in/
investor-relation/corporate-governance.php.
In terms of the Listing Regulations, all Directors and senior management personnel have
affirmed compliance with their respective codes. The Managing Director & CEO has also
confirmed and certified the same, which certification is provided at the end of the Report
on 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 with
Part D of Schedule II to the Listing Regulations, the NRC is responsible for formulating
the criteria for determining qualification, positive attributes and independence of a
Director. The NRC is also responsible for recommending to the Board a policy relating to
the remuneration of the Directors, Key Managerial Personnel and other employees. In line
with this requirement, the Board has adopted the Policy on Board Diversity, which is
reproduced in Annexure-I forming part of this report and Remuneration Policy for
Directors, Key Managerial Personnel and other employees of the Company is available on the
websites of the Company at https://www.nelco.in/pdf/Policies/Remuneration%20
Policy%20for%20Directors,%20KMP%20and%20Other%20employees.pdf.
Salient Features of this policy are as under:-
The philosophy for remuneration of Directors, Key Managerial Personnel
("KMP") and all other employees of Nelco Ltd. ("Company") is based on
the commitment of fostering a culture of leadership with trust. The remuneration policy is
aligned 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 of
committees of which they may be members) and commission within regulatory limits.
Overall remuneration should be reflective of size of the company, complexity of the
sector/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 based
upon the outcome of the evaluation process which is driven by various factors including
attendance and time spent in the Board and committee meetings, individual contributions at
the meetings and contributions made by directors other than in meetings.
The extent of overall remuneration to Managing Director ("MD")/ Executive
Directors("ED")/ KMP/ rest of the employees should be sufficient to attract and
retain talented and qualified individuals suitable for every role.
The remuneration mix for the MD/EDs is as per the contract approved by the
shareholders.
In addition to the basic/fixed salary, the company provides to other KMPs and employees
with certain perquisites, allowances and benefits to enable a certain level of lifestyle
and to offer scope for savings and tax optimization, where possible and also performance
linked bonus.
Remuneration is payable to Director for services rendered in professional capacity and
which NRC is of the opinion that the director possesses requisite qualification for the
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 the Company
(CTC), the Managing Director & CEO has neither received any commission from the
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 Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 (Rules) is provided in Annexure - II (A) forming
part of this Report.
Statement containing particulars of top 10 employees and the employees drawing
remuneration in excess of limits prescribed under Section 197 (12) of the Act read with
Rule 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 the
employees listed in the said Annexure II (B) is related to any Director of the Company. In
terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to
the shareholders excluding the aforesaid Annexure. The said Statement is also open for
inspection at the Registered Office of the Company. Any member interested in obtaining a
copy of the same may write to the Company Secretary.
8. Significant and material Orders passed by the Regulators or Courts or
Tribunal
No significant and materials orders were passed by the Regulators or Courts or
Tribunals impacting the going concern status and your Company's operations in future.
There was no application made or proceeding pending against the Company under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review.
Corporate Governance, Management Discussion & Analysis and Business
Responsibility and Sustainability Report
AsperListingRegulations,theCorporateGovernanceReportwiththeAuditors'CertificatethereonandtheManagement
Discussion and Analysis are attached, which forms part of this Annual Report. Pursuant to
Regulation 34 of the Listing Regulations, the Business Responsibility and Sustainability
Report, initiatives taken from an environmental, social, governance and sustainability
perspective in the prescribed 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 and
transparent manner by adopting highest standards of professionalism, honesty, integrity
and ethical behaviour. In line with the Tata Code of Conduct (TCOC), any actual or
potential violation, howsoever insignificant or perceived as such, would be a matter of
serious concern for the Company. The role of the employees in pointing out such violations
of the TCoC cannot be undermined.
Pursuant to Section 177(9) of the Act and Regulation 4(2)(d)(iv) of the Listing
Regulations, a Whistle-blower Policy and Vigil Mechanism was established for Directors,
employees and stakeholders to report to the Management instances of unethical behaviour,
actual or suspected, fraud or violation of the Company's code of conduct or ethics policy.
The Vigil Mechanism provides a mechanism for employees of the Company to approach the
Chief Ethics Counsellor (CEC)/Chairman of the Audit Committee of the Company for
redressal. The 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, financial,
regulatory and operational. Each of the risks need different approaches for mitigation and
management. Details of various risks faced by the Company are provided in Management
Discussion & Analysis.
9.1. Risk Management Framework and Internal Financial Controls
Risk Management Framework: The Company has established a risk management framework and
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 the focus
on risk identification and mitigation. The Committee is responsible for monitoring and
reviewing the risk management plan and ensuring its effectiveness. The Company's key risks
are discussed with RMC on a half yearly basis.
The Audit Committee and Board have an additional oversight in key strategic and
financial risks and controls. The major risks identified by the businesses and functions
are systematically addressed through mitigating actions on a continuing basis.
The internal Risk Management Committee at the Company level which comprises of the MD
& CEO, CFO, Chief Risk Officer and key business and operations heads, ensures that
existing and future risk exposures of the Company are identified, assessed, quantified,
minimized, managed and appropriately mitigated. The Company's framework of risk management
process provides clear basis for informed decision making at all levels of the
organization on an ongoing basis, having duly evaluated likely risks and their mitigation
plans being controllable and within risk appetite of the Company. There are no elements of
risk, which in the opinion of the Board may impact the existence of the Company.
Internal Financial Control and Systems: The Company has an internal financial control
system, commensurate with the nature of its business, the size and complexity of its
operations and as such the internal financial controls with reference to the Financial
Statements are adequate. The Company has appointed independent Chartered Accountant firm
as Internal Auditors who audits governance, risks management and internal controls and
processes. The Internal Auditors present their findings to the Audit Committee. Testing of
Internal Financials Controls also form a part of internal audit schedule. The scope and
authority of internal audit is defined in Audit Committee Charter adopted by the Company.
As per the Audit Committee Charter adopted by the Board and as per provisions of Section
177 of the Companies Act, 2013 (the Act) one of the responsibilities of the Audit
Committee is to review the effectiveness of the Company's Internal control system,
including Internal Financial Controls. Internal controls have been discussed in detail in
Management Discussion & Analysis in this report. The Company has implemented robust
processes to ensure that all internal financial controls are effectively working. On
review of the internal audit observations and action taken on audit observations, there
are no adverse observations having material impact on financials, commercial implications
or material non-compliances which have not been acted upon. In addition, the statutory
auditors carry out an audit at quarterly intervals and these reports also have not
indicated any adverse findings.
Process Robustness: The Company also carries out business excellence assessments and
process deep dives through external agencies to establish and improve efficiency and
effectiveness of processes in various key functions. The Company assesses the process
maturity 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 external
agencies to establish and improve efficiency and effectiveness of processes in various key
functions. On review of the internal audit observations and action taken on audit
observations, there are no adverse observations having material impact on financials,
commercial implications or material non-compliances which have not been acted upon. In
addition, the statutory auditors carry out an audit at quarterly intervals and these
reports also have not indicative any adverse findings.
10. Sustainability
10.1. Corporate Social Responsibility
Pursuant to section 135 of the Companies Act 2013 read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014 as amended till date, Company is not mandatorily
required to continue to constitute the Corporate Social Responsibility Committee. As the
Company has not earned net profits computed pursuant to Section 198 of the Act, it is not
mandatorily required to spend on CSR activities https://www.nelco.in/pdf/
Policies/CSR%20Policy.pdf
10.2. Safety, Health and Environment
The Company placed utmost importance to establish a safe work environment for its
employees, contractual workforce, suppliers, visitors and partners. Specific focus was
given to determine safety standards on Office Safety, Field Safety, Working at Height
safety & Electrical and Fire Safety. The Company adopts a proactive and responsible
approach to safeguard the welfare of its employees. Communication on health tips, virtual
seminars on health topics, fitness related sessions, Doctors availability in the premise,
Health check-up packages are some of the services available for employees and families.
All hygiene specific guidance in office is ensured. The Company continued its hybrid
model for working during the year, while ensuring that productivity is not compromised.
11. Human Resources
As on 31st March 2023, the Company had employee strength of 93. During the
year under review, 17 employees were recruited, and 10 employees were separated.
Various people related initiatives were undertaken by the Company during the year to
enable organizational growth through people care and development which include:
The Company utilises multiple platforms that encourage open communication amongst
employees and allow them to voice their opinion. Every year Employee Engagement Surveys
are conducted to enable people to voice out their views, concerns and suggestions for
making the workplace better for everyone. Ideas Portal is a platform where employees share
ideas which are further evaluated and translated into actions wherever feasible. Knowledge
sessions, employee welfare and sports activities are conducted from time to time to ensure
continuous learning, team bonding and motivation.
Reward & Recognition (R&R): The company promotes Recognitions at all levels.
Initiatives like Appreciation week, Quarterly awards which includes Individual & Team
awards ensures that employee contributions are acknowledged timely. Nelco Innovista awards
is an internal platform which encourages creativity and rewards participants for their out
of the box thinking and innovative minds.
Capability Development: Company focuses on overall capability building of functional,
managerial and behavioural skills. The Company has been committed towards building the
skill levels of employees through organizing inhouse, residential and virtual workshops
and fulfilling the training requirements through e-learning platforms. Employees were also
encouraged to undergo trainings of their choice available on the eLearning portal, apart
from the training needs identified by their managers. Innovative mindsets are encouraged
through competitions like Tata Innovista and Tata Business Leadership Awards, where
employees showcase creative ideas/actions in business, process or technology.
Performance & Talent Management: Employee performance is monitored and managed
through rigorous processes of Performance Appraisal. Mapping the SMART goals in the online
system ensures that Goals are properly maintained and tracked for improving the people's,
departments' and overall organization's productivity. Continuous performance dialogues are
encouraged between managers and their teams with focus on guiding and training first time
managers through performance coaching. Talent management framework is rolled out for
High-Potential employees which help them to grow in the organization faster.
As a step towards improving the overall organization performance and effectiveness, the
company had initiated Continuous Improvement Projects in association with the Tata Groups
TBExG team. The objective being improvement from the current state by adopting various
tools/ methodologies and by learnings through best practices across Group companies.
Succession Planning: The Company has a well-defined Succession Planning process.
Successors have been identified for critical positions (for N & N-1 level) in the
Company and are being groomed for taking over higher responsibilities in the next 4-5
years through focused interventions.
The company has an instituted Policy on Prevention of Sexual Harassment (POSH), which
seeks to govern the guidelines and grievance redressal procedures as required under Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. As per
policy, a Complaints Redressal Committee/Internal Complaints Committee exists in the
Company with inclusion of an external lady member. POSH related sessions were conducted
for employees and allied resources. No complaints related to POSH have been received
during the year.
12. Credit Rating
During the year CRISIL has assigned ratings for long term and short-term bank
facilities 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 given
in Annexure III forming part of this report.
14. Foreign Exchange Earnings and Outgo.
(Rs in lakhs)
Particulars Standalone |
Year ended 31st March 2023 |
Year ended 31st March 2022 |
Foreign Exchange Earnings |
8,426 |
4,680 |
Foreign Exchange Outflow |
1,489 |
1,434 |
15. Auditors
Members of the Company at the AGM held on 13th August 2020, approved the
appointment of S.R. Batliboi & Associates LLP, Chartered Accountants, (ICAI Firm
Registration No. 101049W /E300004), as the statutory auditors of the Company for a period
of 5 years commencing from the conclusion of the 77th AGM held on 13th
August 2020 until the conclusion of 82nd AGM of the Company to be held in the
year 2025.
16. Auditors' Report
The standalone and the consolidated financial statements of the Company have been
prepared in accordance with applicable Indian Accounting Standards (Ind AS) notified under
Section 133 of the Act. The Statutory Auditor's report does not contain any
qualifications, reservations, adverse remarks or disclaimers. The Notes to the Accounts
referred to in the Auditors' report are self-explanatory and therefore do not call for any
further clarification under section 134(3)(f) of the Act.
During the year under review, neither the statutory auditors nor the secretarial
auditors has reported to the Audit committee, under Section 143 (12) of the Companies Act,
2013, any instances of fraud committed against the Company by its officers or employees,
the details of which would need to be mentioned in the Board's report.
17. Cost Auditor 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 FY
2022-23. A resolution seeking approval of the Members for ratifying the remuneration of Rs
1,25,000 (Rupees One Lakh Twenty-Five thousand) plus GST and reimbursement of
out-of-pocket expenses on actual basis payable to the Cost Auditors for FY23 is provided
in the Notice to the ensuing 80th AGM. As specified by the Central Government
under sub-section (1) of section 148 of the Companies Act, 2013, the Company has
maintained 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 the
Company to carry out the secretarial audit for FY 2022-23. The report of the Secretarial
Auditors for FY 2022-23 is enclosed as Annexure- IV forming part of this Report. The
Secretarial Audit Report contains the observation relating delay in compliance with
Regulation 23(9), 19(1) and 19(2) of SEBI (Listing Obligations and Disclosures
Requirements) Regulations, 2015. The stock exchanges have levied the penalties. The
Company has applied for waiver of penalties by giving justifiable grounds and their
decision is awaited. There has been no other qualification, reservation, adverse remark or
disclaimer given by the Secretarial Auditors in their Report.
The Company has devised proper systems to ensure compliance with the provisions of all
applicable Secretarial Standards issued by the Institute of Company Secretaries of India
and that such systems are adequate and operating effectively.
As per the requirements of the Listing Regulations, Practicing Company Secretaries have
undertaken secretarial audit for FY 2022-23 of Nelco Network Products Ltd., the material
unlisted subsidiary of the Company. As per the Audit Report (Annexure- IV-A) the
subsidiary had complied with the applicable provisions of the Act, Rules, Regulations, and
Guidelines and 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 under
Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014,
is given in Annexure V forming part of this report.
20. Related Party Transactions
In line with the requirements of the Act and the Listing Regulations, the Company has
formulated a Policy on Related Party Transactions and the same is available on the
Company's website: https://www.nelco.in/pdf/Policies/
Related%20Party%20Transaction%20Policy.pdf All related party transactions entered during
the year under review were on an arm's length basis and were in the ordinary course of
business. All transactions with related parties were reviewed and approved by the Audit
Committee. Prior omnibus approval is obtained for related party transactions which are of
repetitive nature and entered in the ordinary course of business and on an arm's length
basis. There were no other materially significant related party transactions made by the
Company with Promoters, Directors, Key Managerial Personnel and Body Corporate(s) which
had a potential conflict with the interest of the Company at large. Accordingly, the
disclosure of these Related Party Transactions as required under Section 134 (3) (h) of
the Act in Form AOC 2 is not applicable for the year under review. The details of the
transactions with related parties are provided in the accompanying Financial Statements.
21. Deposits
The Company has not accepted any deposits from public and as such, no amount on account
of principal or interest on deposits from public was outstanding as on the date of the
Balance Sheet.
22. Annual Return
Pursuant to Section 92 of the Act read with the appliable Rules, the Annual Return for
the year ended 31st March 2023 can be accessed on the Company's website at the
following link: https://www.nelco.in/pdf/disclosure-of-events/
annual-return-2022-23-nelco-ltd.pdf
23. Directors' Responsibility Statement
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, work performed by the internal, statutory, cost
auditors, secretarial auditors and external consultants including the audit of internal
financial controls over financial reporting by the statutory auditors and the reviews
performed by Management and the relevant Board Committees, including the Audit Committee,
the Board believes the Company's internal financial controls were adequate and effective
during the period under review.
Accordingly, pursuant to Section 134(5) of the Companies Act 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that: a) in the preparation
of the annual accounts for the period ended 31st March 2023 the applicable
accounting standards had been followed along with proper explanation relating to material
departures. b) they have, in the selection of the accounting policies, consulted the
Statutory Auditors and have applied them consistently and made judgments and estimates
that are reasonable and prudent to give a true and fair view of the Company for the period
ended 31st March 2023 and of the profit of the Company for that period; c) they
have taken proper and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets
of the Company and for preventing and detecting fraud and other irregularities. d) they
have prepared the accounts for the period under review on a going concern basis. e) they
have laid down internal financial controls to be followed by the Company and that such
internal financial controls are adequate and were operating effectively. f) they have
devised proper systems to ensure compliance with the provisions of all applicable laws and
that such systems were adequate and operating effectively.
24. Acknowledgment
The Board of Directors thank the Company's shareholders, customers, vendors, business
partners, bankers and financial institutions for their continuous support.
The Directors also thank the Government of India, Dept. of Telecommunications, Dept. of
Space, various Ministries, Regulatory Authorities, and their departments for co-operation.
We appreciate and value the contributions made by all our employees.
On behalf of the Board of Directors
A.S. Lakshminarayanan
Chairman Navi Mumbai, 24th April 2023
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