NELCO Ltd Directors Report

To

The Members,

The Directors have pleasure in presenting Eighty First Annual Report of Nelco Limited (Company or Nelco) alongwith the Audited Statement of Accounts for the year ended 31^st March 2024.

1. Financial Results

(Rs. in lakhs)

No. Particulars	Standalone		Consolidated
	FY2023-24	FY2022-23	FY2023-24	FY2022-23
a Revenue from operations	22,268	19,704	32,030	31,333
b Other income	236	268	236	257
c Total income	22,504	19,972	32,266	31,590
d Operating expenditure	17,947	15,635	26,091	25,257
e Profit before finance cost, depreciation & amortisation and share of profit from associate and tax (PBITDA)	4,557	4,337	6,175	6,333
f Less: Finance cost	249	337	657	773
g Less: Depreciation & amortization	1,284	1,065	2,214	2,778
h Total finance cost and depreciation & amortisation (f+g)	1,533	1,402	2,871	3,551
i Profit before share of profit from associate and tax (e-h)	3,024	2,935	3,304	2,782
j Share of profit from associate	-	-	47	-
k Net profit before tax (i+j)	3,024	2,935	3,351	2,782
l Current / deferred tax expenses	897	847	984	797
m Net profit after tax (k-l)	2,127	2,088	2,367	1,985
n Add: Other comprehensive income/(expenses) (net of tax)	(10)	(19)	(8)	(24)
o Total Comprehensive Income (m+n)	2,117	2,069	2,359	1,961

2. Dividend

The Directors of your Company recommend for FY 2023-24, a dividend of 2.20/- per share of 10/- each i.e. 22% (previous year 2.00 per share i.e. 20%) subject to the approval of the Members at the ensuing AGM. If approved, the total dividend outgo for FY 2023-24 would amount to 502.00 lakhs (previous year 456.37 lakhs).

According to Regulation 43A of the Listing Regulations, the top 1000 listed entities based on market capitalization, calculated as on 31^st 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 Companys affairs

3.1. Standalone

On a Standalone basis, your Company achieved revenue of Rs. 22,268 Lakhs in FY 2023-24 from Operations as against Rs. 19,704 Lakhs in FY 2022-23 i.e. increased by 13% over previous year.

In FY 2023-24 the Company earned net profit after tax of Rs. 2,127 Lakhs from the Operations as against net profit after tax of Rs. 2,088 Lakhs in FY 2022-23. This was due to increase in service revenue and improved margins.

3.2. Consolidated

On a Consolidated basis, revenue from Operations was Rs. 32,030 Lakhs in FY 2023-24 as against Rs. 31,333 Lakhs in FY 2022-23 i.e. increase by 2.22% over previous year.

The segment wise performance (Consolidated) from 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. 2,367 Lakhs from Operations as against net profit after tax of 1,985 Lakhs in FY 2022-23 i.e. increased by 19% . 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.

The Company has strengthened its overall position in the market with a higher share of the incremental business in Enterprise, Government and IFMC segments.

The Company continuously evaluates opportunities for investment and augmentation of its technology, satellite network capabilities and ground infrastructure, developing new products and services for enabling ubiquitous, reliable, secure, and high-quality connectivity through Satcom services. Towards this objective, the Company has invested in Piscis Networks Pvt. Ltd., an original equipment manufacturer for SDWAN technology. Also, during the year, the satellite bandwidth capacity has grown by around 23% over the total capacity available in the previous year. Additionally, the Company has made an advance booking for large satellite capacity on a High-Throughput Satellite, which will be operationalized in FY25. This will enable the Company to serve newer segments and use-cases with its Satcom services.

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 2023-24 in the statement of profit and loss.

5. Subsidiary & Associate Company

5.1. The Company has a wholly owned subsidiary - Nelco Network Products Ltd. (NNPL) and an associate company - Piscis Networks Pvt. Ltd. (PISCIS) as on 31^st March 2024.

Subsidiary Company

The revenue of NNPL for FY 2023-24 was Rs. 9,989 Lakhs (previous year Rs. 11,658 Lakhs) and profit after tax was Rs. 222 Lakhs (previous year loss after tax was Rs. 113 Lakhs) and the accumulated reserve and surplus since incorporation was Rs. 3,488 Lakhs.

Associate Company

During the year 2023-24 Company has acquired 31.72% of equity stake in PISCIS. The revenue of PISCIS for FY 2023-24 was Rs. 809 Lakhs (previous year Rs. 100 Lakhs) and profit after tax was Rs. 233 Lakhs (previous year loss after tax was Rs. 43 Lakhs). This was due to increase in sale of number of SDWAN routers and corresponding recurring service revenue therefrom. The Companys share of profit in associate for FY 2023-24 was Rs. 47 Lakhs (previous year Nil).

As required under Section 129(3) of the Companies Act, 2013 (Act), a report on the financial performance of NNPL & PISCIS 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. In accordance with the requirements of the Companies Act 2013 and the Companys Articles of Association, Mr. A.S. Lakshminarayanan retires by rotation and is eligible for re-appointment. Members approval is being sought at the ensuing AGM for his re-appointment.

Further, on the recommendation of the Nominations, HR & Remuneration Committee, the Board of Directors of the Company approved the reappointment of Mr. P. J. Nath as Managing Director & CEO for a period from 13^th June 2024 to 28^th February 2027. The reappointment as also the terms thereof (including remuneration) has been placed for approval of the Members at the ensuing AGM of the Company scheduled to be held on 25^th June 2024.

Independent Directors

In terms of Section 149 of the Act, Mr. K. Narasimha 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 Directors seeking appointment/reappointment 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 31^st March 2024 are:

• Mr. PJ. Nath, Managing Director & CEO

• Mr. Malav Shah, Chief Financial Officer

• Mr. Girish Kirkinde, Company Secretary & Head-Legal

Mr. Girish V. Kirkinde, Company Secretary & Head- Legal will be superannuated from the services of the Company on 30^th April 2024. On the recommendation of Nominations and Remuneration Committee, the Board approved the appointment of Mr. Ritesh N. Kamdar as Company Secretary & Head-Legal and Key Managerial Personnel effective from 14^th May 2024.

Number of Board meetings

During the year under review, six Board Meetings were held. For further details, please refer Report on Corporate Governance.

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, Directors 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 5^th 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 Managing Director & CEO 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 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 Companys website and the web link for the same is: https://www.nelco.in/pdf/Policies/familarization-programme-23-24.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 Companys 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 CEO & Managing Director 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 Policv%20for%20Directors.%20KMP%20and%20Qther%20emplovees.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/ companys operations and the companys 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) are 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 are 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, this 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 material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and your Companys 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 (BRSR)

As per Listing Regulations, the Corporate Governance Report with the Secretarial Auditors Certificate thereon and the Management Discussion and Analysis are attached, which forms part of this Annual Report.

Pursuant to Regulation 34 of the Listing Regulations, the BRSR, 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 Companys 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 Companys 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 Companys 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 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 Companys 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, risk 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 Companys 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 indicated any adverse findings.

10. Sustainability

10.1. Corporate Social Responsibility

Owing to the losses as per the calculation of net profit under Section 198 of the Act, the Company was not required to spend any amount statutorily towards CSR activities. However, the Company actively participates in Volunteering activities organised under Tata Volunteering Week and Pro-engage. In FY24, Nelco registered 500+ hours of volunteering through various CSR initiatives in different cities of India. The Company catered to around 800 beneficiaries from different NGOs across India.

The Company has also engaged in sponsoring 2 NGOs :

a) for Skill enablement of Youths - sponsoring 10 Youths who are being familiarized with skills for their future growth,

b) Sponsoring for Mid-day meal of approx. 200 children.

The disclosures as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 are set out in Annexure VI of this report

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. Employees are encouraged to report observations & Incidences on the Online Safety reporting portal for taking preventive & corrective measures.

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. Employees have been covered under the Group Term Life policy in the year and this is a step towards employee care & well-being.

All hygiene specific guidance in office are ensured. The Company continued the hybrid model for working during the year while ensuring productivity is not compromised.

11. Human Resources

As on 31^st March 2024, the Company had an employee strength of 94. During the year under review, 12 employees were recruited and 12 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:

• Engagement & Empowerment: 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. People are encouraged to participate in the Companys Improvement projects where they get an opportunity to ideate and provide solutions to existing problems and thus, support the Company in making improvements and achieving its objectives.

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. Recently, the R&R categories (including Innovation Awards) were revamped to make the process more inclusive and effective.

Capability Development: Company focuses on overall capability building of functional, managerial and behavioural skills during the Annual Strategic planning exercise and Performance management process. 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. The Company engaged into competency mapping exercise to build a robust framework of necessary skills and knowledges in order to grow and stay competitive in the market.

Nelco focuses on fostering a culture of innovation. Innovative mindsets are encouraged through competitions like Tata Innovista, where employees showcase creative ideas/actions in business, process or technology. In order to bring more vigour and encourage innovation, the company revamped the Recognition policy by adding more category of awards to the Innovation category.

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 peoples, departments and overall organizations productivity. Continuous performance dialogues are encouraged between managers and their teams with focus on guiding and training first time managers through performance coaching. The employees receive their performance rating at the end of the Annual Appraisal process which is instrumental in deciding their progress in the organization. The Performance linked pay encourages employees to perform to their best capabilities for getting higher rewards. Talent management framework is rolled out for High-Potential employees which help them to grow in the organization faster.

The Company organises best practices session in association with the Tata Groups TBExG team, as part of their Continuous improvement Projects. The sessions help us in gaining additional knowledge on the various processes taken up in our Improvement Projects and implementing them. 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 3-4 years through focused interventions.

The Company is strongly focused on Digitalization and Data excellence. Digitalization as a separate function focuses on implementing technology driven processes and systems to streamline operations and thus improve overall organization efficiency. The company has organised workshops / best practice session on data excellence to bring rigour to the data management in the company. Reverse digital mentoring sessions are organised by the company in order to spread the knowledge and help the employees in implementing these applications for bringing more efficiency in their work. This also promotes youngsters to show their technical capabilities.

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 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 2024	Year ended 31st March 2023
Foreign Exchange Earnings	9,557	8,426
Foreign Exchange Outflow	1,495	1,489

15. Auditors

Members of the Company at the AGM held on 13^th 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 77^th AGM held on 13^th 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 Auditors 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 Boards 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 2023-24. A resolution seeking approval of the Members for ratifying the remuneration of 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 FY24 is provided in the Notice to the ensuing 81^st 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 2023-24. The report of the Secretarial Auditors for FY 2023-24 is enclosed as Annexure- IV forming part of this Report. There has been no qualification, reservation or adverse remarks in the Report of the Secretarial Auditors.

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 2023-24 of Nelco Network Products Ltd., the material unlisted subsidiary of the Company. As per the Audit Report (Annexure- IV-A) the said 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 Companys website: https://www.nelco.in/pdf/Policies/ Related%20Partv%20Transaction%20Policv.pdf

All related party transactions entered during the year under review were on an arms 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 arms 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 Finacial Statement.

22. Annual Return

Pursuant to Section 92 of the Act read with the appliable Rules, the Annual Return for the year ended 31^st March 2024 can be accessed on the Companys website at the following link: https://www.nelco.in/investor-relation/disclosures- under-regulation46-of-the-sebi-lodr/annual-return.php

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 agencies 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 is of the opinion that the Companys 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 year ended 31^st March 2024 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 31^st March 2024 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 annul accounts 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. General

During the year under review, there has been no change in the nature of business of the Company. Further, there has been no details, which shall be required to be given as regard to difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, as no such events have occurred.

25 Acknowledgment

The Board of Directors thank the Companys 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
Mumbai, 23rd April 2024	(DIN: 08616830)