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EQUITY - MARKET SCREENER

Railtel Corporation of India Ltd
Industry :  Telecommunications - Service Provider
BSE Code
ISIN Demat
Book Value()
543265
INE0DD101019
45.2569208
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
RAILTEL
16.86
3056.94
EPS(TTM)
Face Value()
Div & Yield %
5.65
10
2.31
 

As on: May 25, 2022 12:03 PM

Dear Shareholders,

Your Company's Directors are pleased to present 21st Annual Report of the Company, along with Audited Accounts, for the Financial Year ended 31st March, 2021, prepared in accordance with the provisions of the Companies Act, 2013 read with rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

1. Company Overview

RailTel Corporation of India Limited is one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fiber network on exclusive Right of Way (ROW) along Railway track. The biggest USP of RailTel is its ownership of a Pan- India 60000+ RKM of Optic fiber network which covers all important towns & cities of the country and several rural areas covering 70% of India's population. RailTel with strong nationwide presence is committed to bring cutting edge technology and offer innovative services to the Indian Telecom market. With its Pan India high- capacity network, RailTel is working towards creating a knowledge society at various fronts.

Equipped with ISO-9001-2008, ISO-27001:2005 and ISO 20000-1:2011 certification, RailTel offers a wide gamut of managed telecom services to Indian Telecom market. The service includes RailTel e-office, Managed lease lines, Tower collocation, MPLS based IP-VPN, Internet, Data Center services, HD Video Conferencing Services, NGN based voice carriage services to Telecom Operators, Services to Internet Service Providers, MSOs, Enterprises, Banks, Government Institution/Departments, Educational Institutions/Universities, PSUs etc.

RailTel being a "Mini Ratna (Category-I)" PSU is steaming ahead in the enterprise segment with the launch of various services coupled with capacity augmentation in its Core network. Your company stands as the only telecom PSU, which is a 100% debt free company and consistently profit-making PSU in telecom sector.

2. Financial Performance

During the year, your Company has achieved total consolidated turnover of Rs. 1411 crore. The Company has observed an increase of 23.75 % in its revenue from operations which comes out to be Rs. 1337 Crore on standalone basis. The total turnover of the Company during the year is Rs. 1366 Crore comprising of other income of Rs. 29 Crore. The summarized financial results of your Company are shown in Table-1.

3. IPO and Listing of Shares

The Government of India announced the disinvestment of Company's equity shares through an Offer for Sale by the President of India acting through Ministry of Railways. Accordingly, Department of Investment and Public Asset Management (DIPAM), Ministry of Finance had appointed M/s. ICICI Securities Limited, M/s. SBI Capital Markets Limited and M/s. IDBI Capital Markets & Securities Limited as Book Running Lead Managers ("BRLMs") and M/s. Crawford Bayley & Co., Squire Patton Boggs Singapore LLP as Domestic and International Legal Advisors respectively for carrying out the process of disinvestment of 8,71,53,369 equity shares i.e. 27.16% of the paid up equity share capital of the Company through Initial Public Offering ("IPO").

The public issue was opened for subscription on 16th February, 2021 and closed on 18th February, 2021 at an offer price of Rs. 94/- per equity Share (including a share premium of Rs. 84/- per equity Share).

The Company's public issue received an overwhelming response from all the categories of Investors and was subscribed 42.39 times. The Company's shares were admitted into both the depositories i.e. National Securities Depository Limited ("NSDL") and Central Depository Services (India) Limited ("CDSL") and are traded under International Securities Identification Number ("ISIN") -INE0DD101019. The equity shares

of the Company got listed on 26th February, 2021 on National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE"). The Scrip Code for equity shares of RailTel assigned by BSE is 543265 and Scrip Symbol assigned by NSE is RAILTEL.

The proceeds of the issue amounting of Rs. 819.24 Crores were credited to the account of Government of India, PAO, DIPAM. Listing of equity shares has made the Company more recognizable and has enhanced the brand image of RailTel.

Table-1: Financial Performance of Company

(In Rs.. Crore)

Particulars Year ended 31/03/2021 Yearended 31/03/2020 Year ended 31/03/2021 Year ended 31/03/2020
Consolidated Standalone
Total Revenue 1411 1166 1366 1112
- Revenue from Operations 1378 1128 1337 1081
- Other Income 33 38 29 31
Expenditure 1055 801 1012 751
Gross Margin 356 365 354 361
Depreciation 159 131 159 131
Profit Before Interest, Tax & Exceptional items 197 234 195 230
Interest Nil Nil Nil Nil
Exceptional Items Nil 49 Nil 49
Tax/ Others 55 44 55 43
Profit for the Year 142 141 140 138
Basic EPS (In Rs.) 4.44 4.40 4.37 4.31

4. Share Capital

There is no change in the capital structure of the Company during the period under review and from the end of the FY till the date of this report.

Accordingly, Issued, Subscribed and Paid-up Share Capital is Rs. 320.94 crore divided into 32.09 crore Equity Shares of Rs. 10 each as on 31st March, 2021 including Rs. 305.94 crore issued for consideration other than cash.

In the beginning of the year, the entire equity share capital of Rs. 320.94 Crores was held by President of India and its nominees.

Due to the disinvestment announced by Govt. of India, as mentioned in the Point-3 above, 8,71,53,369 nos. of equity shares were offered for sale through an IPO. Subsequent to the IPO, the President of India and its Nominees held 23,37,85,038 equity shares. As on 31st March, 2021, the President of India and its Nominees acting through Ministry of Railways, Government of India holds 23,37,85,038 equity shares i.e. 72.84% of the paid up equity share capital of the Company.

The details of dematerialization of shares, Demat Suspense Account/Unclaimed Suspense Account is provided in the Corporate Governance Report as annexed to this report.

5. Dividend

Your Company has a consistent track-record of dividend payment. The Board of Directors of your Company had earlier approved payment of an Interim Dividend of Rs. 1 per share amounting to Rs. 32.09 Crore for the FY 2020-21. Further, the Board has recommended payment of final dividend of Rs. 1.20 per share amounting to Rs. 38.51 Crore for the FY 2020-21. The total dividend payment for the FY 2020-21 would be Rs. 70.60 crore as compared to Rs. 68.06 Crore paid for the FY 2019-20.

In terms of Regulation 43A of SEBI (LODR) Regulations, 2015 and the guidelines on "Capital Restructuring of Central Public Enterprises" issued by the DIPAM, the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy. The said Policy is annexed to this report at Page No. 60 and is also available on the Company's website i.e. www.railtelindia.com

6. Railways Revenue Share

The Company is also contributing by way of revenue share @ 7 % on services to Indian Railways and the total share of such contribution comes to Rs. 30.68 crore as against such share of Rs. 31.81 crore in the preceding year. The cumulative revenue share to Railways amounting to Rs. 299 crore till this year.

Besides, the Company has also paid license fee @ 8% (at present) to DoT, Govt. of India on its income from telecom business carried by it under licenses granted to it.

7. Reserves

The Company appropriated its profit earned during the year under review. It has transferred Rs. 40 Crore to the General Reserves during the year. The total reserves & surplus at the end of the FY 2020-21 is Rs. 1082 Crore (on Standalone basis).

8. Capital Expenditure

During the year, Capital expenditure of Rs. 98 Crore approx was incurred mainly on NBCC Building, OFC related assets, Telecom & Radio equipment's etc. The Company made commitments to the tune of Rs. 73.19 Crore on capital account and accordingly, expenditure would be booked during the current financial year, in addition to the capital expenditure allocated for FY 2020-21.

9. Declaration from Independent Directors

RailTel has received a declaration from its Independent Directors stating that they have met the criteria of independence under Section 149(6) of the Companies Act, 2013 and the SEBI (LODR) Regulations and are not disqualified from continuing as Independent Directors. During the year, there has been no appointment or extension of an Independent Director for a term exceeding 5 (Five) years as per Section 149(10) of the Companies Act, 2013.

10. Number of Meetings of Board

The Board met Ten (10) times for transacting the business of the Company during the FY 2020-21 i.e. on 07/08/2020, 28/08/2020, 26/09/2020, 28/09/2020, 29/10/2020, 22/12/2020, 13/01/2021, 09/02/2021, 19/02/2021 and 22/03/2021. The particulars of the meetings held and attended by Directors are detailed in the Corporate Governance Report as annexed to this report.

11. Retirement of Directors by Rotation

In terms of the Companies Act, 2013, the provisions with respect to retirement of Directors by rotation will not be applicable to the Independent Directors of the Company. In view of this, no Independent Director is being considered to be retired by rotation. The part-time Govt. nominee directors were considered as directors not liable to retire by rotation but other directors (i.e. functional directors) will be retiring by rotation. Accordingly, Shri Ashutosh Vasant (Director) is liable to retire by rotation and being eligible, offers himself for reappointment.

12. Remuneration to Directors

RailTel, being a Government Company under the provisions of the Companies Act, 2013, the Directors of the Company are appointed by the President of India acting through Ministry of Railways, Government of India. The functional Directors are appointed by the Government of India who draw remunerations under Industrial Dearness Allowance (IDA) pattern of pay scale except in case of CMD who is on deputation to RailTel from Ministry of Railways and is drawing Central Dearness Allowance (CDA) pay scales as predetermined by the Government and as per the terms and conditions of their appointment issued by the Government of India from time to time.

The Part time Government Nominee Directors on the Beard of the Company do not draw any remuneration from the Company.The Part-time non-official Directors/ Independent Directors are paid a sitting fee of Rs. 20,000/- per meeting for attending meetings of Board or Committees thereof, besides cost of travel and lodging in case of outstation Directors.

13. Policy on Performance Evaluation of Directors

RailTel is a Government Company under the administrative control of Ministry of Railways. The functional directors including Chairman and Managing Director (CMD) are selected on the recommendations of Public Enterprises Selection Board (PESB) in accordance with the procedure and guidelines laid down by Government of India.

The Company enters into Memorandum of Understanding (MoU) with the Administrative Ministry, i.e., Ministry of Railways, Government of India every year, containing key performance parameters for the company. The performance of the Company is evaluated by Department of Public Enterprise vis-a-vis MoU entered into with the Ministry of Railways, Government of India.

The evaluation of performance of Functional Directors includes self-evaluation by the respective functional directors and subsequent assessment by CMD with final evaluation by the Ministry of Railways (the administrative Ministry).

The performance evaluation of CMD includes selfevaluation and final evaluation by the Ministry of Railways.

In respect of Part-time Government nominee directors, their evaluation is done by the Ministry of Railways as per the procedure laid down. Since, Independent Directors are appointed by the administrative Ministry, their evaluation is also done by the Ministry of Railways and Department of Public Enterprises.

Ministry of Corporate Affairs (MCA) vide its circular dated June 5, 2015 had exempted Government Companies from the provisions of section 178(2) of the Companies Act, 2013, which requires performance evaluation of every director by the Nomination & Remuneration Committee. The circular further exempted Government Companies from the provisions of Section 134 (3) (p) of Companies Act 2013, if directors are evaluated by the Ministry which is administratively in-charge of the Company as per its own evaluation methodology.

Further, Ministry of Corporate Affairs vide its notification dated 5th July, 2017 has exempted the provisions relating to review of performance of Chairperson and nonindependent directors and the Board as a whole and evaluation mechanism, prescribed in Schedule IV of the Companies Act, 2013, for Government Companies.

14. Committees of the Board

As on March 31, 2021, the Board had five committees namely the Audit Committee, the Nomination & Remuneration Committee, the Corporate Social Responsibilities Committee, the Stakeholders Relationship Committee and the Risk Management Committee. The detailed note on the composition of the Board and its committees are provided in the Corporate Governance Report section of this Annual Report and the details of the Committees of the Board is also available on the website of the Company i.e www.railtelindia.com

15. Subsidiary

Your Company has a wholly owned subsidiary by the name of "RailTel Enterprises Limited" (REL) incorporated on 12th August, 2014 under the provisions of the Companies Act, 2013.

The authorised share capital of REL is Rs. 50 Crore and paid up share capital is Rs. 10 Crore. The entire equity share capital of REL is held by RailTel itself through its nominees. The affairs of the Company are managed, controlled and supervised by three Directors nominated by RailTel's Board.

During the year under review, no company has become or ceased to be subsidiary/ joint venture/ associate Company of RailTel.

The consolidated Financial Statements of the Company duly audited by the Statutory Auditors are presented in the Annual Report.

A report on performance and financial position of the subsidiary is presented in a separate section of this Annual Report. Please refer Form AOC-1 annexed to the consolidated Financial Statements in the Annual Report.

16. Projects Undertaken

The details of the projects undertaken during the year are included in Management Discussion & Analysis Report forming part of this Annual Report.

17. Procurement from Micro and Small Enterprises

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSE) Order 2012. In terms of said policy and issued guidelines, a mandatory procurement of a minimum of 25% of total annual procurement is required from Micro and Small Enterprise's. Out of 25% target of annual procurement from MSE's, sub targets of 4% from MSEs owned by Schedule Caste or Scheduled Tribe Entrepreneurs and 3% from MSEs owned by Women Entrepreneurs are also earmarked for procurement.

The achievement of procurement target from MSEs (25% including a sub-target of 4% from MSEs owned by SC/ ST entrepreneurs) during the financial year 2020-21 in compliance to the aforementioned Public Procurement Policy is shown in Table-2.

Table-2

Sl. No. Particulars 2020-21 (Rs. in Cr.)
1 Total annual procurement (in value) 736.31
2 Total value of procurement from MSEs 287.08
3 % age of procurement from MSEs (including SC/ST and women) 38.99%
4 Total value of procurement from only MSEs owned by SC/ST entrepreneurs 1.45
5 % age of procurement from MSEs owned by SC/ST entrepreneurs w.r.t. procurement through MSEs 0.50%
6 Total value of procurement from only MSEs owned by Women entrepreneurs 11.50
7 % age of procurement from MSEs owned by Women entrepreneurs w.r.t. procurement through MSEs 4.01%

18. Right to Information Act, 2005

The Right to Information Act, 2005 seeks to provide for setting out the practical regime of Right to Information for citizens to secure access to information under the control of Public Authorities in order to promote transparency and accountability in the working of every Public Authority. RailTel being a responsible Public Sector Undertaking has complied with the provisions of the Right to Information Act, 2005 and designated CPIO/ APIO and Appellate Authority as required under the provisions of the RTI Act, 2005. The details of RTI dealt during the year is shown in Table-3.

Table-3

No. of RTI cases pending as on 01/04/2020 6
Received during the Year 179
Disposed off during the year 165
Pending as on 31/03/2021 20

19. Business Responsibility Report

In compliance with the requirement of Clause (f) of sub-regulation (2) of regulation 34 of the SEBI (LODR) Regulations, 2015, the Business Responsibility Report (BRR) disclosures are integrated into the Annual report and aimed at describing RailTel initiatives in discharging responsibilities from an environmental, social and governance perspective in the specified format. The BRR is presented in separate section forming part of this Annual Report.

20. Particulars of Loans, Guarantees or Investments

During the year, RailTel has not given any loan or guarantees covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

The detail of investments made by the Company is given in the notes to the Financial Statements.

21. Internal Controls Systems and their adequacy

The Company has an internal control system in commensuration with size, scale and complexity of its operations.

During the year, the Company has engaged Internal Auditors to carry out Internal Audit of the Company. The highlights of internal audit report and their synopsis were placed before the Audit Committee for its review.

Further, RailTel has implemented ORACLE ERP solution with name "Project Parivartan" and all modules like Projects, Procurement, Operations, Maintenance, Finance, HR, Sales and Marketing are live from December 2013. Implementation of "Project Parivartan" has empowered all employees to focus on their core competencies, making work environment stress free, at the same time ensuring transparency and decision making in the system. During year 202021, RailTel's IT team continuously worked towards strengthen of core processes of these implemented modules so that users could effectively and efficiently use ERP for day to day work. New ERP Modules like EMD Application, Asset tagging for CO, payment integration with Bank, Dark Fiber Billing Application, Last Mile Provisioning through implementation target Application, Digital Signatures & IRN Invoicing, Balance Sheet Automation, E-Invoice for Railwire have been developed during FY 2020-21 apart from regular O&M and enhancements works including development of new reports.

Further, as per management and business requirement, during FY 2021-22 ERP team shall be working for development of new applications like Web Start Application, Vendor Bill tracking Application Dashboard application for Mobile for higher management, Dark Fiber Billing Application, Last Mile Provisioning through implementation target Application.

RailTel has fully implemented the NIC e-Office system in its working by replacing the manual files with Digital Files. The e-office workings have enhanced the transparency as files can be tracked, and their status is known to all at all times. This has fastened the decisionmaking process and strengthen the Internal Control System. E-Office working ensures data security and data integrity at all the times. This has proven to be boon in a crisis time and enabled employees to WORK FROM HOME, which would have been impossible in case of manual filing system.

22. Annual Return

The Annual Return of the Company as on March 31, 2021 is available on the Company's website and can be accessed at https://www.railtelindia.com/profile-4/ annual-report-review-and-annual-return.html

23. Management's Discussion and Analysis Report

In compliance with the requirement of Regulation 34(2)(e) of the SEBI (LODR) Regulations, 2015, the Management's Discussion and Analysis Report for the year under review is presented in separate section forming part of this Annual Report.

24. Human Resource Development.

The Human Resource Development (HRD) function in the organization has been designed to maximize employee performance. HRD is primarily concerned with the management of people within organization and focusing on policies and systems. RailTel firmly believes in the strength of its most vital asset i.e. Human Resource. RailTel cares and values for its human resource which is the bedrock of success story. To keep the employees' morale high, your Company extends several welfare benefits to them and their families by way of implementing various new and revised welfare policies for its employees. RailTel has also organized free COVID vaccination camps at its Corporate/Regional Offices for the benefit of its employees including outsourced/contractual staff and their eligible family members.

As on 31st March, 2021, the Company had total manpower strength of 700 employees including regular, deputationist, contractual and consultants. The details are shown in Table-4. During the year, Company has also availed the services of 1511 outsourced employees.

Table-4

Category No. of Employees for the year ended 31.03.2020 No. of Employees for the year ended 31.03.2021
Regular Employees 468 461
Deputationist 47 52
On Contract 175 169
Consultants 31 18

The percentage of women employees, SC/ST/OBC employees, persons with disabilities and ex-servicemen out of regular employees of the Company is Shown in Table-5.

Table-5

Category No. of Employees for the year ended 31.03.2020 No. of Employees for the year ended 31.03.2021 % of total no. of regular employees during financial year ended 31.03.2021 No. of recruitment made in these categories*
Women Employees 45 46 9.9 0
SC Personnel 63 64 14,2 0
ST Personnel 18 18 4,0 0
Other Backward Classes 119 119 26.3 0
Persons with Disabilities 7 7 1.5 0
Ex-Serviceman 1 1 0,2 0

* Employees who join on absorption basis are regular employees but not part of recruitment data.

The Company has been following the Govt. Guidelines regarding reservation for SCs, STs, OBCs, Persons with disabilities (Pwds) and ex-servicemen.

25. Particulars of Employees

As per provisions of section 197(12) of the Companies Act, 2013 read with the Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every Company is required to give a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules, in the Annual Report of the Company,

However, as per notification dated June 05, 2015 issued by the Ministry of Corporate Affairs, Government of India, Government Companies are exempted from complying with provisions of section 197 of the Companies Act, 2013.

Your Company is a Government Company, therefore, such particulars have not been included as part of the Board's report.

26. Rajbhasha (Official Language)

For effective implementation of official language in RailTel, guidelines of Directorate of Official Language, Ministry of Railways and Department of Official Language, Ministry of Home Affairs are followed. The company has an Official Language Implementation Committee at the corporate level which, through regular quarterly meetings, reviews the use of the official language being carried out in the office functioning in the Corporate Office and Regional Offices. All officers/employees are encouraged to do their work in Hindi using easy vocabulary. All computers / laptops available in the office have Unicode facility.

The company has been regularly attending the quarterly meetings of the Official Language Implementation Committee of the Railway Board and quarterly progress reports are sent regularly to the Railway Board, The company is also a member ofthe Town Official Language Implementation Committee (Upkram-1), New Delhi and Hindi progress report is sent regularly to the Committee and also participates in the periodical meetings of the Committee. The Company was also inspected by the Second Sub-Committee of the Parliamentary Committee on Official Language in August, 2020 to review of the use of Hindi and the company is following the directions given by the Committee.

Like every year, this year also on the occasion of Hindi Day, Hindi Pakhwada was celebrated in RailTel from September 10, 2020 to September 24, 2020 and various activities / programs were organized during the fortnight, the brief description of which is as follows: -

On 10.09.2020, a banner related to the organization of Hindi Fortnight was put up at the main entrance of RailTel's Corporate Office, East Kidwai Nagar, New Delhi. The first two days of the fortnight, i.e on 10th and 11*^ September 2020, A campaign was launched to ensure that the Corporate Office and in all Regional and Territory Offices the Name Boards / Information Boards, Name / Designations Plates, Seals, etc., subject on all registers, templates and prescribed forms should be in Hindi-English bilingual form, the name, designation and signature in the attendance register should be in Hindi and at least the forwarding letter of the tender seeking draft, quotation must be in Hindi.

The following programs were organized in the remaining days of Pakhwada: -

Essay writing competition in Hindi Noting and drafting competition in Hindi,

Short story competition in Hindi

Recitation competition of self written poetry in Hindi

A Hindi workshop was also organized through Webex on the topic of 'Resolving problems of working in Hindi', for which Dr. Barun Kumar, Director / Official Language of the Ministry of Railways, Railway Board was invited as Speaker. 52 Executives of RailTel benefited from the Hindi workshop.

On 24.09.2020, a Hindi quiz competition, prize distribution and Rajbhasha Pakhwada closing ceremony program was organized. On this occasion, Mr. Prem Pal Sharma, a learned scholar writer and retired Joint Secretary of the Ministry of Railways, Railway Board, was invited as the Chief Guest, addressed and delivered a speech on the topic "Hindi Hamari Rajbhasha". Executives giving correct answers in Hindi quiz competition were honored with the books of eminent Hindi writers by the Chief Guest and the winners of other Hindi competitions were awarded with cash prizes and certificates by the Chairman and Managing Director of RailTel. Apart from this, one executive from each Regional Office and Corporate Office was also awarded with cash award and certificate for doing most of the work in Hindi in the office. Compliance with covid-19 global pandemic regulations was also ensured in the programs organized during Hindi Pakhwada.

A quarterly illustrated "RailTel Gatividhian" newsletter is being published regularly by RailTel for the use of the Official Language, the first edition of which was published from October to December, 2018 and is being published regularly thereafter. Apart from this, the official language magazine "RailTel Pragati" has also been printed on a half-yearly basis. Three editions have been published so far and the fourth issue is in process of publication. Appreciating the publication of the second issue of "Rajbhasha Griha Patrika", the Town Official Language Implementation Committee, Gurugram has also honored with a shield and certificate.

27. Prevention, Prohibition and Redressal of Sexual Harassment

In order to provide protection against sexual harassment of women at workplace and for prevention and redressal of complaints of sexual harassment, the Company has in place a policy to prohibit & prevent the social evil of Sexual Harassment at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder.

The objective of the policy is to provide women, a workplace, free from harassment, to ensure that every woman is treated with dignity and respect and to provide a speedy redressal mechanism to women who have been subjected to sexual harassment.

For the said purposes, RailTel has an Internal Complaints Committee (ICC) in place at its Corporate Office and all four Regional Office(s) which is responsible to:-

• Investigate every formal written complaint of sexual harassment.

• Meet at regular intervals.

• Prepare an Annual Report containing the details of complaints of sexual harassment pursuant to the provisions of Act and provide the same to employer.

• Take appropriate remedial measures to respond to any substantial allegations of sexual harassment.

The summary of complaints received during the year is Shown in Table-6.

Table-6

Number of complaints of Sexual Harassment received in the year. Nil
Number of complaints disposed off during the year. Nil
Number of cases pending for more than 90 days. 0
Number of workshops on awareness programmes against sexual harassment conducted during the year. 2
Nature of Action Nil

28. Risk Management

The Board of Directors of your Company at their 78th meeting had earlier adopted a Risk Management Policy (RMP) prepared by M/s. Price Waterhouse Coopers (PwC).

The Board of Directors of your Company in their n7th meeting held on 22nd December, 2020 had adopted the revised RMP which is in line with requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, the Board of Directors of your Company in their 122nd meeting held on 17th June, 2021 has considered and approved the revision in existing Risk Management Policy to make it in sync with the requirement of recent amendment in SEBI (LODR) Regulations, 2015. The revised Risk Management Policy is implemented in RailTel.

The present potential risks in RailTel are as follows:

• Project Risk

• Strategy Risk

• Market Risk

• People Risk

• Technology Risk

• Reputation Risk

• Insurable Risk

• Contractor/Vendor Risk

• Financial Risk

• Operational & Compliance Risk

• Cyber Security Risk

29. Related Party Transactions

Your Company has formulated a policy on Related Party Transactions which is also available on Company's website at www.railtelindia.com. This policy deals with the review and approval of Related Party Transactions. The Related Party Transactions entered during the year are given in Form no. AOC-2 in terms of section 134(3) (h) of the Companies Act, 2013, read with rule 8 (2) of the Companies (Accounts) Rules, 2014 is forming part of this Report and is placed at Annexure-I.

30. Corporate Governance

A detailed report on Corporate Governance as stipulated under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended and forms part of the Annual Report. The Company has always worked towards enhancing the Corporate Governance and the principles underlying the same within the organization. Your Company is in compliance with DPE Guidelines on Corporate Governance to the extent possible. Pursuant to the requirements of DPE Guidelines, 2010 a certificate obtained from Practicing Company Secretary and is forming part of this Annual Report.

In compliance with the directives of DPE, the Company is also regularly sending its quarterly and consolidated annual report in the prescribed manner to its Administrative Ministry/DPE. For each quarter, CPSEs are graded under various heads viz; Composition of Board, Non-Official Directors, Board Meetings, Code of Conduct, Audit Committee, Remuneration Committee, Board Disclosures, Directors' Remuneration etc. on the basis of scores prescribed for each head. For the year under review, RailTel has secured, based on self-evaluation, an annual score of "91.84%" which falls under ‘Excellent' grade for compliance of DPE Guidelines on Corporate Governance for FY 2020-21.

31. Corporate Social Responsibility

As per the provisions of Companies Act, 2013, your Company has formulated a CSR & Sustainability Policy which provides a broad framework within which the Company will carry out the CSR activities. The policy aims for social and economic development of community in the areas of disaster management, women empowerment, rural development, education, skill development, health and such other areas and adhere to sustainable and transparent business practices. The activities to be undertaken under the policy will be in accordance with Schedule-VII of the Act.

During the FY 2020-21, RailTel has undertaken to spend Rs. 663.19 lakh on CSR activities (includes, Rs. 369.09 Lakh which is 2% of average net profit before tax (PBT) of the company earned during the immediately preceding three Financial Years plus Rs. 33.42 Lakh carried forward from previous year plus Rs. 260.68 Lakh as unspent from 2019-20. Out of the CSR budget, Rs. 490.20 lakh was spent during FY 2020-21.

During the year, RailTel has carried out various CSR activities like contribution to PM Cares Fund, provision of IT Infra at education center in Mathura, providing free Wi-Fi at Railway stations, establishing Digital Learning Centre, Skill Development Centre for Women etc.

One of the RailTel's CSR initiative namely 'RailTel's Akansha Super-30, Dehradun, Uttarakhand' is related to providing free lodging and mentorship to poor but talented students from state of Uttarakhand, for admission to IIT's and other premier engineering institutes. The program has success rate of 100%.

RailTel has contributed an amount of Rs. 330 Lakh out of the CSR budget for FY 2020-21 to the PM CARES Fund, to support the Govt. of India in its crusade against unprecedented COVID-19 pandemic across the country. The fund, Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund' (PM CARES Fund) has been setup by the Government of India with the primary objective of dealing with any kind of emergency or distress situation such as that posed by COVID 19 pandemic. The Annual Report on CSR as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is forming part of this Report and is placed at Annexure-II.

32. Secretarial Standards

During the year, the Company is in compliance with the applicable Secretarial Standard issued by the Institute of Company Secretaries of India (ICSI) to the extent applicable.

33. Vigil Mechanism

The Company has a Whistle-Blower Policy with an objective to provide its employees an avenue to raise complaints, in line with commitment of RailTel to the highest standards of ethical, moral and legal business conduct and to provide necessary safeguards for protection of employees from reprisals or victimization, for whistle blowing in good faith. The policy prescribes for reporting process and manner in which investigation must be conducted.

During the year, under a full-time Chief Vigilance Officer, the company carried out various preventive activities including periodic and surprise inspections which led to various system improvements. This shall enable RailTel to proactively ensure transparency in various spheres of Companys activities as well as to take punitive measures wherever required.

The Status of Vigilance activities during the year is Shown in Table-7.

Table-7

SN HEAD NUMBER REMARKS
1 Number of Complaints received during the year 71 All complaints dealt as per complaint handling policy in a timely manner.
2 Number of investigations carried out during the year (incl. under directions of CVC & Railway Board) 14 Related to tender/contract management and procedure violations.
3 Number of Officers against whom disciplinary proceedings initiated arising out of investigations (incl. CBI cases) In addition, action against 2 Ex-employees communicated to relevant authorities.
a) Major penalty proceedings 3 nos.
b) Minor penalty proceedings 5 nos.
4 Number of Inspections conducted during the year Across Corporate Office, Regional offices & field units.
a) Periodic inspection 45
b) Surprise inspection 12
5 Number of Systemic Improvements taken up during the year 16 In respect to HR/Admin policies & procurement matters.

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(i) Other important work done in Vigilance department

IT Initiatives: Online Vigilance database of ERP created for all employees. SOLVE (System for Online Vigilance Enquiry) portal of DoPT adopted for creation and maintenance of vigilance profiles for all E5 level and above executives. Process of Vigilance clearance of all executives now being done over ERP.

Trainings: 24 internal trainings conducted on procurement, contract and preventive vigilance matters covering all employees.

Vigilance Policy: Vigilance clearance policy and complaint handling policy revised as per extant DoPT/CVC guidelines.

(ii) Vigilance awareness week

As per Central Vigilance Commission's directives, Vigilance Awareness Week was observed in RailTel from 27.10.2020 to 02.11.2020 in its true spirit on the theme "ird HTTjr, - Satark Bharat, Samriddh Bharat."

During the week, a number of vigilance awareness activities were carried out and events organized involving RailTel's Officials as well as for other Citizens. The week began with integrity pledge to RailTel officials on 27.10.2020. During the week, a number of vigilance awareness activities were carried out and events organized involving RailTel's officials as well as citizens. A brief of such activities is as under:

• On the occasion of inauguration of Vigilance Awareness Week, an address by Sh. Suresh Patel, Vigilance Commissioner, CVC was organised on 27.10.2020 on vigilance theme which was attended by all officers of Corporate office, Regions & Territories of RailTel.

• A lecture on public procurement matters was delivered by Sh. Shailendra Singh, CTE, Central Vigilance Commission on 28.10.2020.

• A workshop on matter related to conducting DAR and Inquiry proceedings was organised on 29.10.2020. The lecture was delivered by Sh. S N Gupta, former Director/CVC & CVO/Sports Authority of India (presently Director, USOF/ DoT).

• Sh. S P Beck, Executive Director/S&T/Vigilance, Railway Board was the chief guest on last day of vigilance awareness week i.e. 02.11.2020 and he also addressed the officers of RailTel on the occasion.

• A competition on article writing & poster creation was held among all employees across India on the theme of Vigilance Awareness Week 2020. Total 25 entries received against which prizes and certificates were handed out to shortlisted employees.

• RailTel vigilance department issued a vigilance bulletin on the occasion comprising new vigilance policies, guidelines on Tender Committee proceedings, Do's & Don'ts of procurement apart from award winning articles and poems from employees.

• Various housekeeping activities were also carried out in all offices of RailTel as directed by CVC.

34. Impact of COVID-19

Covid-19 continues to have a devastating effect on people's lives as well as economic activities around the world. The impact of the Covid-19 pandemic is likely to be minimal on telecom companies. There is likely to be substantial demand for our services like NIC e-office, Video conferencing, VPN etc. due to surge in demad for remote working environment. The demand for bandwidth has also increased tremendously. Work from home and online school/college has raised the demand for our RailWire broadband as well. There is going to be an upward trend in the demand of digital services and RailTel team is fully prepared to encash on the same.

35. Statutory Disclosures

Your Directors have made necessary disclosures, as required under various enactments including the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

36. Auditors

36.1 Statutory Auditors

The Comptroller and Auditor General of India (CAG) has appointed M/s. Suresh Chandra & Associates of New Delhi as Central Statutory Auditors of the Company to audit the Financial Statements for the year ended 31st March, 2021.

Besides, the CAG has also appointed the following named firms of Chartered Accountants as Branch Auditors for auditing of four Regional Office(s) of the Company:

Auditor Region
Om Prakash S Chaplot & Co. Western Region
K.N. Gutgutia & Co. Eastern Region
Tukaram & Co. LLP Southern Region
Suresh Chandra & Associates Northern Region & Corporate Office

In terms of the authorization given by the members in their last Annual General Meeting, the Board on the recommendation of Audit Committee has already considered and approved payment of fee for all the above Auditors to the aggregate extent of Rs. 23.88 lakh excluding GST.

36.2 Cost Auditors

The Company has appointed M/s. R.J. Goel & Co., Cost Accountants as Cost Auditors to audit the cost record maintained by the Company for the Financial Year 2020-21.

The Company has filed Form CRA-2 with the Ministry of Corporate Affairs in this regard.

36.3 Secretarial Auditor

During the year, pursuant to provisions of Section 204 of the Companies Act, 2013 read with rules made thereunder, RailTel has appointed M/s P.C. Jain & Co, Practicing Company Secretaries, as Secretarial Auditor of the Company for the Financial Year 2020-21. The Secretarial Audit has been conducted by M/s P.C. Jain & Co, Practicing Company Secretaries and issued a Secretarial Audit Report in the format prescribed under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit report of the Company for the year ended 31st March, 2021 in Form MR-3 and the Management's reply on the observation/comments of Secretarial auditor forms part of this report and are placed at Annexure-III & IV, respectively.

37. Comments of CAG

The comment(s) of CAG are attached and forming part of this Annual Report.

38. Auditors' Report

The Auditors'Report of the Company for the year ended 31st March, 2021, is attached with the Financial Statements of the Company. There is no qualification in the Auditors Report on the Financial Statements of the company.

39. Energy Conservation, Technology Adoption, Foreign Exchange Earnings and Outgo

The Company is presently engaged in providing telecom services. The disclosure on Conservation of Energy and Technology Absorption as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 and as prescribed under Rule 8 of Companies (Accounts) Rules, 2014 is forming part of this Report and is placed at Annexure-V.

40. MOU with Administrative Ministry

RailTel is signing a MoU with the Government of India, Ministry of Railways whereby stating inter alia the physical and financial targets. The MOU pertaining to FY 2020-21 was signed with Ministry of Railways within stipulated time.

41. Event occurring after the Balance Sheet Date

As such no significant events occurred between the end of the financial year to which this Financial Statements relates and date of this report.

42. General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

• Details relating to deposits covered under chapter V of the Companies Act, 2013.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares) to employees of the Company under any Scheme.

• Neither the Chairman and Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from subsidiary company.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

43. Directors' Responsibility Statement

In terms of the provisions of section 134(3)(c) of the Companies Act, 2013, as amended, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

44. Acknowledgements

Your Directors would like to place on record their sincere appreciation and gratitude to the Indian Railways, Government of India, Department of Investment and Public Asset Management (DIPAM) Ministry of Communications and IT and other Ministries/ Departments, subscribers of Company's telecom services, the stakeholders, and bankers and to all the State Governments, Local Bodies and Regulatory authorities for their continued cooperation and invaluable support. Your Directors thank all share-holders, business partners and all members of the RailTel Family for their faith, trust and confidence reposed in the Board. Your Directors express their deep appreciation for the hard work and dedicated efforts put in by the employees at all levels and look forward to their continued contribution in achieving the mission and objective of the Company.

For and on behalf of the Board
Sd/-
Puneet Chawla
Chairman and Managing Director
DIN: 08303340
Place: New Delhi
Date: 03/09/2021