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EQUITY - MARKET SCREENER

Vindhya Telelinks Ltd
Industry :  Construction
BSE Code
ISIN Demat
Book Value()
517015
INE707A01012
1094.9666667
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
VINDHYATEL
15.98
2868
EPS(TTM)
Face Value()
Div & Yield %
151.42
10
0.62
 

As on: Apr 18, 2024 01:48 PM

TO THE SHAREHOLDERS

The Board of Directors has the pleasure of presenting its Fortieth Annual Report of the business and operations of your Company, together with the Audited Financial Statements of the Company for the financial year ended March 31,2023.

SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANY'S AFFAIRS

Description

Amount (Rs in lakhs)

Standalone

Consolidated

2022-23 2021-22 2022-23* 2021-22
Revenue from Operations 290011.06 132394.90 290011.06 132394.90
Other Income 1381.13 3100.63 1381.13 3100.63
Earnings before Finance Costs, Depreciation and Tax 29435.78 19106.14 33739.96 33735.81
Finance Costs 7311.54 5685.96 7311.54 5685.96
Profit before Depreciation and Tax 22124.24 13420.18 26428.42 28049.85
Depreciation and Amortization 1772.02 2219.97 1772.02 2219.97
Profit before Tax 20352.22 11200.21 24656.40 25829.88
Tax Expenses 4921.86 2739.62 6125.24 6501.91
Net Profit for the year 15430.36 8460.59 18531.16 19327.97

* Not comparable with that of the previous financial year 2021-22 for the reason as stated in detail under the heading "SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE".

The financial statements for the financial year ended March 31, 2023 have been prepared in accordance with Ind AS in terms of the provisions of Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

GENERAL & CORPORATE MATTERS

Your Company continues to operate in two business segments i.e. Cable and Engineering Procurement and Construction (EPC). There has been no change in the nature of business of the Company.

During the year under review, your Company achieved standalone Revenue from Operations of Rs 290011.06 lakhs as compared to Rs 132394.90 lakhs in the previous year registering a growth of about 119%. The EPC business segment registered a growth in revenue of 164% because of surge in order book as a result of large value order awarded under Jal Jeevan Mission which is under execution, whereas Cable business segment has registered an increase of around 36% in revenue in comparison with the previous financial year due to increased volume and better product mix. The standalone Profit before Depreciation and Tax for the year stood at Rs 22124.24 lakhs (comprising of Cable business segment Rs 9148.74 lakhs and that of EPC business segment Rs 12975.50 lakhs) as compared to Rs 13420.18 lakhs in the corresponding previous year (comprising of Cable business segment Rs 9392.53 lakhs and that of EPC business segment Rs 4027.65 lakhs) recording an impressive overall growth of around 65% year on year basis. The detailed operational working of your Company for the year is provided in the Management Discussion and Analysis forming a part of this Report.

The Company achieved an export revenue of Rs 13103.73 lakhs during the year under review as compared to Rs 6502.87 lakhs in the previous year registering a growth of about 102%. The Company sees further growth opportunities in export front in future as India is very well positioned to take advantage of global supply chain resilience and the multi-sourcing shift in the global markets. Your Company is fully equipped with state-of-the-art facilities for telecom and other cables with widest range and best in class products conforming to customised specifications for meeting the emerging demand from various end users in global market places.

In 2022, the total world optical fibre cable consumption grew by 5.90%, year-on-year basis, reaching 534.90 million FKM. The industry quite successfully weathered challenges such as preform and fibre supply tightness, helium gas shortages, high raw material costs, labour shortages and not to mention about the re-surge of covid in China during late 2022 and early 2023 period. A market research report from the Business Research company sees double-digit growth for optical fibre cable through 2026 at global level. The rising demand for higher bandwidth and faster speed connections will enhance the growth of the optical fibre cable market. There is a surge in demand for high bandwidth from enterprises and individuals due to increased use of the internet for video calls, gaming, online shopping and social media.

India's internet economy is expected to reach $1 trillion by 2030 from the current $175 billion. The growth of India's internet economy will be driven by a combination of factors such as increasing adoption of digital technologies among internet users in Tier 2 + locations, and the digitisation of large traditional businesses and the growth of the startup ecosystem. India has also implemented one of the

fastest rollout of 5G services in the world and its moving at absolute warp speed, for being able to unlock tremendous economic and technology benefits from it. This reflects an amazing representation of India's inventiveness and ability to adapt and adopt new technologies rapidly which augurs well for telecom cable and related infrastructure industry which is poised to leverage the significant planned investment by telecom operators in setting up the underlying infrastructure and catapult itself as a strong backbone of digital revolution. The 5G drive in India is expected to remain strong going forward, with telecom operators, consumers and enterprises joining in for the ride. While 5G adoption is expected to ramp-up, so are the use cases on the enterprise front. The telecom industry is also expected to see an increased ARPU and expansion of the telecom eco-system as demand for operational innovation rises. The current demand for data and the end user experience will make India a leading 5G nation and the leading nation for digitalization due to incredible speed of 5G rollout in India.

The National Broadband Mission targets to fiberise 70% of India's base transceiver stations (BTS) by fiscal year 2025 is an ideal requirement for the efficient rollout of 5G services. However, the fiberisation at 35% in India as of June, 2022, more than 3 lakh KMs may have to be covered at the pan-India level between fiscal year 2023 and fiscal year 2025. Further there is a huge variance across states with fiberisation at ~40% in metro and 31-33% in some Category C circles. Fiberisation is less at 25-30% in some Category B and Category C circles such as Himachal Pradesh, Uttar Pradesh East and West Bengal. Success of early 4G to 5G conversion hinges on improvement in fiberisation levels in Metros. A major reason for the slow pace of fiberisation is Right of the Way (ROW) cost, which ranges from several lakh to a few crore across circles. While the central government has taken efforts to maintain a uniform ROW cost across circles, the high disparity has been a huge roadblock to reaching the fiberisation target. Further, the 5G latency and capacity requirements suggest that fibre will be necessary for backhaul links. Backhaul speeds of 100 Gbps are likely, which are impossible with twisted pair copper. As per an estimate, telcos may have to collectively splurge substantial amount in capex spends to adequately fiberise telecom towers and in turn, ensure a meaningful roll out of 5G services across India. Full scale 5G deployments across India would entail densification of networks, and in turn, sizable investments in backhaul infrastructure via fiberisation as only 35% of telecom towers are fiberized now. With relatively low penetration of fibre in India, an estimated capex in the range of Rs 1.50 lakh crores to Rs 2.50 lakh crores would be needed over the next 4-5 years to achieve the remaining 35% - 36% fiberisation target and spend on incremental BTS for 5G. Backhaul has to do with connecting the core of a mobile network to nodes and then onto towers, to transmit data, elements that are vital for an effective 5G mobile broadband operation. However, such sizable capex spends in tower fiberisation won't be a cakewalk as telcos' debt levels remain elevated and are set to rise further after the 5G spectrum sale. The technology upgradation to 5G coupled with customer upgrades from 2G/4G services to 5G will drive core telecom business growth, but non-telco businesses such as enterprise, cloud/digital services and fixed broadband will also be crucial to drive industry growth enabling telcos to allocate adequate resources for network expansion thereby including passive optical fibre cable networks.

The Indian data centre industry has witnessed a surge in investor and operator activities, on account of it being a huge-growth market but currently being underserved by existing supply and facing strong demand from a variety of end users. Multiple tailwinds eg. accelerated adoption of cloud services, increasing digitization and data localisation requirement, rollout of 5G and increased bandwidth, explosion in data creation and consumption, business continuity and back-up plans, etc. are driving the growth and these tailwinds are expected to continue into the foreseeable future. The Company is seized of the emerging opportunities particularly for high fibre count specialty optical fibre cables for data centre applications and is in the process of upgrading its manufacturing facilities for catering to the huge envisaged growth in demand arising from data centre industry in domestic and global market places.

Indian Railways is set to see a record capital expenditure (capex) of Rs 2.6 trillion in fiscal year 2023-24. This would give a push to the massive infrastructure expansion lined up and the government's share would contribute around Rs 2.4 trillion to this- the highest ever. The outlay in the Union Budget for Railways will bolster construction activities, including relating to Railway Signaling and Quad Cables, Rolling Stock Cables amongst others which augurs well for the Company, being one of the key suppliers of Railway Signaling, Quad and E-beam Cables for railway applications.

Your Company is gradually augmenting production capacity of its state-of-the-art production facility for manufacturing a widest range of optical fibre cables conforming to various domestic and international specifications keeping pace with growth in demand for contemporary as well as high precision/quality products. Your Company's Electron Beam Irradiation facility ("E-Beam cable facility") which helps to cross link the Polymer jacket of the cables have been successfully stabilized and is now operating at par optimum capacity level and delivering superior products conforming to national and international standards for a variety of applications. In order to derive economies of scale, further increase in the capacity of E-Beam Cable facility is under implementation to cater to the increased business demands in all the user segments like solar energy, railways, ship building and the new technology segments. The Company has also entered into an in-principle understanding for export of cables from this facility to European market through a renowned global player in order to achieve optimum capacity utilization considering ongoing expansion in capacity which is likely to be operational by second quarter of ensuing fiscal year.

The EPC business segment of your Company is on track to become one of the prominent, well diversified infra project solution provider in India. Based on its expertise in managing diverse infrastructure projects, the division contributes as a partner in growth exerting positive impact on customers as well as on society. Existing business verticals for the EPC business segment, interalia, includes Telecom network rollouts both under IP1 and EPC models, Irrigation, Sewerage, Water supply infrastructure, Power distribution, and substation projects in addition to civil construction and city gas distribution pipeline projects.

The EPC telecom vertical was impacted by the general economic situation as the government-planned projects under BharatNet did not materialize. One of the key focus areas under the government's Bharat Net project was to strengthen digital connectivity across the country, especially in rural areas. The government plans to invest heavily in expanding the reach of high-speed internet to remote

areas, which will help in bridging the digital divide. However, a significant cut in spending from the Universal Service Obligation Fund (USOF) in Financial Year 2022-23 against the Budget targets indicates that for the sixth continuous year, the government's spending to provide connectivity to rural and remote areas to bridge the digital divide has slowed down. For the Financial Year 2023-24, the spending from the USOF is pegged at Rs 10,400 crores, over three times higher than the revised estimates for the Financial Year 202223. Currently, a major allocation of the USOF goes towards the BharatNet project.

While in the Power Distribution vertical, the cost increase, extreme volatility in the commodity prices and rising interest rates had a dampening effect on the overall financial performance. During the same time, market opportunities for Water and Irrigation projects remained positive due to thrust of the Government of India on drinking water pipeline projects to each rural household through Jal Jeevan Mission. Performance for the year under review was led by the Water distribution segment with your Company executing a mega rural drinking water project in the State of Uttar Pradesh in association with M/s Gaja Engineering Pvt. Ltd. under an unincorporated Joint Venture. Your Company's strong project management capabilities, man management skills, robust supply chain, dependable sub-contractors and experienced team with rich project management expertise is helping the Company in rolling out this mega project with desired pace and perfection.

With the current global economy best described as slow, uncertain, challenging, difficult, volatile and unpredictable, the infrastructure sector in India is cautiously optimistic based on huge budgetary outlay for the sector by the central and state governments which may provide immense opportunities of growth to your Company given its strength in executing projects in the relevant fields in which it operates. The Government of India is also looking to redefine ‘infrastructure' and devise a new framework to ease flow of funds to the sector which augurs well for EPC business segment of your Company.

FOREIGN TECHNICAL COLLABORATION

The Company entered into a Radox Technology Cooperation Agreement with HUBER+SUHNER AG, Switzerland ("H+S") for manufacturing of H+S RADOX products for Rolling stock cable applications in Indian Railway industry by using technical know-how and assistance of H+S. The Company foresees growth opportunities in supply of Railway E-Beam cables and other products (H+S RADOX products) directly to the rolling stock industry besides Indian Railways and its allied companies.

CAPITAL EXPENDITURE

During the year under review, the Company continued its focus on judicious capital allocation and incurred capital expenditure aggregating to Rs 1983.02 lakhs, consisting of addition to (a) Buildings of Rs 21.01 lakhs; (b) Plant & Equipment of Rs 1663.24 lakhs; and

(c) Other Fixed Assets of Rs 298.77 lakhs for further capacity expansion/ augmentation.

DIVIDEND

After considering the Company's profitability, free cash flow, overall financial performance and other parameters, the Board of Directors of your Company is pleased to recommend a Dividend of Rs 15/- (previous year Rs 10/-) per equity share of face value Rs 10/- each (i.e. 150%) for the financial year ended on March 31, 2023. The payment of Dividend shall be subject to deduction of Tax at source as per the prescribed rate under Income Tax Act, 1961 and relevant rules framed thereunder. The distribution of Dividend on equity shares, if approved by the Members at the ensuing Annual General Meeting, will result in pay out of Rs 1777.63 lakhs. The dividend recommended is in accordance with the Company's Dividend Distribution Policy. No amount has been transferred to the General Reserve for the financial year 2022-23.

The Dividend Distribution Policy of the Company as formulated in compliance with Regulation 43A and other applicable provisions of the Listing Regulations, as amended from time to time, is uploaded on the Company's website and can be accessed at weblink: https://www.vtlrewa.com/Policies/DDP.pdf.

UNPAID DIVIDEND

The disclosure relating to year wise amount of unpaid/unclaimed dividend lying in Unpaid Dividend account and the corresponding shares which are liable to be transferred to the Investor Education and Protection Fund (IEPF) during the current financial year and the due date of such transfer is provided in the Corporate Governance Report which forms a part of the Annual Report.

SHARE CAPITAL

The paid-up Equity Share Capital of the Company as at March 31,2023 stood at Rs 1185.09 lakhs. During the year under review, the Company has neither issued shares with differential rights as to dividend voting or otherwise nor has granted stock options or sweat equity under any scheme. Further, none of the Directors of the Company holds investments convertible into equity shares of the Company as on March 31,2023.

During the Financial Year 2022-23, the Company has not issued changed reclassified or sub-divided converted or reduced any Equity Shares/Convertible Securities/Warrants/Sweat Equity Shares/Employee Stock Options and there is no change in voting rights and buy back of shares.

DEPOSITS/FINANCE

During the year under review, your Company has not accepted any public deposits within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

Your Company continued to optimise bank borrowings by focusing on cash flows and working capital management. The Company has fully redeemed balance 160 Non-Convertible Debentures (NCDs) aggregating to Rs 1600.00 lakhs alongwith accrued interest thereon during the year under review. The Company's financial discipline and prudence is reflected in the reasonable credit rating ascribed by the external rating agency.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) read with Para C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time ("Listing Regulations") the Management Discussion and Analysis, Report on Corporate Governance and a Certificate by the Managing Director & CEO confirming compliance by all the Board Members and Senior Management Personnel with Company's Code of Conduct and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As a part of its initiative under Corporate Social Responsibility (CSR), your Company has undertaken CSR activities, projects and programmes broadly in accordance with Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and CSR Annual Action Plan 2022-23 read with the Company's CSR Policy. The CSR activities as detailed in Note No. 43 of financial statements have been carried out in and around the local areas where the Company operates and nearby localities.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-I which is attached hereto and forms a part of the Directors' Report. The Corporate Social Responsibility Policy of the Company is available on the website of the Company i.e. https://www.vtlrewa.com/Policies/CSR.pdf.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) that in the preparation of the annual financial statements for the year ended March 31,2023, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013 have been followed and there are no material departures from the same;

(b) that such accounting policies as mentioned in Notes to the financial statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2023 and of the profit of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken 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) that the annual financial statements have been prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

(f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company's system of financial and compliance controls with reference to the financial statements and risk management is embedded in the business process by which the Company pursues its objectives.

The Risk Management Committee constituted by the Board of Directors is in compliance with the Regulation 21 and other applicable provisions of the Listing Regulations, as amended. The Risk Management Policy of the Company has also been formulated by the Board of Directors in compliance with the applicable provisions of the Listing Regulations and the Companies Act, 2013 which lays down the procedures about the risk assessment and mitigation thereof.

The Risk Management Committee, Audit Committee and the Board of Directors assess and monitor regularly the framework for identification evaluation and prioritization of risks mechanism to mitigate risks process that methodically track governance objectives risk ownership/accountability compliance with policies and decisions that are set through the governance process risks to those objectives and services and effectiveness of risk mitigation and controls besides inherent risks associated with the products/goods and services dealt with by the Company as well as execution of turnkey projects of EPC business segment. Your Company's approach to address business risks and compliance functions is comprehensive across both the business segments and includes periodic review of such risks and a framework for mitigating and reporting mechanism of such risks. In the opinion of the Board of Directors there are no material risks which may threaten the existence of the Company.

The Company has laid down the policies and procedures for internal financial controls for ensuring the orderly and efficient conduct of its business in order to achieve the strategic operational and other objectives over a long period and that its exposure to risks are within

acceptable limits. In addition the policies and procedures have been designed with an intent to ensure safeguarding of Company's assets the prevention and detection of frauds and errors the accuracy in completeness of the accounting records and the timely preparation of reliable financial information.

The management is committed to ensure effective internal financial controls environment which provides assurance on the efficiency of Company's business operations coupled with adherence to its established policies safety/security of its assets besides orderly and legitimate conduct of business in the circumstances which may reasonably be foreseen. The Company has defined organisation structure authority levels delegated powers internal procedures rules and guidelines for conducting business transactions. The Company's system and process relating to internal controls and procedures for financial reporting have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Companies Act, 2013, Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act and rules made thereunder and all other applicable regulatory/statutory guidelines etc. for disclosures with reference to financial statements.

Your Company's internal control systems are supplemented by an extensive program of internal audit by an independent firm of Chartered Accountants. Internal audits are conducted at regular intervals and a summary of the observations and recommendations of such audits are placed before the Audit Committee. The Internal Auditors as well as the Audit Committee conduct an evaluation of the adequacy and effectiveness of the system of internal financial controls system on an ongoing basis.

The Board has also implemented systems to ensure compliance of all applicable laws to the Company which were effective and operative. At quarterly intervals the Company Secretary & Compliance Officer places before the Board a certificate alongwith a detailed statement certifying compliance of various laws and regulations as applicable to the business and operations of the Company after obtaining confirmation from all functional heads responsible for compliance of such applicable laws and regulations. The Company Secretary is responsible for compliance of corporate laws including the Companies Act, 2013, SEBI Act and rules/guidelines, other corporate laws/rules and regulations and Listing Regulations including any statutory amendment(s), modification(s) or enactment(s) thereto to the extent apply and extend to the Company.

INDUSTRIAL RELATIONS, SAFETY AND SUSTAINABILITY

Industrial relations remained cordial throughout the year. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees in the uninterrupted journey of satisfactory financial performance of the Company. The Board would also like to place on record its appreciation for dedicated and exemplary services rendered by employees at all levels in the prevailing challenging times in ensuring safe and reliable operations/project(s) execution throughout the year. The changes in the world of work since the onset of Covid-19 pandemic led to reimagine value proposition by putting in place creative structure for employees at all levels that allows innovation, growth to work and accelerate competitive advantage to the Company. Further, the Company is proactively reskilling and upselling its employees at all levels to remain competitive, adapt to changes in market and to respond to new business opportunities resulting from rapid pace of technological changes. The Company has also built a culture of openness where employee engagement is encouraged in problem-solving process at each level.

Your Company continues to accord a very high priority to both industrial safety and environmental protection and these are ongoing process at the Company's plant and facilities and also at respective project sites to maintain high awareness levels. The Company has stressed the need to adopt the highest safety standards on projects undertaken by the Engineering, Procurement and Construction (EPC) business segment with the emphasis on ensuring safety on all projects under execution. Your Company is conscious of the importance of environmentally clean and safe operations so as to ensure safety of all concerned and compliance of applicable environmental regulations and to this end working continuously towards reduction in waste for disposal. The Company as a policy reevaluates safety standards and practices from time to time including through its safety committee with representation from all areas of manufacturing and follow up through regular meetings to take progress and action item in order to raise the bar of safety standards for its people as well as users and customers. The Company is also accelerating ESG strategies as well as resilience to the dynamics that are taking place globally because of climate change by learning, adapting and innovating towards a new context.

The Company embraces sustainability goals in a much bigger way. The employees at all levels are deeply involved in driving sustainable operations in manufacturing facilities and also in and around project sites through innovations and enabling community initiatives in health, hygiene, sanitation and waste management thereby simultaneously fostering increased job satisfaction and motivation amongst employees.

RECOGNITION

Your Company's manufacturing facilities continue to remain certified by independent and reputed external agencies as being compliant as well as aligned with the external standards for Quality Management System as per ISO 9001:2015 & TL 9000 R6.3/R5.7 H, Environmental Management System as per ISO 14001:2015, Occupational Health and Safety Management System as per ISO 45001:2018, Business Continuity Management System as per ISO 22301:2012, Rail Quality Management System as per ISO/TS 22163:2017 and Information Security Management System as per ISO 27001:2013. During the year, the audits for these Certifications established continuous improvement in performance against these standards.

Your Board of Directors is pleased to state that the EPC business segment of the Company was recognized and awarded as one of the Best Brands for the year 2022 by The Economic Times (ET) after rigorous evaluation process and taking into consideration brand equity, value delivered by the Company to its customers and market presence, etc.

DIRECTORS

Shri R.C. Tapuriah, Non-Executive Independent Director of the Company left for heavenly abode on September 14, 2022. The Board of Directors expresses with utmost grief its heartfelt condolences on the sudden and untimely sad demise of Shri R.C. Tapuriah, who will always be remembered for his endearing and noticeable qualities of modesty and simplicity for someone of his stature and bearings.

During the year under review, Smt. Rashmi Dhariwal (DIN: 00337814) has been appointed as a Non-Executive Independent Director of the Company, not liable to retire by rotation, for a period of Five (5) consecutive years with effect from November 14, 2022 to November 13, 2027 by way of a Special Resolution passed by the members of the Company through Postal Ballot on December 22, 2022.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Shri Harsh V. Lodha (DIN: 00394094), Director shall retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment as a Director of the Company. The Board recommends his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting. As required under the Regulation 36(3) of the Listing Regulations and relevant provisions of the Secretarial Standard on the General Meeting (SS-2), the brief resume and other details of Shri Harsh V. Lodha are given as the Annexure to the Notice of the ensuing Annual General Meeting which is being sent to the shareholders along with the Annual Report.

BUSINESS RESPONSIBILTY AND SUSTAINABILITY REPORT

In compliance with the Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report for the year ended March 31,2023 and the required disclosures thereunder form an integral part of the Annual Report.

KEY MANAGERIAL PERSONNEL

Shri Y.S. Lodha, Managing Director & CEO, Shri Saurabh Chhajer, Chief Financial Officer (CFO) and Shri Dinesh Kapoor, Company Secretary continue to be the Key Managerial Personnel (KMP) of the Company throughout during the year under review.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of your Company viz. Shri S.K. Misra, Shri Shiv Dayal Kapoor, Smt. Kiran Aggarwal, Shri P.S. Dasgupta and Smt. Rashmi Dhariwal have severally given a declaration pursuant to Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and that they are registered in the data bank of Indian Institute of Corporate Affairs for life time as per Section 150 of the Companies Act, 2013 and rules framed there under. They have also furnished the Declaration and Confirmation pursuant to Regulation 25(8) of the Listing Regulations affirming compliance to the criteria of Independence as provided under Regulation 16(1)(b) of the Listing Regulations, as amended. The Independent Directors have individually confirmed that they are not aware of any circumstances or situation which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. Based on the declarations and confirmations of the Independent Directors and after undertaking due assessment of the veracity of the same the Board of Directors recorded their opinion that all the Independent Directors are independent of the Management and have fulfilled all the conditions as specified under the governing provisions of the Companies Act, 2013 and the Listing Regulations.

MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES

During the year under review, the Board met five (5) times viz. on May 23, 2022, August 9, 2022, September 24, 2022, November 14, 2022 and February 10, 2023.

As required under Section 177(8) read with Section 134(3) of the Companies Act, 2013 and the rules framed thereunder, the composition and meetings of the Audit Committee were in line with the provisions of the Companies Act, 2013 and the Listing Regulations. During the year under review, all the recommendations of the Audit Committee were accepted by the Board of Directors. The requisite details of Audit Committee alongwith composition, number of meetings of all other Board Committees held during the year under review and attendance at the meetings are provided in the Report on Corporate Governance forming a part of the Annual Report.

PERFORMANCE EVALUATION OF BOARD COMMITTEES & DIRECTORS

Pursuant to the Provisions of the Companies Act, 2013 and Listing Regulations and the Guidance Note on Board Evaluation issued by SEBI, the Board of Directors of the Company carried out the annual evaluation of its own performance and that of its Committees and individual Directors, inter-alia, to assess the skill set and contribution that are desired recognising that competencies and experiences evolves over time. The manner in which annual evaluation has been carried out by the Board of Directors is given in the Report on Corporate Governance which forms a part of the Annual Report. During the process of evaluation, the Board of Directors also considered the criteria for evaluation of performance of Independent Directors and the Board of Directors formulated by the Nomination and Remuneration Committee. The Independent Directors carried out the annual performance evaluation of the Chairman (taking into account the views of non-executive directors and the Managing Director), the Non-Independent Directors and the Board as a whole, and the same was also reviewed and deliberated by the Board of Directors. The performance evaluation of independent directors was carried out by the entire Board of Directors, excluding the directors being evaluated. In conclusion, the Board of Directors was satisfied with the performance and functioning of the Board, its Committees and individual members.

SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee (NRC) has adopted a terms of reference which, inter-alia, deals with the criteria for identification of members of the Board of Directors and selection/ appointment of the Key Managerial Personnel/Senior Management Personnel of the Company. The NRC recommends appointment of Director/appointment or re-appointment of Managing Director based on their qualifications, expertise positive attributes and independence/professional expertise in accordance with prescribed provisions of the Companies Act, 2013, governing rules framed thereunder and Listing Regulations. The NRC, in addition to ensuring diversity of race and gender, also considers the impact the appointee would have on Board's balance of professional experience background viewpoints skills and areas of expertise.

The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee has also adopted the Remuneration Policy for the Directors, Key Managerial Personnel and Senior Managerial Personnel. In consonance with the recommendation of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on May 18, 2023, accorded the approval to the amended Remuneration Policy to widen the level of employees covered under "Senior Management of the Company" in consonance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2023. The guiding principles of the Remuneration Policy are stated in the Report on Corporate Governance which forms part of the Annual Report. The Remuneration Policy is uploaded on the website of the Company and the weblink of the same is https://www.vtlrewa.com/Policies/Remuneration.pdf.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In terms of the provisions of Section 177(9) of the Companies Act, 2013, the Company has implemented a Vigil Mechanism/ Whistle Blower Policy to deal with instances of fraud and mis-management, if any, and conducting business with integrity including in accordance with all applicable laws and regulations. No employee has been denied access to the Vigilance Officer as well as Chairman of the Audit Committee. The details of the Vigil Mechanism and Whistle-Blower Policy are explained in the Report on Corporate Governance and also posted on the website of the Company.

MAINTENANCE OF COST RECORDS

The requirement of maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and have the audit of its cost records conducted by a Cost Accountant is applicable in respect of certain specified products of the Company and accordingly such accounts and records are made and maintained by the Company.

AUDITORS

Messrs BGJC & Associates LLP, Chartered Accountants (Registration No. 003304N/N500056) were appointed as the Statutory Auditors of the Company for a term of five (5) consecutive years commencing from the conclusion of 37th AGM till the conclusion of the 42nd AGM in terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended. The Auditors have confirmed to the Company that they continue to remain eligible to hold office as Auditors and are not disqualified from being so appointed as Statutory Auditors under the Companies Act, 2013, the Chartered Accountants Act, 1949 and the rules and regulations framed thereunder.

The Board of Directors on the recommendation of the Audit Committee, has re-appointed Messrs D. Sabyasachi & Co., Cost Accountants (Registration No. 000369), as the Cost Auditors for conducting the audit of the cost records maintained by the Company in respect of certain specified products of the Company covered under the Companies (Cost Records and Audit) Rules, 2014 and fixed their remuneration based on the recommendation of the Audit Committee. The remuneration together with applicable Goods and Services Tax thereon and reimbursement of out of pocket expenses to be paid to the Cost Auditors is subject to ratification by the members in the ensuing Annual General Meeting of the Company. The Cost Audit Report in respect of applicable specified products covered under the Companies (Cost Records and Audit) Rules, 2014 pertaining to the financial year ended March 31,2022 was filed by the Company on August 29, 2022 with the concerned authorities.

AUDITORS' REPORT

The Auditors' Report on the financial statements of the Company forms a part of the Annual Report. There is no qualification, reservation, adverse remark, disclaimer or modified opinion in the Auditors' Report which calls for any further comments or explanations. Further, during the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed in pursuance to Section 134(3) (ca) of the Companies Act, 2013.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs R.K. Mishra & Associates, Practising Company Secretaries, were appointed to undertake the Secretarial Audit of the Company for the year ended March 31, 2023. The Report of the Secretarial Auditor is given in the prescribed form in Annexure-II which is attached hereto and forms a part of the Directors' Report.

No qualification or observation other remarks or disclaimer have been made by Messrs R.K. Mishra & Associates in the Secretarial Audit Report which calls for any comments or explanations.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has proper system in place to ensure compliance with the provisions of applicable Secretarial Standards. During the year under review, your Company has complied with applicable provisions of Secretarial Standards i.e. SS-1 and SS-2 relating to "Meetings of Board of Directors" and "General Meetings" respectively issued by the Institute of Company Secretaries of India.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into by the Company during the financial year under review were generally on arms' length basis and in the ordinary course of business. The disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in prescribed Form AOC-2 is given in Annexure-III which is attached hereto and forms a part of the Directors' Report. There are no material significant related party transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All related party transactions are placed before the meeting(s) of Audit Committee for its review and approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for a financial year for the transactions which are of a foreseen and repetitive in nature. The statement giving details of all related party transactions entered into pursuant to the omnibus approval together with relevant documents/information, as required, are placed before the Audit Committee for review and updation on quarterly basis. The Policy on materiality and dealing with Related Party Transactions (‘RPT Policy') is uploaded on the Company's website and can be accessed at weblink: https://www.vtlrewa.com/Policies/RPT.pdf.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE

Your Company has three wholly owned unlisted subsidiaries namely August Agents Limited, Insilco Agents Limited and Laneseda Agents Limited. None of the subsidiary companies is a material unlisted subsidiary company as defined under Regulation 24(1) of the Listing Regulations. During the year under review, there was no change in the number of subsidiaries or in nature of business of subsidiaries.

Birla Visabeira Private Limited, an existing joint venture company and also an Associate Company within the meaning of Section 2(6) of Companies Act, 2013 and is presently engaged predominantly in standalone dark fibre networks rollout and related operation & maintenance businesses in the telecommunications sector. The joint venture's financial performance during the period under review was adversely impacted due to liquidity constraints and slower than expected growth in offtake of the networks in select telecom circles in which it operates.

Apart from Birla Visabeira Private Limited, Universal Cables Limited (UCL), Birla Corporation Limited (BCL) and Punjab Produce Holdings Limited (PPHL) are Associate companies within the meaning of Section 2(6) of the Companies Act, 2013 read with definition of the term ‘Associate' as per Indian Accounting Standard (Ind AS)-28. UCL, BCL and PPHL have delivered a satisfactory financial performance during the year under review.

A Statement containing the salient features of the financial statements of associate companies and a joint venture company except *subsidiary companies as prescribed under the first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with rule 5 of The Companies (Accounts) Rules, 2014 is provided as an Annexure to the consolidated financial statements and therefore not repeated for the sake of brevity. In accordance with the provisions of Section 136 of the Companies Act, 2013 read with Listing Regulations, the Company's audited financial statements including the consolidated financial statements and all other documents required to be attached thereto is put up to the Company's website: www.vtlrewa.com.

A report on the performance of financial position of three associate companies and a joint venture company except *subsidiary companies as per the provisions of the Companies Act, 2013 is provided as part of the consolidated financial statements and hence not repeated herein for the sake of brevity.

*Note: The information regarding Audited/Unaudited Financial Statements including Special Purpose Ind AS Standalone Financial Statements of the three wholly owned unlisted subsidiary companies for the financial year ended March 31, 2023 are not being furnished as the same have not been made available to the Company by certain delinquent ex-directors of the subsidiary companies who are having unauthorised and illegal possession of the books of account and other records of the subsidiary companies and they are not allowing access to other directors of the subsidiary companies. The Company being the holding company and the other Board Members of the respective subsidiaries are taking necessary actions in this regard in accordance with law as legally advised.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements of the Company as of and for the year ended March 31,2023 have also been prepared in the same form and manner as that of the Company and are in accordance with the applicable provisions of the Companies Act, 2013, the rules framed thereunder and Listing Regulations read together with governing Indian Accounting Standard (Ind AS)-110 "Consolidated Financial Statements" and Indian Accounting Standard (Ind AS)-28 "Accounting for Investments in Associates and Joint Ventures" and forms a part of the Annual Report.

The consolidated financial statements for the year ended March 31,2023 have been prepared without considering the financial results of three wholly owned subsidiaries (Unquoted Non-Banking Financial Companies) viz. August Agents Ltd., Insilco Agents Ltd. and Laneseda Agents Ltd. ("the Subsidiaries") due to reasons stated hereinabove.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The particulars of Loans, Guarantees and Investments in pursuance to Section 186 of the Companies Act, 2013 have been disclosed in the financial statements read together with Notes annexed to and forming an integral part of the financial statements.

DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL, ETC.

As required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the statement of disclosure of remuneration and such other details as prescribed therein are given in Annexure-IV which is attached hereto and forms a part of the Directors' Report.

ANNUAL RETURN

Annual Return of the Company as per Section 92(3) of the Companies Act, 2013 is uploaded on website of the Company and the same can be accessed at the weblink: https://www.vtlrewa.com/Annual-Return.pdf.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are given in Annexure-V which is attached hereto and forms a part of the Directors' Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, the information on Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo are given in Annexure-VI which is attached hereto and forms a part of the Directors' Report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions or events concerning the same during the year under review:

(a) The Managing Director of the Company does not receive any remuneration or commission from any of the subsidiaries of the Company.

(b) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its operations in future.

(c) The Company has zero tolerance towards sexual harassment at workplace and has adopted a Policy on prevention prohibition and redressal of sexual harassment at workplace and has also constituted an Internal Complaints Committee(s) in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. During the year under review, no case was filed or reported in pursuance to the provisions of the said Act.

(d) There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

(e) No frauds were reported by the Auditors in terms of Section 143(12) of the Companies Act, 2013 and rules framed thereunder.

(f) The Company has neither filed any application under the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as amended from time to time, nor has availed one time settlement with respect to any loans from banks or financial institutions.

ACKNOWLEDGEMENT

The Board desires to place on record its grateful appreciations for the excellent assistance and co-operation received from the State Government and continued support extended to the Company by the bankers, investors, vendors and esteemed customers, overseas technical collaborator and other business associates/institutions. Your Directors also wish to place on record their sincere thanks and infinite appreciations to all the employees of the Company for their unstinted commitment and valuable contribution for sustainable growth and improved financial performance of the Company.

For and on behalf of the Board of Directors

Harsh V. Lodha Y. S. Lodha
Place : Satna Chairman Managing Director & CEO
Date : May 18, 2023 (DIN: 00394094) (DIN: 00052861)