Nelco Ltd — Interim / Quarterly Report 2021

Oct 19, 2021

19th October 2021

Rotunda Building, Bandra (East) P.J. Towers, Fort, Mumbai – 400 051 Mumbai – 400 001

BSE Limited National Stock Exchange of India Limited Corporate Relationship Dept 5th floor, Exchange Plaza, Plot No.C-1 1st Floor, New Trading Ring, Block "G" Bandra Kurla Complex

BSE Code : 504112 NSE Code : Nelco EQ

Dear Sirs,

Sub: Outcome of Board Meeting

Unaudited Financial Results & Limited Review Report for the Quarter ended 30th September 2021

Further to our letter dated 8th October 2021, we are submitting: -

• 1. Unaudited Standalone Financial Results for the quarter ended 30th September 2021 along with the Limited Review Report by the Statutory Auditors.
• 1. Unaudited Consolidated Financial Results for the quarter ended 30th September 2021 along with the Limited Review Report by the Statutory Auditors.

Both the above have been approved by the Board of Directors at its meeting held on 19th October 2021 which commenced at 2.45 p.m. and concluded at 6.15 p.m.

The said Results along with the Unaudited Standalone Financial Results will be available on Company's website www.nelco.in

The Company will publish the Unaudited Consolidated Financial Results in the prescribed format.

Please take the aforesaid on record.

Thanking you

Yours faithfully, NELCO Limited

Girish V. Kirkinde Company Secretary & Head legal

Encl: As above.

Nelco Limited, EL-6, Electronics Zone, MIDC, Mahape, Navi Mumbai - 400 710, India. Tel: +91 22 6791 8728, 6739 9100 Fax: +91 22 6791 8787 Web: www.nelco.in

NELCO LIMITED

REGD. OFFICE :- EL-6, TTC INDUSTRIAL AREA, MIDC, ELECTRONIC ZONE, MAHAPE, NAVI MUMBAI - 400 710, CIN: L32200MH1940PLC003164

	Statement of Consolidated Unaudited Financial Results for the quarter and six months ended September 30, 2021						(Rs. In Lakhs)
Sr.No.	Particulars	3 Months ended 30.09.2021	Preceding 3 Months ended 30.06.2021	Corresponding 3 Months ended 30.09.2020	6 Months ended 30.09.2021	6 Months ended 30.09.2020	Previous year ended 31.03.2021
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
$\mathbf{1}$	Income
	a) Income from Operations (Refer note 5)	6,122	5,510	5,322	11,632	10,274	22,612
	b) Other Income	24	152	92	176	172	284
	Total Income (a+b)	6,146	5,662	5,414	11,808	10,446	22,896
$\overline{2}$	Expenses
	a) Purchase of stock- in-trade	593	802	742	1,395	1,167
	b) Changes in Inventories of stock-in-trade	229	(337)	(159)	(108)	(369)	2,889 (86)
	c) Employee Benefits Expense	844	876	762	1,720	1,653	3,411
	d) Finance Cost	166	182	245	348	539	953
	e) Depreciation and amortization expense	552	571	546	1,123	1,086	2,230
	f) Transponder Charges	1,435	1,388	1,410	2,823	2,856	5,493
	g) Other expenses (Refer note 4)	1,873	1,568	1,559	3,441	2,956	6,418
	Total Expenses	5,692	5,050	5,105	10,742	9,888	21,308
$\overline{\mathbf{3}}$	Profit before exceptional item and tax (1-2)	454	612	309	1,066	558	1,588
$\overline{4}$	Tax expense
	a) Current Tax (Refer note 3)	154	216	52	370	108	597
	b) Deferred Tax (net) (Refer note 3)	(40)	(42)	35	(82)	44	(245)
5	Net Profit for the period/year (3-4)	340	438	222	778	406	1,236
6	Other Comprehensive Income/(expenses)
	Items that will not be reclassified to Profit or Loss:
	Remeasurement of post employment benefit obligations (net of tax)	$\mathbf{1}$	(64)	10	(63)	$\overline{3}$	28
7	Total Comprehensive Income for the period/year (5+6)	341	374	232	715	409	1,264
8	Paid up equity share capital ( face value Rs. 10/- each)	2,282	2,282	2,282	2,282	2,282	2,282
9	Other Equity						5,319
10	Earnings Per Share (Basic and Diluted) (Face value Rs. 10/-each) (not annualised)	1.49	1.92	0.97	3.41	1.78	5.42
11	Dividend Per Share (Par Value Rs 10 each)
	Final Dividend on Equity Shares (in Rs)	$\sim$	1.20	1.20	1.20	1.20	1.20
	Total Equity Dividend percentage (%)	$\tilde{\phantom{a}}$	12	12	12	12	12

NAVI т п MUMBA □

Notes :- $1$

$\overline{2}$

The Company vide its letter dated September 1, 2017 informed the stock exchange about the approval of the Board of Directors to

(i) transfer by way of slump sale on a going concern basis, for a lump sum consideration to its wholly owned subsidiary, Nelco Network Products Ltd (NNPL) of the following :

(a) Integrated Security and Surveillance Solution ('ISSS') business and

(b) Very Small Aperture Terminals ("VSAT") hardware business and allied services consisting of network management, project management, infrastructure services, turnkey solutions for satellite communication systems, and co-location services to customers other than Tatanet Services Ltd (TNSL); and

(ii) the amalgamation of TNSL with the Company, through a composite scheme of Arrangement and Amalgamation (Proposed Scheme).

The Proposed Scheme has been approved by National Company Law Tribunal ('NCLT') on November 2, 2018. During the quarter ended June 2021 the Company has received approval from Department of Telecommunications (DoT) on June 9, 2021. The scheme is effective from appointment date i.e. April 1, 2017.

Since, the above reorganisation is between the Company (holding company) and its two wholly owned subsidiaries, this has no implication on consolidated financial results of the Company along with its wholly owned subsidiaries

Standalone Financial details	3 Months ended 30.09.2021	Preceding 3 Months ended 30.06.2021	Corresponding 3 Months ended 30.09.2020	6 Months ended 30.09.2021	6 Months ended 30.09.2020	Previous year ended 31.03.2021
	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
Income from Continuing Operations	3,328	3,415	3,164	6,743
Profit before Tax- Continuing and Discontinued Operations	10	559			6,545	13,112
Profit after Tax- Continuing and Discontinued Operations			310	569	556	1,579
		398	222	405	403	1,227
Total Comprehensive Income- Continuing and Discontinued Operations	(6)	334	232	328	406	1,255

As mentioned in Note 1 above, the Group Companies are in the process of finalising revised tax accounts and returns from April 1, 2017 till March 31, 2021 and upon finalisation of the same, any tax impact pursuant to $\overline{3}$ the above will be accounted. Group believes that there will be no material impact on account of tax provisions related to revised tax accounts and returns.

4 During the quarter ended September 30, 2021, the Group has made provision aggregating to Rs 162 Lakhs pertaining to earlier years towards legal dispute and interest liability related to statutory dues.

5 During the quarter ended September 30, 2021, the Group has recognised revenue of Rs 186 Lakhs pertaining to earlier years based on certainty of collection during the quarter.

Based on evaluation of key financial parameters, the Company believes that it operates in only one reportable segment i.e. Network Systems and accordingly the financial results are reported as single reportable 6 segment.

As a part of transition to Goods Services Tax (GST) in June 2017, the Company carried forward the Cenvat/Service tax/Sales tax input credit balance of Rs 31 Lakhs as on September 30, 2021 for future set-off against $7$ GST payable. However, due to technical glitch on the GSTN portal, the Company could not file the Tran 1 Form within the prescribed period including the extended filing period. A writ petition filed by the Company in the Hon'ble High Court of Bombay for allowing the carry forward of the input credit balances was dismissed vide its order dated March 20,2020. Thereby the petition and the claim of the Company of Rs. 31 Lakhs was disallowed. The Company has filed Special Leave Petition in Hon'ble Supreme Court and which is admitted by Supreme Court. Similar writ petition filed by subsidiary which merged with the Company for claim of Rs. 85 Lakhs with Hon'ble High Court of Bombay is pending for hearing. In view of the multiple judgements by various High Courts in India on this matter which supports the Company's claim and based on the advice received from independent legal counsel, the Company expects to recover this input credit balance. In view of this, no provision has been made in the books of account against the recoverability of these balances.

NAVI MI IMBA

(Re In Jokhel

• 8 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Group will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
• Previous period / year figures have been re-grouped or reclassified, to conform to such current period's classification. $\overline{9}$
• 10 The Unaudited Standalone and Consolidated financial results for the quarter ended September 30, 2021, of the Company are available on the Company's website 'www.nelco.in', Bombay Stock Exchange's website "www.bseindia.com" and National Stock Exchange's website "www.nseindia.com".
• 11 The above results have been prepared in accordance with Indian Accounting Standards ('IND AS') notified under Section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting standard) Rules, 2015 and have been reviewed and recommended by the Audit Committee and approved by the Board of Directors at its meeting held on October 19, 2021.

For Nelco Limited R.R.Bhinge

Chairman

łź

DIN: - 00036557

Place :- Mumbai Date :- October 19, 2021

Nelco Limited Consolidated Statement of Assets and Liabilities

		ln
	As at	As at
	September 30, 2021	March 31, 2021
	(Unaudited)	(Audited)
ASSETS
Non-cufient assets
(a) Propeny, plant and equipment	8,113	8,340
1b) Capital work-in-progress	298	406
(.) Ri8ht-of use assets	2,0L4	2,264
(d) lntangible assets	167	17a
(e)Financialassets
(i) lnvestment5	16	16
(ii)Loans		1
(iii) Other financial assets	515	509
(f) Deferred tax assets (net)	819	737
(gllncome tax assets (net)	691	1,535
(h) Other non curent assets	988	12r
Total non current asseta	13,621	14,7O7
Current assets
(a)lnventories	1,246	1,138
(b)Financialassets
(i)Trade receivables	8,198	6,326
(ii)Cash and cesh equivalents	1,O02	916
(iii) gank balancet other thtsn (ii) above	42	3S
(lv)Loans	4	4
(v) Other financial a5sets	318	337
(c) Other current assets	503	347
Totalaurrent assets	11,313	9,103
TOTAL ASSETS	24,934	23,810
EQUIW AND TIABITITIES
EQUITY
(a) Equity share.apatal	2,282	2,282
(b)Other equity
Reserves and surplus	5,744	5,307
Other reserves	12	12
Totalequity	8,042	7,601
UABlrtTtES
on <urrent llabllltlas<="" td="">
(a) Financial liabilities
{i)Borrowints		1,514
(ia)Lease liabilities	1,643	1,864
(ii)Trade payables	167	L67
(blProvision5	379	307
(c) Other non-current liabilities	4	8
Total non-current liabilities	2,L91	3,860
Current llabllltles
(a) Financial liabilities
(i)EorrowinSs	5,170	5,168
(ialLease liabilities	431	4r6
(ii)Trade payables	5,575	3,494
{iii) Other financia I liabilities	888	1,435
(b) Provisions	409	325
(c) Contract liabilities	1,715	1,216
ld) Other.urrent liabilities	511	295
Total current liabilities	14,699	12,349
Totalliabilities	16,892	15,209
TOTAI. EQUITY ANO I.IABII.ITIES	24,934	23,810

Nelco Limited

Consolidated Statement of Cash Flow for the six months ended September 30, 2021

Particulars	Six months ended September 30, 2021	Six months ended September 30, 2020
	Unaudited	Unaudited
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax	1,066	558
Adjustments to reconcile profit before tax to net cash flows
Depreciation and amortisation expense	1,123	1,086 539
Finance Costs	348	72
Unrealised mark to market (gain) / loss on forward contracts	(32)	(129)
Unrealised foreign exchange (gain) / loss (net)	21	50
Impairment allowance (allowance for bad and doubtful debts)	59	(33)
Gain on disposal of property, plant and equipment (net)	(4)	(5)
Unwinding of discount on financial asset measured at amortised cost	(8)	(2)
Interest Income classified as investing cash flow	(8) (156)	(80)
Interest income	2,409	2,056
Operating Profit Before Working Capital Changes
Movement in working capital	(1,930)	242
- (Increase) / Decrease in trade receivables	(156)	(595)
- (Increase) / Decrease in other current assets	(259)	479
- (Increase) / Decrease in other non current assets	(108)	(369)
- (Increase) / Decrease in inventories	19	72
- (Increase) / Decrease in other financial assets - current	(6)	(52)
- (Increase) / Decrease in other financial assets -non current - (Increase) / Decrease in other bank balances	(7)
- (Decrease) / Increase in trade payables	2,059	805
- (Decrease) / Increase in other financial liabilities - non current		(1)
- (Decrease) / Increase in other liabilities - non current	(4)	(4)
- (Decrease) / Increase in provisions - non current	72	129
- (Decrease) / Increase in other financial liabilities - current	(310)	(346)
- (Decrease) / Increase in current contract liabilities	499	761
- (Decrease) / Increase in other current liabilities	216	76
- (Decrease) / Increase in provisions - current	21	(263)
Cash generated from operations	2,515	2,990
- Direct taxes paid (net of refunds)	474	566
Net cash flow generated from / (used in) operating activities (A)	2,989	3,556
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment / intangible assets/Capital work-in-progress	(750)	(476)
Proceeds from sale of property, plant and equipment / intangible assets	14	33
Interest received	164	82
Net cash flow generated from / (used in) investing activities (B)	(572)	(361)
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowings
- Receipts	6,600	3,812 (6, 845)
- Payments	(7, 386)	1,549
Proceeds from sales and lease back	(206)	(168)
Payment of principal portion of lease liabilities	(53)	(38)
Payment of interest portion of lease liabilities	(289)	(495)
Finance costs paid	(271)	(275)
Dividend Paid (including divided distribution tax) Net cash flow generated from / (used in) financing activities (C)	(1,605)	(2,460)
	812	735
Net (Decrease) / increase in Cash & Cash Equivalents [(A)+(B)+(C)]	190	253
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year	1,002	988

Nelco Limited
Consolidated Statement of Cash Flow for the six months ended September 30, 2021

$nelco^{\mathcal{O}}$

(Rs. In Lakhs)

Cash and Cash Equivalents Comprise of:	As at September 30, 2021	As at September 30, 2020
a) Balance with scheduled banks in current accounts	578	574
b) Cash on Hand
c) Cheques on Hand	424	413
Total	1,002	988

$L^{3}$

S.R. BATLIBOL& ASSOCIATES LLP

Chartered Accountants

12th Floor, The Ruby 29 Senapati Bapat Marg Dadar (West) Mumbai - 400 028, India Tel: +91 22 6819 8000

Independent Auditor's Review Report on the Quarterly and Year to Date Unaudited Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

Review Report to The Board of Directors Nelco Limited

• 1. We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results of Nelco Limited (the "Holding Company" or "the Company") and its subsidiary (the Holding Company and its subsidiary together referred to as "the Group") for the quarter ended September 30, 2021 and year to date from April 1, 2021 to September 30, 2021 (the "Statement") attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the "Listing Regulations").
• 1. This Statement, which is the responsibility of the Holding Company's Management and approved by the Holding Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) "Interim Financial Reporting" prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
• 1. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities and Exchange Board of India under Regulation 33(8) of the Listing Regulations, to the extent applicable.

• 1. The Statement includes the results of the subsidiary Nelco Network Products Limited.
• 1. Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with recognition and measurement principles laid down in the aforesaid Indian Accounting Standards ('Ind AS') specified under Section 133 of the Companies Act, 2013, as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

KEDIA

Digitally signed by VINEET KEDIA DN: cn=VINEET KEDIA, c=IN, o=Personal, Date: 2021.10.19 16:14:11 +05'30' VINEET

(Rs in Lakhs)

NELCO LIMITED

REGD. OFFICE :- EL-6, TTC INDUSTRIAL AREA, MIDC, ELECTRONIC ZONE, MAHAPE, NAVI MUMBAI - 400 710, CIN: L32200MH1940PLC003164 $1.16$ and $20.2031$

Sr.No.	Statement of Standalone Unaudited Financial Results for the quarter and six months ended September 30, 2021 Particulars	3 Months ended 30.09.2021	Preceding 3 Months ended 30.06.2021	Corresponding 3 Months ended 30.9.2020	6 Months ended 30.09.2021	6 Months ended 30.09.2020	Previous Year ended 31.03.2021
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited (Refer note 1)
$\mathsf{A}$	Continuing Operations
$\mathbf{1}$	Income				6,743	6,545	13,112
	a) Income from Operations	3,328	3,415	3,164 44	149	80	152
	b) Other Income	11	138		6,892	6,625	13,264
	Total Income (a+b)	3,339	3,553	3,208
$\overline{2}$	Expenses	1,932	1,874	1,831	3,806	3,715	7,181
	a) Operating expenses	533	554	405	1,087	905	1,899
	b) Employee Benefits Expense	43	61	122	104	268	438
	c) Finance Cost	212	213	205	425	399	809
	d) Depreciation and amortization expense	57	32	28	89	53	129
	e) Sub Contracting Expenses	552	376	376	928	737	1,559
	f) Other expenses (Refer note 4)	3,329	3,110	2,967	6,439	6,077	12,015
	Total Expenses Profit before tax from continuing operations (1-2)	10	443	241	453	548	1,249
3
$\overline{a}$	Tax expense	6	140	99	146	155	346
	a) Current Tax (Refer note 3)	(3)	(8)	(14)	(11)	(5)	(21)
	b) Deferred Tax (Refer note 2 and 3)	$\overline{7}$	311	156	318	398	924
5	Net Profit from Continuing Operations (3-4)
B	Discontinued Operations (Refer note 1)			69	116	8	330
6	Profit before tax from discontinued operations		116
7	Tax Expense of discontinued operations			$\overline{\mathbf{3}}$	55		251 3
	a) Current Tax		55		(26)		(224)
	b) Deferred Tax (Refer note 2)		(26) 87	66	87		303 5
8	Net Profit from Discontinued Operations (6-7)	i.
		$7\overline{ }$	398	222	405	403	1,227
9	Net Profit for the period/year (5+8)
10	Other Comprehensive Income/(expenses)
	Items that will not be reclassified to Profit or Loss- Continuing Operations (net of tax)	(13)	(72)	5	(85)		13 $\overline{\mathbf{3}}$
			8	$\overline{5}$	8		15
	Items that will not be reclassified to Profit or Loss-Discontinued Operations (net of tax)	(13)	(64)	10	(77)		28 $\overline{\mathbf{3}}$
	Other Comprehensive Income/(expenses)	(6)	334	232	328	406	1,255
11	Total Comprehensive Income for the period/year (9+10)
12	Paid up equity share capital (face value Rs.10/-each)	2282	2282	2282	2282	2282	2,282 5,394
13	Other Equity
14	Earnings Per Share (Basic and Diluted) (Face Value Rs. 10/-each) (not annualised)				1.39	1.74	4.05
	From Continuing Operations	0.03	1.36	0.68 0.29	0.38	0.02	1.3
	From Discontinued Operations	$\sim$	0.38 1.74	0.97	1.77	1.76	5.38
	From Continuing and Discontinued Operations	0.03
15	Dividend Per Share ( Par Value Rs 10 each )	$\sim$	1.20	1.20	1.20	1.20	1.20
	Final Dividend on Equity Shares ( in Rs)	$\sim$	12	12	12		$\mathbf{1}$ 12
	Total Fourty Dividend percentage (%)

NAVI
MUMBAI Ш

Notes : -

The Company vide its letter dated September 1, 2017 informed the stock exchange about the approval of the Board of Directors to $1$

(i) transfer by way of slump sale on a going concern basis, for a lump sum consideration to its wholly owned subsidiary, Nelco Network Products Ltd (NNPL) of the following : (a) Integrated Security and Surveillance Solution ('ISSS') business and

(b) Very Small Aperture Terminals ("VSAT") hardware business and allied services consisting of network management, project management, infrastructure services, turnkey solutions for satellite communication systems, and co-location services to customers other than Tatanet Services Ltd (TNSL); and

(ii) the amalgamation of TNSL with the Company, through a composite scheme of Arrangement and Amalgamation (Proposed Scheme).

The Proposed Scheme has been approved by National Company Law Tribunal ('NCLT') on November 2, 2018. During the quarter ended June 2021 the Company has received approval from Department of Telecommunications (DoT) on June 9, 2021 on Proposed Scheme. The scheme is effective from appointment date i.e. April 1, 2017. Pursuant to approval, the Proposed Scheme has been accounted for as follows:

. Discontinued operations has been transferred to NNPL in accordance with IND AS 105. Considering the materiality and convenience reason, demerger impact is given from June 1, 2021; and . TNSL merger has been accounted in accordance with Appendix C of IND AS 103 "Business Combination" and accordingly, results of all the previous periods have been restated by including results of the Transferor Company from the beginning of the previous year i.e. April 1, 2020.

						(RS IN Lakns)
Particulars	3 Months ended 30.09.2021	Preceding 3 Months ended 30.06.2021	Corresponding 3 Months ended 30.9.2020	6 Months ended 30.09.2021	6 Months ended 30.09.2020	Previous Year ended 31.03.2021
	Unaudited (Refer note above)	Unaudited (Refer note above)	Unaudited	Unaudited	Unaudited	Audited
Income from Operations including other income		1,419	2,220	1,419	3,834	9,657
Expenses		1,303	2,151	1,303	3,826	9,327
Profit before Tax		116	69	116		330
Tax Expense
a) Current Tax		55		55		251
b) Deferred Tax		(26)		(26)		(224)

Deferred tax credit has been reclassified from continued operations to discontinued operations during the quarter and year ended March 31, 2021. Deferred tax pertaining to discontinued operations has $\overline{2}$ been recognised under tax expense of discontinued operations.

As mentioned in Note 1 above, the Company is in the process of finalising revised tax accounts and returns from April 1, 2017 till March 31, 2021 and upon finalisation of the same, any tax impact pursuant $\overline{3}$ to the above will be accounted. Company believes that there will be no material impact on account of revised tax provisions related to revised tax accounts and returns.

During the quarter ended September 30, 2021, the Company has made provision aggregating to Rs 162 Lakhs pertaining to earlier years towards legal dispute and interest liability related to statutory dues. $\mathbf{A}$

5 As a part of transition to Goods Services Tax (GST) in June 2017, the Company carried forward the Cenvat/Service tax/Sales tax input credit balance of Rs 31 Lakhs as on September 30, 2021 for future setoff against GST payable. However, due to technical glitch on the GSTN portal, the Company could not file the Tran 1 Form within the prescribed period including the extended filing period. A writ petition filed by the Company in the Hon'ble High Court of Bombay for allowing the carry forward of the input credit balances was dismissed vide its order dated March 20,2020. Thereby the petition and the claim of the Company of Rs. 31 Lakhs was disallowed. The Company has filed Special Leave Petition in Hon'ble Supreme Court and which is admitted by Supreme Court. Similar writ petition filed by subsidiary which merged with the Company for claim of Rs. 85 Lakhs with Hon'ble High Court of Bombay is pending for hearing. In view of the multiple judgements by various High Courts in India on this matter which supports the Company's claim and based on the advice received from independent legal counsel, the Company expects to recover this input credit balance. In view of this, no provision has been made in the books of account against the recoverability of these balances.

Based on evaluation of key financial parameters, the Company believes that it operates in only one reportable segment i.e. Network Systems and accordingly the financial results are reported as single 6 reportable segment.

• 7 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
• As stated in note 1, previous period / year figures have been re-grouped or reclassified, to conform to such current period's classification. 8
• The above results have been prepared in accordance with Indian Accounting Standards ('IND AS') notified under Section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting standard) Rules, 2015 and have been reviewed and recommended by the Audit Committee and approved by the Board of Directors at its meeting held on October 19, 2021. 9

For Nelco Limited R.R.Bhinge

Chairman DIN :- 00036557

$\frac{1}{2}$

Place :- Mumbai Date: - October 19, 2021

Nelco Limited

Standalone Statement of Assets and Liabilities

			{Rs.ln Lakhs)
ASSETS
Non-current assets		3,494	3,642
(a)Property, Plant and equiPment		273	362
(b) CaPital work'in-Progress (c) Right'of-use assets		359	421
(d) lntangible assets		151	170
(e) Financialassets			2,799
li)lnvestments		2,A94	1
(ii) Loans		274	135
(iii) Other financial assets		361	350
(f) Deferred tax assets (net)		719	1,535
(B) lncome tax assets (net)		980	713
(h) Other non'current assets
Current assets
(a)Financialassets
(i)Trade receivables		3,812	5,443 912
(rr)Ca5h and cash equrvalenl9		529 42	35
{Ir)BBnI balances olhel than {rr)above		2	1
(iv) Loans		3,530	2,620
(v) Other financial assets		415	288
(b) Other current assets
EQUITY AND I.IABIIITI€5 EQUITY (a) Equity share €aPital (b) Other equitY Reserve and surplus Other reserves LtAE -tTl€s
Non-aurrent liabilities (a) Financial liabilities
(i) Lease liabilities
(b)Provisrons
Current liabilities
(a) f inancial liabilities
(i) Borrowings		t,470	1,a67 119
(ialLease liabilities		127	3,799
(ii)Trade PaYables		3,625	3,173
(iii) Other financial liabilities		283	175
(b) Provisions		1,423	1,848
(c) Contract tiabilities (d) other current liabilities		472	285

a

$nelco^{\circ}$

Nelco Limited

Standalone Statement of Cash Flows for the six months ended September 30, 2021

(Rs. In Lakhs)

Particulars	Year ended September 30, 2021	Year ended September 30, 2020
	Unaudited	Unaudited
A. CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax from
Continuing operations	453	548 8
Discontinued operations (Refer note 1 of results)	116 569	556
Profit before tax
Adjustments to reconcile profit before tax to net cash flows	425	399
Depreciation and amortisation expense	104	268
Finance costs	(136)	(47)
Interest income		43
Impairment allowance (allowance for bad and doubtful debts)	(1)	(7)
Unrealised foreign exchange (gain) / loss (net)	961	1,212
Operating profit before working capital changes
Movement in working capital - (Increase) / decrease in trade receivables	1,631	(1,019)
- (Increase) / decrease in financial assets - current - Loans	(1)	6
- (Increase) / decrease in financial assets - non-current - Loans	$\mathbf{1}$
- (Increase) / decrease in other financial assets - current	(1,005)	138
- (Increase) / decrease in other financial assets - Non Current	(139)	(92)
- (Increase) / decrease in other current assets	(127)	(52)
- (Increase) / decrease in other non current assets	(267)	$\overline{2}$
- (Decrease) / increase in trade payables	(173)	1,505
- (Decrease) / increase in other financial liabilities - non current		(1)
- (Decrease) / increase in provisions - non current	62	(90)
- (Decrease) / increase in other financial liabilities - current	(545)	692
- (Decrease) / increase in contract liabilities	(425)	561 76
- (Decrease) / increase in other current liabilities	187	(9)
- (Decrease) / increase in provisions - current	31	2,929
Cash generated from operations	191	565
- Direct taxes paid (net of refunds)	581 772	3,494
Net cash flow generated from operating activities (A)
B. CASH FLOWS FROM INVESTING ACTIVITIES		(1, 299)
Purchase of property, plant and equipment / intangible assets/Capital work-in-progress	(455) 136	47
Interest received	(7)
Bank Balance not considered as cash and cash equivalents- deposits placed	(326)	(1, 252)
Net cash flow generated from / (used in) investing activities (B)
C. CASH FLOWS FROM FINANCING ACTIVITIES	2,400	2,000
Proceeds from borrowings	(2,070)	(2,925)
Repayment of borrowings	(57)	(51)
Payment of principal portion of lease liabilities	(19)	(24)
Payment of interest portion of lease liabilities	(86)	(235)
Finance costs paid	(271)	(275)
Dividend paid (including dividend distribution tax) Net cash flow generated from / (used in) financing activities (C)	(103)	(1, 510)
	343	732
Net (decrease)/increase in cash & cash equivalents [(A)+(B)+(C)] Cash and cash equivalents at the beginning of the year	186	253
Cash and cash equivalents at the end of the year	529	985

$\sqrt{k}$

Nelco Limited Standalone Statement of Cash Flows for the six months ended September 30, 2021

(Rs. In Lakhs)

Cash and cash equivalents comprise of :	As at September 30, 2021	As at September 30, 2020
a) Balance with scheduled banks in current accounts	480	571
b) Cash on hand
c) Cheques on hand	48	413
Total	529	985

S.R. BATLIBOL& ASSOCIATES LLP Chartered Accountants

12th Floor, The Ruby 29 Senapati Bapat Marg Dadar (West) Mumbai - 400 028, India Tel: +91 22 6819 8000

Independent Auditor's Review Report on the Quarterly and Year to Date Unaudited Standalone Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

Review Report to The Board of Directors Nelco Limited

• 1. We have reviewed the accompanying statement of unaudited standalone financial results of Nelco Limited (the "Company") for the quarter ended September 30, 2021 and year to date from April 1, 2021 to September 30, 2021 (the "Statement") attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Requlations, 2015, as amended (the "Listing Requlations").
• 1. This Statement, which is the responsibility of the Company's Management and approved by the Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) "Interim Financial Reporting" prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
• 1. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
• 1. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standards ('Ind AS') specified under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

KEDIA

Digitally signed by VINEET KEDIA DN: cn=VINEET KEDIA, c=IN, o=Personal, Date: 2021.10.19 16:13:14 +05'30' VINEET