Nelco Ltd — Interim / Quarterly Report 2021

Jan 28, 2021

28th January 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 Listing 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 for the Quarter and Nine Months ended 31st December 2020

Further to our letter dated 15th January 2021, we are submitting: -

• i) Unaudited Standalone Financial Results; and
• ii) Unaudited Consolidated Financial Results

for the quarter and Nine Months ended 31st December 2020 which were approved by the Board of Directors of the Company at its meeting held today. The Board meeting commenced at 3.45 pm and concluded at 5.45 pm.

Also enclosed copy each of the Limited Review reports on the aforesaid results.

These are also being made available on the website of the Company at www.nelco.in.

The consolidated results shall be published in one English and one vernacular newspaper as required.

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 CIN No.L32200MH1940PLC003164; Email ID:-services@nelco.in A TATA Ian orprfao

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 nine month ended December 31, 2020						(Rs. In Lakhs)
r--- Sr.No. L__	I Particulars	r 3 Months ended 31.12.2020	Preceding 3 Months ended 30.09.2020 I	I Corresponding 3 Months ended 30.12.2019	9 Months ended 31.12.2020	9 Months ended 31.12.2019 I	l T Previous Year ended 31.03.2020
		I Unaudited	-~ I Unaudited	Unaudited	l Unaudited	Unaudited	Audited
'----		1	I		l
- 1	Income	I	I		I
	a) Income from Operations	I 5,855	I 5,322	5,636	I 16,129	15,870	21,993
'	b) Other Income	I 29	92 I	74	I 201	213	259 -
' '	Total Income (a+b)	I 5,884	I 5,414	5,710	I 16,330	16,083	22,252 -
f-------		l	'---		I
2 -	Expenses ~	l	'---		I
	a) Purchase of stock- in-trade	l 793	=+ 742	778	I 1,960	2,869	3,374
	b) Changes in Inventories of stock-in-trade	I 112	I (159)	1	I (257)	(438)	(263)
e----	c) Employee Benefits Expense ~	I 812	762	849	I 2,465	2,508	3,361
e----	d) Finance Cost ~	I 222 I	245	344 -	I 761	956	1,323 -
e----	e) Depreciation and amortization expense L__ f) Transponder Charges	555 l 1,332	546 1,410	510 - 1,042	I 1,641 I 4,188	1,467 2,864	2,002 - 4,241
~	g) Other expenses	I 1,658	I 1,559	1,611	I 4,614	4,646	- 6,303
	Total Expenses	I 5,484	I 5,105	5,135	I 15,372	14,872	- 20,341
		I	I	*	I		-
3	Profit before exceptional item and tax (1-2)	I 400	I 309	575 -	I 958	1,211	- 1,911 -
		I		-	I		-
4	Exceptional Item ( Refer note 3)	l -	1 -	-~ -	I -	115	115 -
		I	1		l		-
5	Profit before tax (3+4)	I 400 I	I 309 I	575	I 958 I	1,326	2,026 -
' 6	Tax expense	I	I		-~ I		-
	a) Current Tax	I 196	l 52	74	l 304	341	- 499
	b) Deferred Tax (net) ( Refer note 4)	I (178)	1 35	- 136	'-- (134)	129	- 89
7	Net Profit for the period (5-6)	I 382	l 222	- 365	I 788	856	- 1,438 -
		I	I		I		-
8	Other Comprehensive Income	I	I		I		-
'	Items that will not be reclassified to Profit or Loss:	I	I		I		-
	Remeasurement of post employment benefit obligations (net of tax)	I 7	I 10	9	I 10	(25)	(31) -
9	Total Comprehensive Income for the period (7+8)	I 389	I 232	374	798	+ 831	1,407 -
10	Paid up equity share capital ( face value Rs.10/- each)	I 2,282	I 2,282	2,282	2,282	2,282	2,282 -
11	Other Equity	I	I			t	4,307 -
12	Earnings Per Share (Basic and Diluted) (Face value Rs. 10/-each) (not annualised)	I 1.67	l 0.97	1.60	3.45	3.75 -	6.30 -
13	Dividend Per Share ( Par Value Rs 10 each )	I	l			-	-
~	Final Dividend on Equity Shares ( in Rs)	I -	l 1.20	-	1.20	1.50 -	1.50 -
1~	Total Equity Dividend percentage (%)	I -	l 12	-	12	15	- 15

1 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 and approval from Department of Telecommunications (DoT) is awaited. 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.

2 NCLT approved the Proposed Scheme on November 2, 2018. As per the NCLT Order, this Scheme is effective only on receiving the written approval from the Department of Telecommunications (DoT) for transfer of licenses. The NCLT Order required the Company to file the Order with the Registrar of Companies (RoC) within 30 days. Upon filing, RoC updated the records to reflect the Scheme as effective and TNSL as "amalgamated" even though DoT approval is awaited. Based on legal advice, the Company has approached NCLT to direct the RoC to amend their records to reinstate TNSL to its earlier status and cancel the effect of the scheme with immediate effect. The decision of NCLT is awaited. Pending necessary approvals, the Scheme has not been given effect to in the financial results for the for the quarter and nine month ended December 31, 2020.

In addition to standalone financial results the board of directors has also approved the consolidated financial results of the Group wherein the results of TNSL are included in the consolidated financial results.

3 During the year ended March 31, 2020, the Company sold investments in Nelito Systems Limited (associate company), which was classified as assets held for sale in the previous year. The resultant gain on sale of investments has been disclosed as an exceptional item in the financial results of the quarter and half year ended September 30, 2019 and year ended March 31, 2020.

5	Standalone Financial details	3 Months ended 31.12.2020	Preceding 3 Months ended 30.09.2020	Corresponding 3 Months ended 30.12.2019	9 Months ended 31.12.2020	9 Months ended 31.12.2019	Previous Year ended 31.03.2020
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
	Income from Continuing Operations	948	922	979	2,801	2,816	3,833
	Profit before Tax- Continuing and Discontinued Operations	324	230	335	610	1,629	1,793
	Profit after Tax- Continuing and Discontinued Operations	331	162	205	522	1,199	1,368
	Total Comprehensive Income- Continuing and Discontinued Operations	338	172	214	532	1,174	1,337

4 Out of net deferred tax of Rs 178 lakhs recognised for the quarter ended December 31, 2020 and Rs. 134 lakhs for nine months ended December 31, 2020 includes Rs. 94 lakhs pertains to earlier periods.

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

• 7 The Company and its subsidiaries ("the Group") has considered the possible effects that may result from COVID-19 in the preparation of these interim financial results. The Group continued to provide VSAT connectivity and maintenance services and VSAT equipment on lease, however the deployment of new VSATs was lower than previous year due to slower economic revival across various sectors and restrictions in movement during in the past nine months. Considering the revival of economic activity in the current quarter, improvement in customer order flow and based on the information available, the management has evaluated and considered the possible impact of the aforesaid situation on the business of the Group, including adjustment to the financial results. Considering the above and Group's current financial position, there is no material uncertainty on the Group's ability to do business as a going concern and there are no impairment indicators for any of the assets of the Group. The Group continues to monitor any material changes to future economic conditions and they may be different from the estimates made as on the date of the financial results.
• 8 As a part of transition to Goods and Services Tax (GST) in June 2017, the Company and its subsidiary carried forward the Cenvat/Service tax/Sales tax input credit balance for future set-off against GST payable aggregating to Rs. 116 Lakhs. However, due to technical glitch on the GSTN portal, the Company and its subsidiary could not file the Tran 1 Form within the prescribed period including the extended filing period. The Company and its subsidiary filed a writ petition in the Hon'ble High Court of Bombay for allowing the carry forward of the input credit balances. However, vide its order dated March 20,2020, the petition was dismissed and the claim of the Company was disallowed. With respect to its subsidiary, the petition is pending for hearing with the Hon'ble High Court of Bombay. 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. The Company has filed Special Leave Petition in Hon'ble Supreme Court and which has been admitted by Supreme Court. In view of this, no provision has been made in the books of account against the recoverability of these balances.

Notes :-

• 9 The Unaudited Standalone and Consolidated financial results for the quarter and nine month ended December 31, 2020, 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" .
• 10 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.
• 11 Previous period / year figures have been re-grouped or reclassified, to conform to such current period's classification.
• 12 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 January 28, 2021.

For Nelco Limited

R.R.Bhinge

Place :- Mumbai Chairman Date :- January 28, 2021 DIN :- 00036557

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 subsidiaries (the Holding Company and its subsidiaries together referred to as "the Group") for the quarter ended December 31, 2020 and year to date from April 1, 2020 to December 31, 2020 (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/CMDl/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 following subsidiaries: (a) Tatanet Services Limited and (b) 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.

1. We draw your attention to the following:

2. a) Note 2 to the financial results regarding composite scheme of arrangement between the Company, Tatanet Services Limited (TNSL) and Nelco Network Products Limited which was approved by the National Company Law Tribunal ("NCL T") vide its order dated November 2, 2018 (the "Scheme"). As per the NCL T Order, the Company intimated the Registrar of the Companies ("RoC") about the approval of the Scheme by NCLT, stating that Department of Telecommunications ("DoT") approval was not yet obtained. The RoC records were, however, updated to reflect the Scheme as effective and TNSL as "amalgamated" with the Company. Based on legal advice obtained by the Company, the Company has approach NCL T to direct the Roe to amend their records to reinstate TNSL to its earlier status and cancel the effect of the Scheme with immediate effect. The decision of NCL Tis awaited. The scheme will be given effect to in the financial results on receipt of all necessary approval.

3. b) Note 8 to the financial results regarding the input tax credit balances under the Cenvat/Service tax/Sales tax considered fully recoverable by the management and no provision made against the same in the books based on the legal advice obtained and the special leave petition filed by the Company with the Hon'ble Supreme Court of India against the order passed by the Hon'ble High Court of Bombay disallowing the Company's claim to carry forward these balances on transition to Goods and Services Tax (GST) for future setoff against GST payable. With respect to its subsidiary, the petition is pending for hearing with the Hon'ble High Court of Bombay.

Our conclusion is not modified in respect of these matters.

1. The comparative consolidated financial information of the Company for the corresponding quarter December 31, 2019 were reviewed by the predecessor auditor and the consolidated financial statements of the Company for the year ended March 31 , 2020, were audited by predecessor auditor who expressed an modified opinion on financial information for the corresponding quarter December 31, 2019 on January 23, 2020 and modified opinion on financial information for the year ended March 31, 2020 on May 16, 2020.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm registration number: 101049W/E300004

VINEET KEDIA

Digitally signed by VINEET KEDIA DN: cn=VINEET KEDIA, c=IN, o=Personal, email=vineet.kedia@srb.in Date: 2021.01.28 16:27:39 +05'30'

per Vineet Kedia Partner Membership No.: 212230 UDIN: 21212230AAAAAJ3574

Place: Mumbai Date: January 28, 2021

Statement of Standalone Unaudited Financial Results for the quarter and nine months ended December 31, 2020 Rs in Lakhs

	Rs in Lakhs Statement of Standalone Unaudited Financial Results for the quarter and nine months ended December 31, 2020 r-------i.-----
Sr.No.	Particulars	3 Months ended 31.12.20	T Preceding 3 Months ended 30.09.20	Corresponding 3 Months ended 31.12.2019	9 Months ended 31.12.2020	---;-- 9 Months ended 31.12.2019	Previous Year 1 ended 31.03.2020
		Unaudited	- Unaudited	Unaudited	Unaudited	Unaudited	Audited
			---1--- -			- -
A	Continuing Operations
1	I Income	I			I
-	a) Income from Operations I	I 948	922	979	I 2,801	2,816	3,833
-	b) Other Income I	7 I	41	68	I 83	202	241
- -	Total Income (a+b) I	I 955	963	1,047	I 2,884	3,018	4,074
	I	--I-- I
2	~ Expenses ---		-		I	==~====
	a) Employee Benefits Expense	463	405	447 158	1,368 231	1,283 400	1,748 ~ 508
	b) Finance Cost I	57	77 14		1 44	- 47	72
	~ c) Depreciation and amortization expense d) Sub Contracting Expenses	15 I 38	28	14 25	91	74	=l 107
	e) Other expenses I	I 272	279	282	763	809	1,092
	Total Expenses I	845 I	803	926	2,497	----t----~- 2,613	3,527
3	Profit before exceptional item and tax (1-2)	110 I	160	121	387	405	547
	I
4	Exceptional Item ( Refer note 3)	-	-	-	] -	====---~ 564	564
							~
5	Profit before tax from continuing operations (3+4)	110	160	121	387	969	1,111
	~ I	l
6	Tax expense I	I			I
'-----	a) Current Tax I	42 I	86	6	I 138	=~-=-1 131	144
	I b) Deferred Tax ( Refer note 4)	(126) I	(21)	113	I (130)	146	140
7	I Net Profit from Continuing Operations (5-6)	194 I	95	2	379	692	827
B 8	Discontinued Operations ( Refer note 1) Profit / (Loss) before tax from discontinued operations	214	70	214	223	660	682
9	Tax Expense of discontinued operations	77	3	11	80	153	141
10	I Profit / (Loss) after tax from Discontinued Operations (8-9)	137	67	203	I 143	507	541
	I	-	-		I -
11	I Net Profit for the period (7+10)	331	162	205	I 522	1,199	I 1,368
	I
12	~ - ~ Other Comprehensive Income	-				~	-~
	Remeasurement of post employment benefit obligations (net of tax):						__
	Items that will not be reclassified to Profit or Loss- Continuing Operations (net of tax)	3	5	6	6	(15)	(22)
	Items that will not be reclassified to Profit or Loss- Discontinued Operations (net of tax)	4	5	3	4	(10)	(9)
	Other Comprehensive Income	7	10	9	10	(25)	(31)
13	Total Comprehensive Income for the period (11+12)	338	172	214	532	1,174	1,337
	'	I
14	I Paid up equity share capital ( face value Rs.10/- each)	2,282 I	2,282	2,282	2,282	2,282	2,282
15	I Other Equity I	I I					2,854
16	Earnings Per Share (Basic and Diluted) (Face Value Rs. 10/-each) (not annualised) I	I			I
	From Continuing Operations	I 0.85	0.42	0.01	I 1.66	3.03	3.63
	From Discontinued Operations	0.60 I	0.29	0.89	0.63	2.22	2.37
	I From Continuing and Discontinued Operations	1.45	0.71	0.90	2.29	____L_l~ 5.25	6.00
17	I Dividend Per Share ( Par Value Rs 10 each )						7
	Final Dividend on Equity Shares ( in Rs)	-	1.20	-	1.20	1.50	1.50
	Total Equity Dividend percentage (%)	-	12	-	12	15	15

Notes : -

• 1 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 and approval from Department of Telecommunications (DoT) is awaited. Considering the management's intent to transfer the business as noted in (i) above, these businesses/ operations have been classified as discontinued operations in accordance with IND AS 105.

The financial parameters in respect of the activities attributable to the business referred to in (i) above are as follows :

r---						Rs in Lakhs
Particulars I---	3 Months ended 31.12.20 I	l Preceding 3 Months ended 30.09.20	I Corresponding 3 Months ended 31.12.2019	T 9 Months ended 31.12.2020	I 9 Months ended 31.12.2019	l l Previous Year ended 31.03.2020 -
	I Unaudited	I Unaudited	Unaudited	Unaudited	Unaudited	l Audited
Income from Operations including other income	I 2,781	I 2,220	3,431	6,615	8,896	l 11,322
Expenses	I 2,567	I 2,150	3,217	6,392	8,236	I 10,640
Profit/ (Loss) before Tax	I 214	I 70	214	223	660	I 682
I Tax Expense	I 77	I I 3	11	I 80	I 153	I 141 "1

2 NCLT approved the Proposed Scheme on November 2, 2018. As per the NCLT Order, this Scheme is effective only on receiving the written approval from the Department of Telecommunications (DoT) for transfer of licenses. The NCLT Order required the Company to file the Order with the Registrar of Companies (RoC) within 30 days. Upon filing, RoC updated the records to reflect the Scheme as effective and TNSL as "amalgamated" even though DoT approval is awaited. Based on legal advice, the Company has approached NCLT to direct the RoC to amend their records to reinstate TNSL to its earlier status and cancel the effect of the scheme with immediate effect. The decision of NCLT is awaited. Pending necessary approvals, the Scheme has not been given effect to in the financial results for the quarter and nine months ended December 31, 2020.

3 During the year ended March 31, 2020, the Company sold investments in Nelito Systems Limited (associate company), which was classified as assets held for sale in the previous year. The resultant gain on sale of investments has been disclosed as an exceptional item in the financial results of the nine motnhs and quarter ended December 31, 2019 and year ended March 31, 2020.

• 4 Out of net deferred tax of Rs 126 lakhs recognised for the quarter ended December 31, 2020 and Rs. 130 lakhs for nine months ended December 31, 2020 includes Rs. 94 lakhs pertains to earlier periods.
• 5 The Company has considered the possible effects that may result from COVID-19 in the preparation of these interim financial results. The Company continued to provide VSAT related services. However, the deployment of new VSATs was lower than previous year due to slower economic revival across various sectors and restrictions in movement during in the past nine months. Considering the revival of economic activity in the current quarter, improvement in customer order flow and based on the information available, the management has evaluated and considered the possible impact of the aforesaid situation on the business of the Company, including adjustment to the financial results. Considering the above and Company's current financial position, there is no material uncertainty on the Company's ability to do business as a going concern and there are no impairment indicators for any of the assets of the company. The Company continues to monitor any material changes to future economic conditions and they may be different from the estimates made as on the date of the financial results.
• 6 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 December 31, 2020 for future set-off 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. The Company filed a writ petition in the Hon'ble High Court of Bombay for allowing the carry forward of the input credit balances. However, vide its order dated March 20,2020, the petition was dismissed and the claim of the Company was disallowed. 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. The Company has filed Special Leave Petition in Hon'ble Supreme Court and which is admitted by Supreme Court. In view of this, no provision has been made in the books of account against the recoverability of these balances.
• 7 Based on evaluation of key financial parameters, the Company believes that it operates in only one reportable segment i.e. Network Systems and accordingly the financial results are reported as single reportable segment.
• 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 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.

9 Previous period / year figures have been re-grouped or reclassified, to conform to such current period's classification.

10 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 January 28, 2021.

For Nelco Limited

R.R.Bhinge

Place :- Mumbai Chairman Date :- January 28, 2021 DIN :-00036557

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 December 31, 2020 and year to date from April 1, 2020 to December 31, 2020 (the "Statement") attached herewith, being submitted by the 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 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.
• 1. We draw your attention to the following:
• a) Note 2 to the financial results regarding composite scheme of arrangement between the Company, Tatanet Services Limited (TNSL) and Nelco Network Products Limited which was approved by the National Company Law Tribunal ("NCL T") vide its order dated November 2, 2018 (the "Scheme"). As per the NCL T Order, the Company intimated the Registrar of the Companies ("RoC") about the approval of the Scheme by NCL T, stating that Department of Telecommunications ("DoT") approval was not yet obtained. The RoC records were, however, updated to reflect the Scheme as effective and TNSL as "amalgamated" with the Company. Based on legal advice obtained by the Company, the Company has approach NCL T to direct the RoC to amend their records to reinstate TNSL to its earlier status and cancel the effect of the Scheme with immediate effect. The decision of NCL Tis awaited. The scheme will be given effect to in the financial results on receipt of all necessary approval.

Note 6 to the financial results regarding the input tax credit balances under the Cenvat/Service tax/Sales tax considered fully recoverable by the management and no provision made against the same in the books based on the legal advice obtained and the special leave petition filed by the Company with the Hon'ble Supreme Court of India against the order passed by the Hon'ble High Court of Bombay disallowing the Company's claim to carry forward these balances on transition to Goods and Services Tax (GST) for future set-off against GST payable.

Our conclusion is not modified in respect of these matters.

1. The comparative standalone financial information of the Company for the corresponding quarter December 31, 2019 were reviewed by the predecessor auditor and the standalone financial statements of the Company for the year ended March 31, 2020, were audited by predecessor auditor who expressed an modified opinion on financial information for the corresponding quarter December 31, 2019 on January 23, 2020 and modified opinion on financial information for the year ended March 31, 2020 on May 16, 2020.

For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm registration number: 101049W/E300004

Digitally signed by VINEET KEDIA VINEET KEDIA

DN: cn=VINEET KEDIA, c=IN, o=Personal, email=vineet.kedia@srb.in Date: 2021.01.28 16:26:36 +05'30'

per Vineet Kedia Partner Membership No.: 212230 UDIN: 21212230AAAAAl1837

Place: Mumbai Date: January 28, 2021