Nelco Ltd — Interim / Quarterly Report 2023

Jan 20, 2023

20th January 2023

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 for the quarter and nine months ended 31st December 2022

In terms of Regulations 30 and 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), as amended from time to time, ('Listing Regulations'), and further to our letter dated 6th January 2023, we are submitting: -

• 1. Unaudited Standalone Financial Results for the quarter and nine months ended 31st December 2022 along with the Limited Review Report by the Statutory Auditors.
• 1. Unaudited Consolidated Financial Results for the quarter and nine months ended 31st December 2022 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 20th January 2023 which commenced at 2.15 p.m. and concluded at 4.20 p.m.

The said Results are also 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 VIJAYANAN D KIRKINDE Digitally signed by GIRISH VIJAYANAND KIRKINDE Date: 2023.01.20 16:21:46 +05'30'

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 TATl'I E:nCorpri,i;o

S.R. BATLIBOI & ^A ssocsATES LLP Chartered Accountants

12th Floor, The Ruby 29 Se napat i Bapat Marq Dada r (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") and its subsidiary (the Holding Company and its subsidiary together referred to as "the Group") for the quarter ended December 31, 2022 and year to date from April 01, 2022 to December 31, 2022 (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. The Holding Company's Management is responsible for the preparation of the Statement 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 and in complianc·e with Regulation 33 of the Listing Regulations. The Statement has been approved by the Holding Company's Board of Directors. 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 entities:

Holding Company • Neice Limited

Subsidiary Company

• Nelco Network Products Limited

S.R. BATL/80/ & A SSOCIATES LLP

Chartered Accountants

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.

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

Partner Membership No.:117142 UDIN:23117142BGYJAC1241 Mumbai January 20, 2023

NELCO LIMITED

REGO. 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 months ended December 31 2022						(Rs In Lakhs)
Sr.No.	Particulars	3 Months ended	Preceding	Correspondine	9 Months ended	9 Months ended	Previous Vear
		31-Dec-22	3 Months ended	3 Months ended	31-Dec-2022	31-Dec-2021	ended
			30-Sep-22	31-Dec-21			31-Mor-22
	'Jl,;, .	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
l	Income
	' a) Income from operations	7,423	7,544	7,206	23,135	18,838	26,007
	b) Other income	72	73	144	172	320	474
	Total income	7,495	7,617	7,350	23,307	19,158	26,481
2	Expenses
	a) Purchase of ~tock· in-trade	822	1,030	1,858	4,262	3,253	4,911
	bl Changes in Inventories of stock-in-trade	(48)	JOG	(153)	(376)	(261)	(443)
	c) Opcratinr. eKpenscs	3,311	3.116	2.44G	9.076	7,124	9.584
	d) Employee benefits expense	897	937	819	2,732	2,539	3,403
	e} Other expenses	911	919	808	2,969	2,394	3,494
	Total expenses	S,893	6,108	5,778	18,663	15,049	20,949
3	Profit before finance cost, depreciation, amortisation and tax (1-2)	1,602	1,509	1,572	4,644	4,109	5,532
4	Finance cost, depreciation and amortisation
	a) Finance cost	197	209	207	644	555	7S3
	b} Depreciation and amortisation expense	684	G71	640	1.983	1.762	2,464
	Total finance cost, depreciation and amortisation	881	880	847	Z,627	2,317	3,217
	Profit before to• (3-4)	721	629	72S	2,017	1,792	2,315
5	Tax expense
	a) Current lJ><	263	2GS	135	832	sos	718
	b) Deferred tax (net)	(42)	(83)	G4	(23'<)	(18)	(105)
	c) T:ix ;idjustmr.nt for earlier yc.> ;irs pursu,1nt to !.Cherne ( Refe r nore 3)						94
	Total tax expenses	221	182	199	598	487	707
6	Net profit for the period/year (4-5)	S00	447	526	1,419	1,305	1,608
7	Other comprehensive income/{expenses)
	It ems that will not be reclassified to profit or loss:
	RcmeJsurcmcnt of post employment benefit obligations (net of tax)	15	(7)	4	(31)	(59)	(30)
8	Total comprehensive income for the period/year {6+7)	515	440	530	1,388	1,246	1,576.
9	Paid up equity share capital ( face value Rs.10/- each)	2.282	2,282	2,282	2,282	2.282
10	0Iher equity
11	E.:irnincs per share (Basic and diluted) {Face value Rs. 10/-ea ch) (not annualised)	2.19	1.96	2.30	6.22	S.72	:i 7.05	)(
12	Dividend per share ( Par Value Rs 10 each }
	Final dividend on equity shares ( in Rs}		1.80		1.80	1.20
	Total equity dividend percentar,e (%)		18		18	12	1,:~	/;< f (!,

Notes to the Consolidated Unaudited Financial Results for the quarter and nine months ended December 31, 2022

The ;ibavr. Consolidilted finilnciill results of Nclco Limited ("the Holdinf! Company"} and its subsidiary Nelca N~twork Products Limited (tocetht!r referred to as "Group") have been prepared in accordance with Indian Accounting Standard!; {'IND AS') notified under Section 133 of the Companies Act 2013, read together with the,> Compames {Indian Accounting standard) Rules. 2015 {Amended). These have bC!cn reviewed and recommended by the Audit Committee and .Jpproved by the Board of Directors at its meeting held on January 20, 2023.
(A) The Holding Company vide its letter dated September I, 2017 informed the stock exchanges about the approval of the Board of Directors to (i) the 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 follawinc: (a) Integrated Security and Surveillance Solution ('1555') 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 Tatomet Services Limited (TNSLJ; and (1i) the amalgamation of TNSL with the Company, through a composite scheme of Arrangement and Amalcamation (Proposed Scheme).
(B) The Proposed Scheme was approved by National Company law Tribunal ('NCLT') on November 2, 2018. The Holding Company received the approval from Department of Telecommunications (OoT) on June 9, 2021. The Scheme was effective from the ,1pnointmcnt d;ite Le. April 1, 2017. Since, the above rcorp.anis.ition was between the Holding Company and its two wholly owned subsidiaries, this had no implication on the rnnsolldatert fin;mcial results. of the Group, other th;in impact on accounting of tax charge, if any, on computation of revised returns.
As mentioned in Note 1 above, the Group Companies completed the process of finalising revised tax accounts and returns from April 1, 2017 till March 31, 2021 and net tax impact including interest thereon, pursuJnt to the above has been accounted and disclo\$ed separately in the quarter and year ended March 31, 2022.
4 Bised on evaluation of key financial parameters. the Group believes that it operates in only one reportable segment i.e. Network Systems and accordingly the financial results are reported a5 single reportable segment.
For thr. financial year ended March 31, 2022, the Company p;:11d hnal dividend of Rs 1.80 (18%) per equity share which was recommended by the Board ,md approved by shareholders at the Annual Gener.ii Meeting of the Company held on July 8, 2022.
fi Tlw Code on Social Security, 2020 ('Code') rt-~!at111c to Nnployee benefits during employment and post-employment benefits recewed Presidenti;.il assent in September 2020. The Code has bren publis.hed in the Gazette of India. However, the dote on which the Code will come into effect has not been notified. The Group w11l .1ssess 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 fir.ures have been re-r.rouped or reclassified. to conform to such current period's classification.
P, The unaudited Stand.if one ,ind Con~olidated financial results for the quarter .ind nine months ended December 31, 2022, of ttlc Comp.iny .Jrc ;:ivailJb!e on the Company's website 'www.nelco.in', Bombay Stock Exchtmcc's website "www.bscindia.com" .ind National Stock Exchange's website "www.nseindia.com''.
For Nelco Limited P.J. Nath
PRADIP Digitally signed by PRADIP JYOTI NATH JYOTI NATH
Managing Director & CEO
DIN:- 05118177 Place:• Mumbai
Date :- January 20, 2023

S.R. BATL/801 & ^A SSOCIATES p

Cha rtered Accountants

12th Floor, The Ruby 29 Senapati Ba pat Marq 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, 2022 and year to date from April 01, 2022 to December 31, 2022 (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. The Company's Management is responsible for the preparation of the Statement 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 and in compliance with Regulation 33 of the Listing Regulations. The Statement has been approved by the Company's Board of Directors. 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.

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

pe artner Membership No.: 117142 UDIN:23117142BGYJAB8031 Mumbai January 20, 2023

-<

NELCO LIMITED

REGO. OFFICE:- El-6, nc INDUSTRIAL AREA, MIDC, ELECTRONIC ZONE, MAHAPE, NAVI MUMBAI· 400 710, CIN: L32200MH1940PLC003164

Sr.No.	Particulars	3 Months ended 31-Dec-2022	Preceding 3 Months ended 30-Sep-22	Corresponding 3 Months ended 31-Dec-2021	9 Months ended 31-Dec-2022	9 Months ended 31-Dec-2021	Previous Year ended 31-Mar-2022
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited (Refer note 2)
A	Continuing operations
l	Income
	.i) Income from opcr.itions	5,191	4,715	3,652	]4,076	10,395	14,316
	b) Other income	88	94	45	208	194	259
	Total income	5,279	4,809	3,697	14,284	10,589	14,575
2	Expenses
	a) Cost of materials consumed	26		29	27	29	43
	bl Operating expenses	2,891	2.668	2,050	7,774	5,900	8,005
	c) Employee bt!nt.'fits expen'>t!	564	bOO	Sll	1,741	1,598	2,115
	d) Oilier expenses	621	~28	425	1,821	1,398	1,980
3	Total C)(penses Profit before finance cost 1 depreciation, amortisation ;rnd tax from continuing operations (1·2)	4,102 1,177	3,796 1,013	3,015 682	11,363 2,921	8,925 1,664	12,143 2,432
4	Finance cost, deprccl.ttlon and amortisation
	a) Finance cost b) Depreciation and amortisJtion expense	87 268	101 259	87 231	288 772	191 656	2&8 835
	Total finance cost, depreciation and amortisation	355	360	318	1,060	847	1.103
5	Profit before to• from continuing operations (3-4)	822	653	364	1,861	817	1,329
6	Tax expense
	.:i} Current t;uc	251	186	126	559	2//	351
	b) Deferred tax	(1,1)	6	(18)	(15)	(29)	17
	c) Tc1x adjustment for earlier years pursuant to schenw ( Rl'fer nute 3)						161)
	Tat.ll tax expense	237	192	108	544	243	307
7	Net profit from continuinf! operations (5•6)	585	461	256	1,317	574	1,022
B	Discontinued operations ( Refer note 2)
8	Profit before t.1x from discontinued operations					116	116
~)	T ,,x expense of discontinued oner at ions
	a) Current tax b) Or.ferred tilX					55 (26)	55 (26)
10	Net profit from discontinued operations (8•9)					87	87
11	Net profit for the period/year {7+10)	585	461	256	1,317	661	1,109
12	Other comprehensive incomc/{cxpenscs)
	II Pm•; thi"'tt will not be recla ~r. 1fi1•d to profit or los:;• contimJing operations (net of t.:1:,1:J	8	(7)	3	(25)	(82)	(64)
	Item-:. that will not hr. rcclas:;ificd to profit or lo55· di~contimJed opnations (net of tax)					8	8
	Other comprehensive incom~/{cxpenses)	8	(7)	3	(25)	(74)	(56)
13	Total comprehensive income for the period/ year (11+12)	593	454	259	1,292	587	1,053
].1	Paid up equity share capi!.11 ( t"ce value Rs.10/- each)	2,282	2,282	2,282	2,282	2,282	2,282
IS	Other equity						6,174
16	Earnines per share (Basic and diluted) (Face value Rs. 10/-cach) (not annualised)
	From continuinc operat1011s	2.57	2.02	1.12	5,77	2.52	4.48 0.38 r
	From discontinued operations from continuing and d1 5cuntinucd opcrJt1ons	2.57	2.02	1.12	5.77	0.38 Z.90	4\$1.
I 17	Dividend per share ( Par value Rs 10 each)
	Final dividend on equity sh,1rcs ( in Rs)		1.80		l.80	1.20	· ?£
	Total equity dividend pcrc:cntacc (%)		18		18	12	12 \

Notes t o the Standalone Unaudited Financial Results for the quarter and f1in<? months ended December 31, 2022 C - , . .

• J The r1bovc rc':lult-:. have I.wen preparl'd in accorrfancc with lndi,1n A(countinc Standard!i {'IND AS') notified under Section 133 ul the Compclnics Act 2013, re;1U toecthcr with the Companie~ (lndi,,n Accountinc standard) Rules, 2015 (/\mended). The:;e havC' been reviewed and recommended by the Audit Committee and ,1pprovcd by the Board of Directors .1t its meeting held on January 20, 2023.
• 2 (A) lhc Comp;,ny vide its h•ltcr dated September 1. 2017 informed the stock exch;ingcs .ibout the approval of the Board of lltrectors to

{1) the tr.Jnsfor by w.1y of slump salt! on a game concC?rn basis, for a lump sum c.onsideration to ih ,.•.1holly owned ~ubs1<l1,try, Nelco Network Products ltd (NNPL) of the! tollowinr, .

(a) lntl'r,r,1ted s~curity and Surveillance Solution ('tSSS) business and

(b) Very Sm.:ill Aperture Terminal~ ("VSAT"J hardw.1re business .:ind allied service~ consistinr, or nt'twork manacemcnt, proIcct manacemcnt. infrilstructurc services, turnkey solutions for satellite communtca1Ion :.y:.tcm~. and co-locat1on scrvIct'~ to customers other than Tatanct Scrvrccs limited (TNSU: and

(1i) the amal~amation of TNSL with the Company, throu~h a composite scheme of Arrangement and Amaleamation (Proposed Scheme).

(8) The Proposed Scheme was approved by National Comp,1ny l aw Tribunal ('NCLT'I on November 2, 2018. The Company n•ce,ved the approval horn Department of Telecommunications (Doll on June 9, 2021. The Scheme was effective from the appointment date i.e. April l , 2017.

Pursut1nt tu the approval. the Scht'mc wt1s accounted ,:1~ follows :

• Discontinued opcr;It1ons was transferred to NNPL 1n accordance with IND AS 105. crtec trvc June 1. 2021; and
• TNSL m,!rger was accounted in Jt cordantc with Appendix C of IND AS 103 "Business Combination" and res ult~ of all the previous periods were restated.

(C) Details of discontinued operations

C) Details of discontinued operations						(Rs in Lakhs)
Particulars	3 Months ended 31-Dec-2022	Preceding 3 Months ended $30-Sep-22$	Corresponding 3 Months ended 31-Dec-2021	9 Months ended 31-Dec-2022	9 Months ended 31-Dec-2021	Previous Year ended 31-Mar-2022
	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
Income from operations including other income					1,419	1,419
Expenses					1.303	1,303
Profit before tax					116	116
Tax expense
a) Current tax					55	55
b) Deferred tax					(26)	(26)

• 3 The Company completed the procc'.i'.> of final 1s1ng revised tax t1ccounts and returns from April 1, 2017 till March 31, 2021 ilnd net tax impact includinc intcrc~t thereon, pu rsuant to the above accuunt~d in th~ quarh!r and year ended March 31. 2022:
• 4 For the financial year cndr.d March 31, 2022, th,:- CompJny paid final d1v1dcnd or R~- 1.80 (18%) per equity sh;irc which w~r, recommended by the Board and approved by shareholder:. at the Annual General Mectin1: of the Company held on July 8, 2022.
• 5 Based on evalu.1tion of kt~V financial pJrJmeter-;, the Cornp,,ny believes thJt it opt:rJte~ in only one reportable ~ecmcnt i.t• Network Systems ,md Jccordinctv the financial results c1rc reported as sinele reportable sccment.
• Ii ltlf' Code on Soc1.1I Scc1m:v, 2020 {'Corle') rcla:inr, ro c:riplnvcc b!!nf'fHs durmc t~mplovmC'nt ;m d no•.t -~m ploymt"nt bcnC'f1ts n~ceivrd PrC's1dcnti:1l ,1sscnt m September 2020. lhr. Code has been publi=;hcd in the Gazette of India. However, th1_• d,1tc on which the Code will come into chcct h.:is not been notified. The CnmpJny will t1s-;;css the impJct of the Code when it come~ into effect and
• will record .111y related irn11act in the period the Code becomes effective. } 7 Prev10u~ 1wr1od / year f11~ures havi: bt't!n re·I~roup1~d or recl.1s~ified, to cunfurm tu such curre nt period's class.1f1ca1 ion.

For Neice Lim ited

Digitally signed by NATH

M:m.1cing Director & CEO DIN :- 05118177

0

Place :- Mumbai Date :• January 20, 2023 ··::-_- .: