vindhya telelinks ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is primarily engaged in the business of manufacturing and sale of a variety of Telecommunication Cables including optical fibre cables conforming to various national and international specifications, Railway Signaling and Quad Cables, other types of Wires & Cables, Solar PV Cables, FRP Rods/ Glass Rovings, Connectorized Cable Products, etc. (classified as Cable Segment) and Engineering, Procurement & Construction business (classified as EPC Segment).

After the Covid-19 Pandemic related business disturbances settled down, the Company has tremendously improved its performance parameters as a whole with contributions from both Cable and EPC business segments which have done reasonably well during the year under review.

Since the initial launch of 5G in October, 2022, the Indian telecom industry has made significant progress in deploying 5G services across the country led by two of the leading private telecom operators, which have rapidly rolled out their 5G services to the subscribers in major cities. 5G offers ultra-reliable low-latency communication, which minimises input lag and has the potential to transform sectors like online education, health care, surveillance in agriculture or simply traffic surveillance. The 5G latency and capacity requirements suggest that fibre will be necessary for backhaul links for achieving speed of 1 Gbps which is impossible with twisted pair copper. The backhaul link might be done with microwave or millimetre wave wireless systems but this will necessitate frequency licenses and line- of-sight engineering. Most carriers have therefore acknowledged that fibre is likely to be most effective for backhaul. For the previous generations, most mobile network operators have used coaxial cable for front haul applications. In recent years, however, there have been advances in miniaturising the digital-to-analog electronics so that some of the base station functions can be remoted to the radio head and other functions can be hauled over fibre from further away.

Indian mobile networks are among the most congested with some of the lowest pricing in the world. During the calendar year 2022, Europe saw more than $15 billion of deals to deploy optical fibre cables underground or on poles, driven mostly by independent private investment funds looking for a nice long term return. The fibred-up home is truly future proof with the ability to receive ever growing bandwidth speeds way above 1 Gbps. The socioeconomic composition of more developed economies, with a dose of Covid lockdown, has already nudged households into the need for fibre optic broadband speeds and reliability. Hence, the economic case for the higher cost of laying fibre cables is stronger. There is demand with potentially the longest lifetime of any communications infrastructure. India is not there yet. 5G mobile speeds home broadband will have more immediate impact with quicker reach than taking new optical fibre cables to every home. However, fibre broadband exceeds all other types of delivery in every single measurement of broadband quality including speeds, uptime, latency, jitter and power consumption. For the consumer this has real world impacts like more productivity, better access to healthcare and education, more entrepreneurism and the option of more rural living. For society, this means more sustainability and ultimately, digital equity. It is estimated that by 2030 more than 70% of the population will be in the lower or upper middle class categories with genuine demand for the benefits that only fibre broadband can bring. In line with these developments, the Telecom Regulatory Authority of India (TRAI) has recently released its recommendations on ‘Rating of Buildings or Areas for Digital Connectivity. The emphasis of the recommendations is on providing a framework for creation of an ecosystem for Digital Connectivity Infrastructure (DCI) to be an intrinsic part of building development plans similar to other building services such as water, electricity or fire safety system. The move was also necessitated by the ongoing roll-out of the 5G network which has shown steps are needed to maintain seamless 5G experience specifically inside buildings as higher frequencies have a lower ability to penetrate walls. These recommendations will definitely boost demand for optical fibre cables and related passive networks infrastructure going forward.

The 5G user application cases are being made possible by way of using the existing optical fibre cable network in both backbone and access networks and telecom operators are planning to create Stand-alone (SA) as well as Non-standalone (NSA) 5G networks using dedicated cable network systems to have ultimate 5G user experience and delight. Further, in a historic step forward in public interest and to provide a major fillip to broadband uptake, the government has recently revised the definition of broadband connectivity and upgraded the minimum download speed fourfold. The earlier definition notified by the Department of Telecommunications (DoT) in July, 2013 had benchmarked 512 kbps as the minimum download speed. The new revised definition pegs the minimum download speed at 2 Mbps. This is a huge step by the government to improve the service experience, enhance consumer interest and help raise the overall quantum of per capita data consumption. It will particularly benefit rural and suburban areas, and metro cities, where the majority of consumers use heavy video and data-rich applications and will go a long way in bridging the digital divide in oft-ignored small towns and smaller urban settlements struggling with weak connectivity, thus taking forward the cause of creating a "Digital India". This would result in further building and replacement of optical fibre cable network which will provide huge business opportunities for both Cable and EPC business segments of your Company. Moreover, the EPC business segment expects a good share in the government funded passive Cable Network projects, next phase of which is likely to be launched including that for rural digital connectivity.

Fibre-based backhaul is required to achieve low latency, low interference and high network capacity. Experts suggest that by 2024, at least 70% of the towers need to be fiberized for a full-scale launch of 5G services, which would require an investment in the range of Rs 1.50 to Rs 2.50 trillion. Meanwhile, small cells are emerging as a critical component of the global 5G rollout strategy, given that most telecom operators are using millimeter wave spectrum, which has higher capacity rates but covers smaller distances. Thus, radios need to be closer than in 3G or 4G, making small cells a natural fit for 5G roll-out. Each small cell needs to be backhauled through fibre, further highlighting the importance of fiberisation for 5G deployment.

India has set an ambitious target of 500 GW of non-fossil based electricity generation capacity by 2030 as against the present installed capacity of approximately 177 GW. Most of the additions would come from solar and wind as contribution from hydro and nuclear is not likely to be more than 30 GW. Over the last seven decades, Indias electric power capacity has grown at an annual average of about 8% although with significant variations over economic cycle. The plan for the next decade implies a similar overall growth rate but the focus on solar, with its planned 20% growth rate which effectively means that the new National Electricity Plan embodies a very focused vision of green energy development. This will result in significant requirement of E-Beam Solar Cables. Your Company is also a large scale manufacturer of electron beam irradiated power cables meant for diversified user segments like Solar Energy, Railways, Ship Building, and other some of the high temperature applications which are gradually picking up in both domestic and export market places. The Company is growing in a sustainable manner with continuous innovations thereby increasing its market share gradually in the industry.

As a leading player in the industry, your Company is improving further with its quality offerings of Signaling Cables and Quad Cables for Railway applications. The Company has increased its reach with its range of railway cables in both dedicated freight corridor railway networks and also the high speed railway networks.

The World Bank in its latest edition of the Global Economic Prospects Report has projected Indias GDP growth for Financial Year 2024 at 6.30%, which is a healthy number despite a bleak global outlook, even as the Bank have marginally lowered Indias estimated output from its January, 2023 forecast of 6.60%. According to a recent analysis by E&Y, India could look towards a multi-year growth cycle with a pickup in the private investment cycle for manufacturing and infrastructure. The Reserve Bank of India has also projected a GDP growth rate of 6.50% for the Financial Year 2023-24, primarily relying on the liberal capital expenditure (capex) announced by the Government in the last Union Budget. Capital investment outlay was increased by almost 33% to 10.00 lakh crores. The interest free loan of 1.30 lakh crores to states has also been made conditional with the rider that the amount shall be spent in the current fiscal year itself. Accordingly, the core sector of the Indian economy will continue to witness decent growth due to the focus on infrastructure creation which augurs well for EPC business segment of the Company. Your Company has built a decent order book and all the key verticals of your Companys EPC business segment are expected to witness robust growth in the foreseeable future. In various states, there are ambitious government plans and investment initiatives in segments of interest for your Company, both for infrastructure including for long term operations and maintenance. As the country is improving the infrastructure facilities for the citizens particularly in the rural areas through mega projects, your Companys EPC business segment is well poised to execute large ticket(s) turnkey projects across all its business verticals.

There is no other material change in the industry structure as was reported last year.

BUSINESS REVIEW AND OUTLOOK

In the domestic telecom market, right now the anticipated requirements in terms of government driven BharatNet project have not yet been announced, however, as per market information, the government is keen to pursue the next phase of ambitious rural broadband penetration project and eager to bridge the urban-rural divide to a significant extent. As tenders against these requirements are expected to be floated soon, it shall benefit the domestic optical fibre cable and related infrastructure industry in a big way. Apart from sizable business opportunities for Cable business segment from such prestigious government driven projects, it shall also throw enormous opportunities for EPC business segment of your Company which possesses requisite skills and resources for such projects relying upon its established credentials in order to enhance overall performance of the Company.

Similar to the telecom sector, the railway sector is also ramping up its network and undertaking modernization of the rail network given the substantial resource allocation in last Union Budget. The Company has done well in terms of fulfilling the requirements of Indian railways with its robust railway cables portfolio and constantly providing innovative cable solutions for this sector.

As for the introduction of 5G mobile communication technology for the Indian subscribers, the government is also encouraging trials of 5G use cases across a range of industries which may encourage private 5G network rollout in a variety of sectors including manufacturing. In comparison to the existing public cellular networks or Wi-Fi, private 5G networks promise a wide range of network related advantages to enterprises including enhanced security, greater control, efficient management and predictable services. In addition, private networks provide increased availability and coverage due to new spectrum bands dedicated specifically to private cellular networks. All these private 5G networks shall require significant quantity of optical fibre cables for backbone as well as access which augurs well for your Companys Cable business segment.

Traditionally, a telecom operators backhaul network was dominated by microwave, which accounted for 75-80% of the network. While microwave served as an adequate backhauling medium in the 2G era, it is becoming less relevant in the 5G ecosystem which requires multifold fibre deployment from the backhaul point of view. An intensive optical fibre cable backhaul is necessary to achieve low latency, low interference and high network capacity, and seamlessly stream bandwidth-intensive applications for 5G. Further, with small cells becoming a crucial part of the 5G roll-out, fiberized backhaul will be the way forward in the future. As such, industry stakeholders are increasingly exploring to increase the fiberisation in the backhaul and the last mile. It is expected that by 2025, at least 70% of the towers in India will have to be fiberized for a full scale launch of 5G services. The level of fiberisation right now prevailing in the existing infrastructure is around 35% which is not considered sufficient to give real 5G services and experience to the subscribers. The fiberisation of towers presents a huge opportunity for both the business segments of the Company.

Overall, all these projects both government driven and private telecom operator segments coupled with planned massive roll-out of Fibre-To-The-Home (FTTH) projects may open up lot of opportunities for growth to the Company.

Recently, the National Highways Authority of India (NHAI) announced that they would be working towards creating optical fibre cable infrastructure across the country. The Central Government has also proposed mandatory common ducts and posts across all linear infrastructure in urban and industrial areas, housing projects and all central and state development works and has circulated Draft Standards for Common Duct and Post Infrastructure along Highways and Public Pathways. The document suggests that central and state governments look at phased installation of common ducts across road lengths where frequent installation and maintenance of underground facilities are required. These initiatives shall give ample opportunities of growth for the Companys Cable and EPC business segments. Further, the governments thrust on various infrastructure creation projects like PMs Gati Shakti program, Multimodal logistics parks creation, Bharatmala Project connecting the ports to be developed across the coastal belt in the country should provide more opportunities for the Company to offer solutions from its vast cable and services portfolio.

These engines of growth are supported by complimentary roles of energy sub-transmission and distribution, communication and information technology, water and irrigation, sewerage, city gas distribution and gag pipelines and other social infrastructure projects. These projects shall open up more opportunities, thereby generating more business for the Companys EPC business segment in utilizing its expertise in all the business verticals it operates to ultimately thrive and provide its value added services to global standards.

SEGMENT-WISE PERFORMANCE

Sale of Products (Cables, etc.)

During the year under review, the Companys Revenue from Operations of Cable business segment on account of sale of products comprising of telecommunication cables, other wires and cables, FRP Rod/Glass Rovings and traded goods, etc. increased from Rs 56,024.74 lakhs in the previous year to Rs 76,232.15 lakhs. The growth in the revenue is mainly achieved due to addition of new customers both in domestic and export markets and consequently volume growth with better product mix as a result of gradual expansion in production capacity keeping pace with demand trend. Revenue from exports has grown substantially with regular flow of orders backed by consistent performance in terms of deliverables and strong customer orientation by innovative product offerings.

Sale of Services (EPC Contracting/Turnkey Services)

The Companys Revenue from Operations during the year under report in the EPC business segment increased to Rs 2,27,043.15 lakhs as compared to Rs 85,940.76 lakhs in the corresponding previous year, mainly due to surge in order booking as a result of diversification of Companys EPC business segment to Water and Irrigation verticals. The EPC business segment is having at its disposal highly experienced team of professionals to offer high quality services for EPC contracting/turnkey project and related operations and management services to its esteemed customers with latest technology driven tools.

Existing EPC business segments, interalia, encompasses telecom network rollouts with IP-1 and EPC models, irrigation, sewerage, water supply infrastructure, power distribution and substation projects, civil construction and gas pipeline projects, etc. Based on Government of Indias thrust on Har Ghar Jal, your Company bagged a big ticket order for underground water project in the state of Uttar Pradesh and now with a dedicated team, is poised to bid for similar projects in other states.

The EPC business segment of your Company has also bagged large value orders for power distribution in the states of Odisha, Madhya Pradesh and Bihar, thus augmenting the already healthy order book. The tenders for bridging the rural broadband divide under BharatNet are also expected in the current year in the EPC model and your Company will target sizeable business to add to its core telecom segment, which will give a boost to both Cable & EPC business segments of your Company. This project also proposes long period of O&M which will add to the growing O&M vertical of the EPC business segment in your Company.

Your Company is aligned with Government policies to exploit the opportunities in the priority areas to focus on calibrated diversification & continue the growth trajectory. The Companys EPC Business Segment is looking to increasing the order book in the water, telecom, irrigation, energy and other infrastructure sectors of interest by participating in selective tenders to maintain a healthy bottom line.

Companys IP-1 performance during the year was muted due to temporary slowdown in capital expenditure by the telecom service providers and delays in 5G roll-out plans of the service providers. This is despite the fact that the Companys IP-1 business model has delivered tremendous value to all the telecom operators who are its esteemed customers, deriving greater benefits out of the network built by the Company thereby offering latest digital services to the subscribers with ultimate customer delight.

OVERALL REVIEW

During the year under review, the Company has reported stellar financial performance. The Company has been able to scale up Revenue from Operations in both the business segments and also able to maintain the mark of trust earned by the Company in EPC business segment.

FINANCIAL REVIEW

• The Revenue from Operations increased by 119.05% to Rs 2,90,010.86 lakhs during the year 2022-23 as compared to Rs 1,32,394.90 lakhs in the corresponding previous year.

• The aggregate other income during the year 2022-23 decreased to Rs 1,381.13 lakhs as against Rs 3,100.63 lakhs in the previous year.

• The Company achieved profit before interest, depreciation/amortisation and tax of Rs 27,988.33 lakhs during the year 2022-23 as compared to Rs 18,609.83 lakhs in previous year. Profit before depreciation and tax during the year 2022-23 stood at Rs 22,124.24 lakhs as against Rs 13,420.18 lakhs in the previous year.

• The finance costs has increased to Rs 7,311.54 lakhs (previous year Rs 5,685.96 lakhs) primarily due to increase in borrowings to cater to the increased turnover.

• There was no change in the capital structure during the year. The Other Equity of the Company stood at Rs 1,12,488.35 lakhs during the year under review as compared to Rs 99,739.04 lakhs in the previous year.

• The additions to the fixed assets of Rs 1,983.04 lakhs during the year mainly consist of additional capex for gradually augmenting the production capacity at its manufacturing facilities at Rewa (M.P.).

• The inventories increased to Rs 96,111.26 lakhs as on March 31,2023 from Rs 76,021.27 lakhs as at the end of the previous year, due to increase in inventory of Work-in-Progress.

• The increase in trade receivables level stood at Rs 1,02,680.14 lakhs as on March 31,2023 as compared to Rs 70,844.78 lakhs as on March 31,2022 was due to increase in turnover.

• Key Financial Information (Standalone & Consolidated):

(Rs in lakhs)

Particulars	Standalone		Consolidated
	F.Y 2022-23	F.Y 2021-22	F.Y 2022-23	F.Y 2021-22
Revenue from Operations	290011.06	132394.90	290011.06	132394.90
Profit before Finance Costs, Depreciation/Amortisation and Tax	29435.78	19106.14	33739.96	33735.81
Net Profit after Tax	15430.36	8460.59	18531.16	19327.97
Fixed Assets	10004.83	10191.85	10004.83	10191.85
Investments	20691.06	22444.69	306290.84	301580.29

• For detailed information on the financial performance with respect to operational performance, a reference may please be made to the financial statements.

• Details of significant changes in Key Financial Ratios:

Ratio	2022-23	2021-22	Variation	Reasons for Change
Inventory Turnover Ratio (in Times)	3.35	1.75	91.80%	Change in Inventory Turnover Ratio is mainly due to significant increase in turnover.
Debtors Turnover Ratio (in Times) (Debtors are inclusive of unbilled and exclusive of excess billed)	2.62	1.40	86.94%	Change in Debtors Turnover Ratio is mainly due to significant increase in turnover.
Interest Coverage Ratio (in Times)	4.47	3.16	41.56%	Change in Interest Coverage Ratio is due to Increase in profitability.
Return on Net Worth (in %)	15.28	9.38	62.81%	Change in Return on Net Worth is due to Increase in profitability.

OPPORTUNITIES, THREATS & BUSINESS OUTLOOK

• Ongoing 5G network expansion and expected large scale investments in 5G network creation on a pan-India basis are one of the major business opportunity for both the business segments of the Company.

• Government driven BhartNet project which will require huge volume of optical fibre cable network deployment especially reaching out to the rural areas across the country offers very big opportunity for the Company.

• FTTH and Tower fiberisation projects are also expected to add to the huge opportunity pipeline for the Company.

• Constant product innovation coupled with world class and competitive solutions may generate good demand for Companys products in solutions in global market thereby derisking its business model by reducing reliance on domestic market.

• Government proposed capital outlay and Companys initiative in Energy, Water and Irrigation projects will ensure strong growth for EPC business segments in the foreseeable future.

• Sluggish economy inhibits the robust growth of telecom network as the investments shrink during downturn which remains as a threat to the industry, but it remains in the short term only and development in telecom network is bound to happen with latest technology innovations. Further, despite envisaged robust growth for optical fibre cables demand over the coming five years, the industry faces a number of significant challenges threatening to disrupt the rapid scale of growth and ability to meet the demand. The persistent issue of tight skilled labour market is now beginning to constrain cable deployment in developed and emerging markets besides challenges related to raw materials supply constraints, rising input costs and elevated deployment costs again all adding as notable headwinds when it comes to the speed of both private and public networks construction.

• Governments Policy initiatives always play a major role in shaping up the Telecom industry and also in the domain of Infrastructure creation in terms of its ups and downs.

• Right of Way (RoW) permissions and its guidelines from various Government Authorities traditionally played a role in the telecom network creation and hopefully, the various policy impetus is resolving the perils of the industry.

• The economy and its business activities get derailed in the extraordinary circumstances emanating from pandemic, geo-political tensions and rising inflation, etc. which in turn affect the business and operations of the industries and ensuing impact on profitability. The Company is not a stranger to these challenges and has taken appropriate measures by building agility and ability to pivot quickly.

• Rising Human Resource challenges like workforce planning, retention, succession planning and skill gaps and increasing wage/ social security benefits trend will play crucial role for the sustained viability and continuing success of the Companys businesses and can be categorized as Human Capital Risk to be dealt with as an important matter for future growth of both Cables and EPC business segments.

• In an increasingly uncertain and volatile world that is throwing up new challenges for businesses, ESG provides a framework for staying resilient by holistically safeguarding people, planet and profits. The Company has taken effective steps for gradual integration of environmental, local and governance aspects in all spectrum of its businesses thereby decreasing the risks arising from domestic and global factors.

RISKS AND CONCERNS

The risks that may affect the functioning of the Company include, but are not limited to:

• Substantial investment is required in setting up the underlying infrastructure for ramping up the 5G rollout by the telecom operators. Subsiding optical fibre deployment through viability gap funding (e.g. USOF) can significantly help accelerate rollout. Bandwidth sharing can be mandated and Category I Infrastructure Providers (IP-1) should be permitted to bid. In addition, greater alignment is required between states and local bodies Rights-of-Way policies in line with the Central RoW Rules. A national dig-once policy can be formulated for fibre deployment across states and municipal roads and national highways. These prudent policy measures, if implemented will help to bring down costs and reduce time-to-market;

• Financial and liquidity conditions in the economy in general and of the key customers of the Company in particular and Companys ability to retain these customers amid stiff competition;

• Dependence on concentrated customer base in cable business segment;

• Increasing cost of raw materials and logistics;

• Volatility in forex market and exposure of the Company to foreign currency movements;

• Technology challenges/information technology risks;

• Competitive market conditions;

• Inverted duty structure;

• Compliance and regulatory pressures including changes in tax laws;

• Delay in execution of turnkey projects leading to financial penalties and cost overrun;

• Retention of skilled manpower in the relevant areas of Cable and EPC business segments;

• Environment and safety risks;

• Digital transformation of manufacturing facilities to remain competitive and attain world-class status under Industry 4.0 concept;

• Structural risks represented by globalization, trade wars and macroeconomic interventions by the Government(s);

• Business disruptions during national disasters, pandemics, epidemics and other catastrophic events, supply chain disruptions and suppliers risk due to regulatory and policy changes by the Government(s); and

• Geopolitical events as well as other events outside the Companys control that could cause a disruption to the manufacturing and service operations.

Risk management is an increasingly important business driver and is embedded in the activities of the Company through an enterprisewide approach. Your Company has a defined risk management strategy with senior management identifying potential risk, evolving mitigation responses and monitoring the occurrence of risk. The Company is also in the process of implementing a forward looking and predictive risk identification and management program that will help businesses limit risk exposure, save costs and enhance value for stakeholders. The definition of risk management is also being enlarged to incorporate an array of operational, legal and financial objectives besides ensuring safety and sustainability of operations and project(s) execution and well-being of employees in the times of natural disasters and pandemic. The risks are identified on a regular basis, across functions and business segments and the Company strives to link each risk with mitigation step to ensure business continuity. Concerted efforts are being made to improve risk management programs so that both business and regulatory demands can be met, greater business value can be created and corporate reputation can be protected. Risk mapping updates are made available to Audit Committee and Risk Management Committee of the Board.

INTERNAL CONTROL FRAMEWORK

The Companys system of financial, operational and compliance control and risk management is embedded in the business process by which the Company pursues its objectives. The Company is also required to comply with the provisions of the Companies Act, 2013 as regards to maintaining adequate internal financial controls over financial reporting. The management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides assurance on the efficacy of the Companys operations and safety/security of its assets besides orderly and legitimate conduct of Companys business in the circumstances, which may reasonably be foreseen. The Company has a defined organization structure, authority levels, delegated powers, internal procedures/SOPs, rules and guidelines, code of conduct, etc. for conducting business transactions, ensuring reliability of financial controls and compliance with applicable laws and regulations. To manage the risks profile of the Company, proper organization structures, EHS/other compliances, whistle blower mechanism, compliance management, performance reviews are conducted at regular intervals.

Further, to augment the internal controls, the Company has engaged a firm of Chartered Accountants for internal auditing, who besides conducting periodic audits, independently reviews and recommend measures to further strengthen the control mechanism. The Internal Audit programs cover the entire operations of both the business segments of the Company. The Internal Auditors regularly brief the Management and the Audit Committee on their significant audit observations/findings, steps to be taken with regard to deviations, if any, and the remedial measures as required are implemented by changing processes and/or setting up additional internal controls. The Audit Committee also reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, if any.

ENVIRONMENT & SAFETY

The Company successfully continued with the implementation of occupational health and safety, quality and environmental protection measures and these are ongoing processes at the Companys plant and facilities. Various proactive measures have also been adopted and implemented which, inter alia, include adoption of cleaner technologies wherever feasible, conservation of resources through waste reduction and training of employees with a focus on sustainable development by improving standards on occupational health & safety and environment protection. As a recognition of these objectives, the entire range of products of the Company continue to remain certified to the requirement of international standard ISO 14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health and Safety Management System) by the DNV GL Business Assurance India Pvt. Ltd.

INDUSTRIAL RELATIONS AND HUMAN RESOURCE DEVELOPMENT

The Company sees its relationship with its employees as critical to the future and its employee relations agenda focuses on ensuring that employees feel valued, on managing change constructively, and on creating an environment and culture within which every employee can maximize his contribution. The Company follows the core values of "be thorough on safety first and compliance" and takes great pride in being compliant to all laws and regulations governing labour and employees and continues to exercise strong governance over all established procedures and practices.

The human ingenuity has always been one of the Companys greatest assets. Accordingly, your Company believes that the competence and commitment of the people are the principle drivers of competitive advantage which enhances competitive strength by differentiating it from competitors. The Company believes in encouraging and nurturing the innovative spirit of its employees and hence put in focused efforts to create strong innovation ecosystem in the organisaiton aimed at customer centric products, solutions and services with an eye on powering future-facing businesses. The Company emphasizes the development of home-grown leaders by capability development, growth and professionally rewarding and enriching work experience. Employees are also competitively rewarded and recognized. The focus is therefore increasingly going to be retaining talent and try to develop human resources capable of opening up the next generation by identification of key people, knowing their aspirations, designing their growth paths and realigning responsibilities, etc. Efforts are being made to strengthen organisational culture in order to attract and retain the best talent in the industry by redefining HR policies and processes in line with contemporary market practices. Training needs are identified in systematic manner, virtual as well as physical training programs were organized enabling the employees to grow their abilities for making the Company an enduring organisation, both economically successful and having impact on their operating environment. The Company is also gradually gearing up for new work realities to stay relevant and creating a work environment that fosters trust and empathy. The industrial relation climate of your Company continues to remain harmonious with focus on improving productivity, quality and safety.

The Board records its appreciation of the dedicated and exemplary services rendered by employees at all levels for safe and reliable operations throughout the year. The Company employed 2048 numbers of employees on its rolls as on March 31,2023.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report may contain certain statements that might be considered "forward looking statements". These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed or implied in the Statement as important factors could influence the Companys operations such as demand supply conditions, Government policies, local, political and economic development, industrial relations, risks inherent to the Companys growth and such other factors. The Company does not undertake any obligation to publicly update, inform or revise such statements, whether as a result of developments, events or actual materialization. Market data and product analysis contained in this report has been taken from internal company reports, industry & research publications, but their accuracy and completeness are not guaranteed and their reliability cannot be assured.