Dear Shareholders,
Your Directors are pleased to present the 78th (Seventy
Eighth) Annual Report together with the Audited Accounts and Auditors Report for the
Financial Year ended on 31st March, 2025.
SUMMARY OF FINANCIAL RESULTS
The Company's financial results for the year ended 31st
March, 2025 is summarized below: -
| Particulars |
For the year ended March 31, 2025 |
For the year ended March 31, 2024 |
| I. Revenue from operations |
23624.20 |
26945.65 |
| II. Other Income |
145.20 |
452.14 |
| III. Total Income(I+II) |
23769.40 |
27397.79 |
| IV. Expenses |
|
|
| Networks operation Expenditure |
8515.54 |
11511.09 |
| Employee Benefits Expenses |
5050.95 |
4907.15 |
| Sales & Marketing Expenditure |
5100.87 |
5248.45 |
| Finance Cost |
15404.96 |
14721.78 |
| Depreciation and Amortization Expenses |
1985.69 |
2146.50 |
| Other Expenses |
1814.94 |
2051.08 |
| Total Expenses |
37872.95 |
40586.05 |
| V. Profit/(Loss) before exceptional and extraordinary items
and tax (III-IV) |
(14103.55) |
(13188.26) |
| VI. Exceptional Item |
13526.13 |
Nil |
| VII. Profit/(Loss) before extraordinary items and tax (V-VI) |
(27629.68) |
(13188.26) |
| VIII. Income Tax expenses |
- |
- |
| IX. Profit (Loss) for the period from continuing operations
(VII-VIII) |
(27629.68) |
(13188.26) |
| X. Profit/(Loss) from discontinued operations |
- |
- |
| XI. Tax Expenses of discontinued operations |
- |
- |
| XII. Profit/(Loss) From the discontinued operations (After
Tax) (X-XI) |
- |
- |
| XIII. Profit /(Loss) for the period (IX+XII) |
(27629.68) |
(13188.26) |
| XIV. Other Comprehensive Income |
|
|
| (A) Items that will not be reclassified to Profit/(loss) |
0.61 |
27.88 |
| (B) Items that will be reclassified to profit/(loss) |
|
|
| Other Comprehensive Income (After Tax) |
0.61 |
27.88 |
| XV. Total Comprehensive Income |
(27629.07) |
(13160.38) |
FINANCIAL PERFORMANCE REVIEW/ STATE OF COMPANY'S AFFAIRS
The Company's operating revenue was Rs. 23,624.20 Lakhs during the
financial year 2024-25 against Rs. 26,945.65 Lakhs for the financial year 2023-24 and also
the Company have sustained an operating loss of Rs. 27629.07 Lakhs during the financial
year 2024-25 against Rs. 13160.38 Lakhs for the financial year 2023-24.
Total expenses during 2024-25 have decreased by 7% to Rs. 37872.95
Lakhs against Rs. 40586.05 Lakhs in the previous year.
BUSINESS OPERATIONS
Your Company holds Unified License (UL License) and ISP License
Category-A (valid till 2035) for providing Telephony Services in the Punjab Telecom
Service Area comprising of the State of Punjab, Union Territory of Chandigarh and
Panchkula Town of Haryana.
Currently, the Portfolio of services provided by the Company includes
Fixed Voice (Landline) services, DSL (Internet) services and Leased Line services in the
Punjab Telecom Circle.
The Company provides broadband services through its fiber optic cable
laid across Punjab and the Company has also entered into colocation agreements.
As at 31.03.2025, the Company had a total subscriber base of 3.46 Lakhs
customers.
CORPORATE DEBT RESTRUCTURING SCHEME (CDR SCHEME)
The Corporate Debt Restructuring Cell (CDR Cell) had vides its letter
no. CDR(JCP)563/2009-10 dated August 13, 2009 approved a Corporate Debt Restructuring
Package (CDR Package) for the company, in order to write off the losses and also to enable
the company to service its debts.
Due to continuous losses and financial constraints, the Company has
defaulted/delayed in the interest payments accrued towards Lenders on account of Secured
Non-Convertible Debentures (NCDs) issued to Lenders as per CDR terms for the period ended
March 31, 2025 till the date of signing of this report. Company has also defaulted in the
repayment of principal amount of Secured NCDs and Cumulative Redeemable Preference Shares
issued to Lenders as on March 31, 2025. The Company has also not been able to create
Capital Redemption Reserve in terms of the provisions of Section 55 (2) (a) and (c) of the
Companies Act 2013 since there are no profits available for the same.
However, the Company has fully squared off the fund based working
capital limits during the previous financial year.
In meanwhile, on April 2, 2024 an application/petition has been filed
under section 7 of Insolvency and Bankruptcy Code, 2016 ("IBC") by M/s IDBI
Trusteeship Services Limited, Debenture Trustee acting on behalf of Lenders/financial
Creditors, before the National Company Law Tribunal - Mumbai Bench ("NCLT,
Mumbai") claiming a default of Rs.364,86,48,491.11/- and seeking initiation of
Corporate Insolvency Resolution Process (CIRP) against the Company. On August 7, 2025 the
written submissions by both parties have been submitted to the Court, and the Order has
been reserved.
CHANGE IN NATURE OF BUSINESS
There was no change in the nature of Business of the Company during the
period under review.
EQUITY SHARE CAPITAL AND LISTING OF SHARES
The paid-up Equity share capital of the Company is Rs. 61,22,60,268/ -
comprising of 61,22,60,268 equity shares of Re. 1/- each. The Company's shares are listed
on BSE Limited and are actively traded.
The Company has not issued any new securities during the year under
review.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Hon'ble Supreme Court in its judgment on AGR vide dated September
1, 2020, reaffirmed that the demand raised by the DoT stated in its modification
application as final and no dispute or reassessment shall be undertaken.
In addition, Hon'ble Supreme Court directed that the Telecom operators
shall make a payment of 10% of the total dues as demanded by DoT, by March 31, 2021 and
remaining dues in yearly installments commencing April 1, 2021 till March 31, 2031,
payable by March 31 of every succeeding financial year.
In compliance of the said order of the Hon'ble Supreme Court, the
Company has paid Rs. 1892.00 Lakh to DoT i.e. 10% of the total dues, by way of adjustment
from surplus / excess ISP License fee amounting to Rs. 2457.81 Lakh lying with DoT and
assessed by DoT vide its letter dated 20-06-2017. Receipt of above payment of 10% of dues
has also been confirmed by DoT in its affidavit dated 07-04-21 filed before Hon'ble
Supreme Court.
The DoT has offered a relief package vide its letter dated October
14, 2021 to the Telecom Operators; offering a Moratorium period of 4
years for the payment of AGR related dues up to financial year 2016-17. Accordingly, the
installment which becomes due on March 31, 2022 stands deferred till March 31, 2026. The
Company has confirmed the acceptance of Moratorium period.
The DoT has offered another relief package vide its letter dated June
15, 2022 to the Company; offering a Moratorium period of 4 years
towards AGR related dues for the financial year 2017-18 and 201819, as the period was not
covered by the Judgment dated September 1, 2020 of Hon'ble Supreme Court. Accordingly, the
payment of AGR dues for the financial year 2017-18 and 2018-19 shall become payable
alongwith the dues of earlier Moratorium. The Company has confirmed the acceptance of this
Moratorium period also.
MATERIAL CHANGES OCCURED BETWEEN THE DATE OF END OF THE FINANCIAL YEAR
AND THE DATE OF THE BOARD REPORT
The Company has failed to redeem its Non- Convertible Debentures (NCDs)
that were issued in exchange for the Term Loan granted by the Lenders of the Company under
Corporate Debt Restructuring Scheme. Consequently, all the Directors of the Company, has
been disqualified under Section 164(2)(b) of the Companies Act, 2013 w.e.f April 1, 2025.
This disqualification renders them ineligible for reappointment as a director in this
company or appointment in any other company for a period of five years. All the Directors
will continue as Director in the Company till the time of retirement.
DIVIDEND
As on 31.03.2025, the Company had accumulated losses. Your Directors,
therefore, have not recommended any dividend for the financial year 2024-25.
TRANSFER TO RESERVES
During the year under review, no amount has been transferred to
reserves.
FIXED DEPOSITS
Your Company has not accepted / renewed any deposits within the meaning
of Section 73 of the Companies Act, 2013 and as such, no amount of principal or interest
was outstanding as on the Balance Sheet date.
HUMAN RESOURCE DEVELOPMENT
Our human resource management focuses on allowing our employees to
develop their skills and grow in their career. The Company's compensation and employee
benefit practices are designed to be competitive in the respective geographies where we
operate. Employee relations continue to be harmonious at all our locations. Professionals
are our most important assets. The Company offers a dynamic work environment where its
employees benefit from working with other innovators, driving meaningful change together,
both for its customers and the Company. We are committed to hiring and retaining the best
talent. For this, we focus on promoting a collaborative, transparent and participative
organization culture, and rewarding merit and sustained high performance including
shifting of Manpower from vendor roll to Company's roll to keep the junior manpower in
high spirit. Moreover Company endeavors to shift junior employees from vendor's roll to
the Company's roll to reduce the churn of the junior manpower of the Company
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Company, being in the telecommunications sector is not involved in
carrying on any manufacturing activity; accordingly, the information required under
Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014
with respect to Conservation of Energy, Technology Absorption are not applicable.
However, the following information would give adequate idea of the
continuous efforts made by the Company in this regard:
(i) Energy Conservation:
(a) Electricity is used for the working of the Company's telephone
exchanges and other network infrastructure equipment. The Company regularly reviews power
consumption patterns across its network and implements requisite changes in the network or
processes in order to optimize power consumption and thereby achieve cost savings.
(b) Reduction in the running of the Diesel Generator (DG) Sets during
power cuts it its various sites.
(ii) Technology Absorption: The Company has not imported any
technology. The Company has not yet established separate Research & Development
facilities.
(iii) Foreign Exchange Earnings And Outgo:
During the year under review, there were no foreign exchange earnings
and the foreign exchange outgo.
ANNUAL RETURN
In accordance with the Companies Act, 2013, the annual return in the
prescribed format is available at www.connectbroadband.in
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 (12) of Companies Act
2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 in respect of employees of the Company is appended as Annexure-1 to
the Board's Report.
Particulars of remuneration of employees required to be furnished in
terms of Rules 5(2) and 5(3) of the said Rules, forms part of this Report, which shall be
provided to Members upon written request pursuant to the second proviso of Rule 5.
Particulars of remuneration of employees are available for inspection by Members at the
registered office of the Company during business hours on all working days up to the date
of the forthcoming AGM.
The remuneration paid to all Key Managerial Personnel is in accordance
with remuneration policy adopted by the Company.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADQUECY
The details in respect of internal financial control and their adequacy
are included in the Management Discussion & Analysis, which forms part of this report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has formulated and published a Whistle Blower Policy to
provide Vigil Mechanism for employees including Directors of the Company to report genuine
concerns. The provisions of this policy are in line with the provisions of Section 177(9)
of the Companies Act, 2013 and the Regulation 22 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (URL:
https://www.connectbroadband.in/corporate-governance/).
RELATED PARTY TRANSACTIONS
In line with the requirements of Section 188 of the Act and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has
formulated a Policy on Related Party Transactions and the same is posted on the Company's
URL: https:/ /www.connectbroadband.in/corporate-governance/.
Information on transaction with related parties pursuant to Section
134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is not
provided since there are no transactions with related parties during financial year
2024-25, except payment of remuneration to the Chief Financial Officer and Company
Secretary.
CORPORATE SOCIAL RESPONSIBILTY
In terms of the provisions of Section 135 read with Schedule VII and
the Rules made thereunder, every Company having net-worth of Rs. 500 Crore or turnover of
Rs.1,000 Crore or Net Profit of Rs.5 Crore is required to constitute Corporate Social
Responsibility Committee. The Company does not meet any of the above criteria. As such the
Company is not required to constitute Corporate Social Responsibility Committee and comply
with the requirements of Section 135 read with Schedule VII and the Rules made thereunder.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Pursuant to the provisions of Section 134 (3) (g) of the Companies Act
2013, particulars of Loans/guarantee/investments/securities given under Section 186 of the
Act are given in the related notes to the Financial Statements forming part of the Annual
Report.
BOARD EVALUATION
The Board has carried out an annual performance evaluation of its own
performance, board committees, and individual Directors, based on parameters which, inter
alia, include performance of the
Board on deciding strategy, composition and structure of Board,
discharging of their duties, handling critical issues etc. under the provisions of the
Companies Act 2013 and SEBI Listing Regulations. The parameters for the performance
evaluation of the Directors include contribution made at the Board meeting, attendance,
experience, instances of sharing information on best practices applied in other
industries, vision, strategy and engagement with senior management etc.
Performance of the committees was evaluated after seeking inputs from
the committee members on the basis of criteria such as the composition of committees,
effectiveness of committee meetings, etc.
In a separate meeting held on February 12, 2025 of independent
directors, performance of non-independent directors and the Board as a whole was
evaluated, taking into account the views of non- executive/executive directors. All
Directors participated in the evaluation process. The Board noted the suggestions/inputs
of Independent Directors and recommendations arising from this entire process were
deliberated upon by the Board to augment its effectiveness and optimize individual
strengths of the Directors.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company proactively keeps its Directors informed of the activities
of the Company, its management and operations and provides an overall industry perspective
as well as issues being faced by the industry. The familiarization programme adopted by
the Company is posted on the website of the Company's URL: https://
www.connectbroadband.in/corporate-governance/.
REMUNERATION POLICY FOR THE DIRECTORS, KEY MANAGERIAL PERSONNEL AND
OTHER EMPLOYEES
In terms of the provisions of Section 178(3) of the Act and under
Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Nomination & Remuneration Committee (NRC) is responsible for formulating the
criteria for determining qualification, positive attributes and independence of Directors.
The NRC is also responsible for recommending to the Board a policy relating to the
remuneration of the Directors, Key Managerial Personnel and other employees.
In line with this requirement, the Board has adopted the Policy
relating to the remuneration of the Directors, Key Managerial Personnel and other
employees and the same has been disclosed in the Corporate Governance Report, which forms
part of the Directors' Report. The same is also available on the Company's website URL:
https://www.connectbroadband.in/corporate-governance/.
NUMBER OF MEETINGS OF THE BOARD
Four Meetings of the Board were held during the year. For details of
the meetings of the Board, please refer to the Corporate Governance Report, which forms
part of this report. Board confirms compliance with Secretarial Standards.
THE DETAILS OF DIRECTORS WHO WERE APPOINTED OR HAVE RESIGNED
The Company has failed to redeem its Non- Convertible Debentures (NCDs)
that were issued in exchange for the Term Loan granted by the Lenders of the Company under
Corporate Debt Restructuring Scheme. Consequently, all the Directors of the Company, has
been disqualified under Section 164(2)(b) of the Companies Act, 2013 w.e.f April 1, 2025.
This disqualification renders them ineligible for reappointment as a director in this
company or appointment in any other company for a period of five years. Accordingly no
eligible Director is retiring by rotation and their reappointment under Section 152 of the
Companies Act 2013.
During the year, the non-executive director of the Company had no
pecuniary relationship or transactions with the Company.
THE DETAILS OF KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE
RESIGNED DURING THE YEAR
During the financial year there was no change in the Key managerial
Personnel of the Company. Further, no changes took place in Key Managerial Personnel
during the period commencing 1st April, 2024 till the date of signing of Board Report.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all Independent Directors of
the Company confirming that they meet with the criteria of independence, as prescribed
under section 149 of the Companies Act, 2013 read with sub-rule (3) of Rule 6 of the
Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 25 of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The
Independent Directors have also confirmed that they have complied with the Company's Code
of Conduct. In the opinion of the Board the Independent Directors possess relevant
expertise, experience, proficiency and integrity for the appointment as Independent
Directors.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the Rules framed thereunder, the Company had, on 26th September, 2024, re-appointed
M/s. SGN & Co., Chartered Accountants, Mumbai as Statutory Auditors (Firm Registration
No. 134565W), as Statutory Auditors of the Company for a period of 5 years from the
conclusion of Seventy Seventh (77 th) Annual General Meeting of the Company until the
conclusion of Eighty Second (82nd) Annual General Meeting of the Company.
COST AUDITOR
The Central Government had directed vide its order no. 52/26/CAB- 2010
dated November 6, 2012 to conduct a Cost Audit in respect of the specified products viz.,
Telecommunication Industry.
The Board of Directors of the Company had appointed M/s SDM &
Associates, as Cost Auditor of the Company for the financial year 2024-25. The Cost
Auditors have submitted their report and the same shall be filed with the Registrar of the
Companies within the specified timeline.
The Board of Directors of the Company has again accorded its approval
for the appointment of M/s SDM & Associates, Cost Accountants, as Cost Auditor of the
Company, for the financial year commencing on 1st April, 2025 and ending on 31st
March, 2026, subject to the approval of the Central Government, if any.
In accordance with the provisions of Section 148 of the Companies Act,
2013 read with the Companies (Audit & Auditors) Rules, 2014, the remuneration payable
to the Cost Auditor has to be ratified by the members of the Company. Accordingly, consent
of the Members is sought by way of an Ordinary Resolution for ratification of the
remuneration amounting to Rs. 90,000/- (Rupees Ninety Thousands Only) plus applicable
service tax and out of pocket expenses payable to the Cost Auditors for financial year
commencing on April 1, 2025
In compliance with the provisions of the Companies (Cost Audit Report)
Rules, 2011 and General Circular No. 15/2011 issued by Government of India, Ministry of
Corporate Affairs, Cost Audit Branch, we hereby submit that, the Company has filed the
Cost Audit Report for the financial year ended on March 31, 2024 with the Registrar of
Companies within the prescribed timeline.
SECRETARIAL AUDITOR AND ANNUAL SECRETARIAL COMPLIANCE
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Board had appointed M/s BK Gupta & Associates (CP No. 5708:, FCS: 4590), Practicing
Company Secretary to undertake the secretarial audit of the company for the financial year
2024-25. The Secretarial Auditor has submitted the Report on the Secretarial Audit
conducted by him for the financial year 202425 which forms part of the Board's Report as
Annexure-2.
Since, the term of Secretarial Auditor has expired and according to
Regulation 24A of SEBI Listing Regulations, the Company has to appoint a Secretarial
Auditors for a term of five years. Accordingly, the Board of Directors at its meeting held
on May 21, 2025, appointed M/s BK Gupta & Associates (CP No. 5708:, FCS: 4590),
Practicing Company Secretary as the Secretarial Auditors of the Company for a term of five
(5) consecutive years, to conduct secretarial audit from the financial year 2025-26 upto
financial year 2029-30, subject to approval of the members/ shareholders of the Company at
the ensuing Annual General
In terms of Circular No. CIR/CFD/CMD1/27/2019, February 08, 2019,
issued by Securities Exchange Board of India (SEBI) read with Regulations 24A of SEBI
(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company has also
submitted the Annual Secretarial Compliance Report for the financial year 202425 issued by
M/s B. K. Gupta & Associates with the Stock Exchange.
INTERNAL AUDITORS
M/s Grant Thornton Bharat LLP, perform the duties of internal auditors
of the Company and their report is reviewed by the Audit Committee from time to time.
AUDIT COMMITTEE
In compliance with the provisions of Section 177 of the Companies Act
2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the
Company has constituted an Audit Committee. The composition, scope and powers of the Audit
Committee together with details of meetings held during the year under review, forms part
of the Corporate Governance Report.
The recommendations of the Audit Committee are accepted by the Board.
RISK MANAGEMENT POLICY
Risk Management Policy for monitoring and reviewing the risk management
plan and ensuring its effectiveness has been formulated by the Company. The policy defines
the risk management approach across the organization at various levels including
documentation and reporting. Major risks identified by the businesses and functions are
systematically addressed through mitigating actions on a continuing basis. The Audit
Committee has additional oversight in the area of financial risks and controls. The major
risks identified by the businesses and functions are systematically addressed through
mitigating actions on a continuous basis.
The Board regularly reviews the significant risks and decisions that
could have a material impact on the Company. These reviews consider the level of risk that
Company is prepared to take in pursuit of the business strategy and the effectiveness of
the management controls in place to mitigate the risk exposure.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (I EPF)
As of March 31, 2025, there were no amounts eligible for transfer to
the Investor Education and Protection Fund (IEPF) of the Central Government, in terms of
the provisions of Section 125 of the Companies Act, 2013.
SUBSIDIARY COMPANIES
As of March 31, 2025, the Company has no subsidiary company; hence the
information in AOC-1 pursuant to the provisions of Section 129(3) of the Companies Act,
2013 is not applicable.
JOINT VENTURES/ASSOCIATE COMPANIES
As of March 31, 2025, the Company has no Joint Ventures/Associate
Company.
CONSOLIDATED FINANCIAL STATEMENTS
As on March 31, 2025, the Company has no subsidiary Company and the
consolidated financial statements has not been compiled. Hence, the provisions relating to
consolidation of accounts is not applicable to the Company.
STATUTORY AUDITORS' REPORT
The Statutory Auditors of the Company, M/s. SGN & Co., Chartered
Accountants, Mumbai as Statutory Auditors, have submitted the Auditors' Report which has
the following observation on Standalone Financial Statements for the period ended March
31, 2025.
MANAGEMENT'S EXPLANATION TO THE AUDITORS'
QUALIFICATIONS/OBERSERVATIONS: -
1) Auditors' Qualifications in the Standalone Auditor's Report
Basis of Qualified Opinion:-
a) As stated in Note No. 40 of the financial statements, balances
of some of the trade payable, other liabilities, advances and security deposits pertaining
to erstwhile GSM business are subject to confirmations, reconciliation and adjustments, if
any. The effect of the same is unascertainable, and hence the consequential cumulative
effect thereof on net loss including other comprehensive income for the year, assets,
liabilities and other equity is unascertainable.
b) We draw attention to note no. 39 & 41 of the financial
statements, the Company has incurred a net loss of Rs. 27,629.68 Lakhs during the year and
the accumulated losses as at March 31, 2025 amounted to Rs. 2,91,483.95 Lakhs, resulting
in, the erosion of its net worth, its current liabilities material exceeds current assets,
and all the NCD issued to consortium of financial creditors becomes due. Further the
financial creditors had filed application before NCLT Mumbai under Insolvency and
Bankruptcy code 2016 on 2nd April 2024, Additionally, the Debenture Trustee, M/s IDBI
Trusteeship Services Limited, has issued a notice under Section 13(2) of the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 ("SARFAESI Act") on November 21, 2024, to enforce security interests
over the Company's assets. Symbolic possession of mortgaged properties was taken on
January 23, 2025, and January 24, 2025, and a notice for e-auction was published on March
29, 2025, although the scheduled auction on May 6, 2025, did not materialize, these event
and conditions indicate material uncertainty exists that on the ability of the Company to
continue as a going concern. However, the accounts of the Company have been prepared on a
going concern for the factors stated in the aforesaid note. We however not obtain
sufficient and appropriate audit evidence regarding management's use of the going concern
assumption in the preparation of the financial statements of the company and with the
events and conditions more explained in the Note no. 41 of the statement does not
adequately support the use of going concern assumption in preparation of the financial
statements of the Company.
c) As stated in Note No. 43(b) of the financial statements, interest of
Rs 546.12 Lakhs has not been provided in the statement of profit and loss, had the
interest have been taken the loss including other comprehensive income for the year would
be higher by Rs. 546.12 Lakhs, liabilities and accumulated losses would have been higher
by Rs. 546.12 Lakhs.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effect of the matter described in the
Basis for qualified Opinion in above point a, b & c, the aforesaid financial
statements give the information required by the Companies Act, 2013 ("the Act")
in the manner so required and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other
accounting principles generally accepted in India, of the state of affairs of the Company
as at March 31, 2025, its loss including other comprehensive income, changes in equity and
its cash flows for the year ended on that date.
Management's Explanations to the Auditor's Qualification in the
Standalone Auditor's Report
a) The Company is in process of reconciliation / adjustments, if any,
on its balances of some of the trade payable, other liabilities, advances and security
deposits pertaining to erstwhile GSM business. The requisite accounting effect, if any,
will be given upon such reconciliation. The management however doesn't expect any material
variances.
b) The accumulated losses of the Company as at March 31, 2025 are more
than fifty percent of its net worth as at that date. The losses are due to declining /
Competitive market of the fixed line business and high operating costs. The Company is
confident of generating cash flows from continue business operations through increasing
subscriber' base and ARPU as well as through restructuring of bank loans along with the
support of other stakeholders and the application filed under Insolvency and Bankruptcy
code 2016 is under scrutiny not admitted. In view of the above, the accounts of the
Company have been prepared on a going concern basis.
c) Company will get waiver from lender for the interest as Company in
past obtained waiver of interest from same lender till 31" March-2024 and never paid
interest to this Lender, Moreover no demand from the Lender during the year for interest
therefore company has not provided interest of Rs. 546.12 Lakhs for the year ended March
31, 2025.
2) Auditors' Observation in the Annexure to the Standalone Auditor's
Report
Point No. IX (a) of the Annexure to Auditor's Report which summarizes
the basis of Qualification
According to the information and explanations given to us and based on
the audit procedures performed by us, the Company has defaulted in repayment of loans
(including accrued interest on default amount) to bank/debenture holders as follows:
| Nature of borrowings including debt securities |
Amount Outstanding as at March 31, 2025 and not paid till
date |
Amount of Default as at March
31, 2025 |
Delay/Default (in days) |
|
|
Principal |
Interest |
Principal |
Interest |
| NCD |
IDBI Bank |
20,434.04 lakhs |
10,933.24 Lakhs |
762 -2800 Days |
30 - 1492 Days |
| NCD |
Kotak Mahindra Bank |
1,347.38 lakhs |
958.01 Lakhs |
762 - 2374 Days |
30 - 1826 Days |
| NCD |
Life Insurance Corporation of India |
3,962.33 lakhs |
2,980.22 Lakhs |
762 -2922 Days |
30 - 2374 Days |
| NCD |
State Bank of India |
1320.84 Lakhs |
862.46 Lakhs |
762 - 2922 Days |
30 - 2131 Days |
| NCD |
Punjab National Bank(E-OBC) |
3962.51 Lakhs |
3,166.85 Lakhs |
762 - 2922 Days |
30 - 2496 Days |
|
Total |
31,027.10 Lakhs |
18,900.78 Lakhs |
|
|
Further, amount defaulted during the year and paid before th( Balance
Sheet date are as under:-
| B. Amount paid before the year end |
Amount |
Delay/Default (in days) |
|
Principal |
Interest |
Principal |
Interest |
| IDBI Bank |
- |
1,274.52
Lakhs |
- |
1398 - 1463 Days |
| Kotak Mahindra Bank |
- |
31.89
Lakhs |
- |
1550 - 1672 Days |
| Life Insurance Corporation of India |
- |
91.84
Lakhs |
- |
2099 - 2220 Days |
| State Bank of India |
- |
42.52
Lakhs |
- |
1915 - 1977 Days |
| Punjab National Bank (E-OBC) |
- |
91.84
Lakhs |
- |
2221 - 2342 Days |
| Total |
- |
1,532.61
Lakhs |
- |
- |
Management's Explanations to Auditors' observation in the Annexure to
the Standalone Auditor's Report
Due to continuous losses and financial constraints, the Company has
defaulted/ delayed the interest payments accrued towards Lenders on account of Secured
Non-Convertible Debentures (NCDs) issued to the Lenders as per CDR terms for the period
ended March 31, 2025 and principal repayment of Secured NCDs accrued for the period ended
March 31, 2025 and till the date of signing of this report.
DETAILS OF FRAUD REPORTED BY AUDITOR
No fraud is reported by auditors under section 143(12) of Companies Act
2013.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place a Policy on prevention of Sexual Harassment in
line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention,
Prohibition & Redressal) Act, 2013 and has constituted the Internal Complaints
Committee to redress complaints received regarding sexual harassment. All employees
(permanent, contractual, temporary, trainees) are covered under this policy. During the
year under review the Committee/ Management has not received any complaint related to
Sexual Harassment.
POLICY ON PREVENTION OF INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015,
the Company has framed a) Code of Internal Procedures and Conduct for Regulating,
Monitoring and Reporting of Trading by Insiders and b) Code of Fair Disclosure. The
Company's Code, inter alia, prohibits purchase and/or sale of shares of the Company by an
insider, while in possession of unpublished price sensitive information in relation to the
Company and also during certain prohibited periods. Both the Codes are available at the
website of the Company.
CORPORATE GOVERNANCE
The Report on Corporate Governance as required under Regulation 34 read
with Schedule V of the SEBI Listing Regulations, 2015, forms part of this Annual Report
together with the Management Discussion and Analysis Report. Integrity and transparency
are key to our corporate governance practices to ensure that we gain and retain the trust
of our stakeholders and maintaining high standards of Corporate Governance has been
fundamental to the business of your Company. Corporate Governance Compliance Certificate
pursuant to the requirements of Regulation 27 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 is also forms part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act, the Board of Directors, to the
best of its knowledge and ability, confirm that:
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation relating to material
departures;
(b) The Directors has selected such accounting policies and applied
consistently and have made judgments and estimates that are reasonable and prudent, so as
to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the Profit and loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern
basis;
(e) The Directors had laid down internal financial controls to be
followed by the Company and such internal financial controls are adequate and were
operating effectively;
(f) The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
APPLICATION/PROCEEDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016
An application/petition has been filed under section 7 of Insolvency
and Bankruptcy Code, 2016 ("IBC") by M/s IDBI Trusteeship Services Limited,
Debenture Trustee acting on behalf of Lenders/ financial Creditors, before the National
Company Law Tribunal, Mumbai Bench for seeking initiation of Corporate Insolvency
Resolution Process (CIRP) against the Company on April 2, 2024. On August 7, 2025 the
written submissions by both parties have been submitted to the Court, and the Order has
been reserved.
The Company has received a Notice from the Debenture Trustee of the
Company i.e. M/s IDBI Trusteeship Services Limited under Section 13(2) of the
Securitisation and Reconstruction of the Financial Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI) on November 21, 2024 to enforce its security Interest in
respect of Secured Assets of the Company. Consequently, the Officials of M/s IDBI
Trusteeship Services Limited (Debenture Trustee) and M/s IDBI bank Limited (Lead Banker)
have visited office premises of the Company and have taken symbolic possession of the
mortgaged properties of the Company situated at Jalandhar and Mohali under the provisions
of Section 13 (4) of the SARFAESI Act 2002.
Further, on February 11, 2025, M/s IDBI Trustee given notice to
Company, u/ s 13(8) read with rules 8 (6) of SARFAESI Act , 2002 for sale of above
mentioned both properties after 30 days of receipt of said notice. M/s IDBI Trusteeship
Services Limited published a notice in the newspaper dated March 29, 2025, regarding an
e-auction for the sale of the Company's immovable properties. However, the scheduled
e-auction on May 6, 2025, did not materialize.
Company has again received two notices under SARFAESI Act, 2002 under
the provisions of Section 13 (4) and Section 13 (8) on August 4th 2025 and August 6th 2025
respectively in which 30 days period is given to company for payment of dues and in case
of non-payment by company in 30 days then M/s IDBI Trusteeship Services Limited will
proceed to sell the secured assets through a public auction as per the provisions of the
SARFAESI Act 2002.
ONE TIME SETTLEMENT WITH ANY BANK
There was no one time settlement with any Bank.
ACKNOWLEDGEMENTS
The Directors place sincere appreciation to the Company's employees,
customers, vendors, investors and partners for their continuous support. The Directors
also thank the Department of Telecommunications, Financial Institutions, Banks, Lenders
and the various Central and State Government Departments, Business Associates,
Shareholders and Subscribers.
The Directors also extend their deep appreciation to the employees for
their continuing support and unstinting efforts in ensuring an excellent all-round
operational performance.
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