Paramount Communications Ltd

Dear Shareholders,

I am pleased to present the FY 2021-22 annual report of your Company. The year saw us focusing on core strengths to deliver yet another resilient performance and better value to stakeholders, in spite of a challenging macroeconomic situation, unprecedented increase in input costs and supply chain constraints. Alongside, we made progress on various strategic imperatives including strengthening market reach, establishing good export base and innovating.

Interestingly, we have delivered a 12% volume growth, including over 250% growth in the export markets, which manifests the strong demand that our products command owing to their superior performance and quality. As a manufacturer of world-class and differentiated wires and cables, we are inspired more than ever to build on our legacy.

INDIAN ECONOMY STANDS OUT

FY 2021-22 began with the second and a more severe wave of COVID-19 pandemic. The country faced significant casualties. However, the monumental efforts by the Government to vaccinate majority of eligible populations kept the caseloads under check in the later part of the year. The various fiscal and policy initiatives undertaken greatly supported the economy and improved market sentiments. The Indian economy has been on a rise since then, barring some minor jolt in the last quarter due to the third wave and onset of Russia-Ukraine war.

Overall, the country clocked a GDP growth of 8.7% in FY 2021-22. Buoyancy was evident across all sectors. Perhaps the most important development and that relevant to us has been the revival in the infrastructure (especially the power sector), construction and real estate segments which were long muted. This bodes well for the long-term growth of the nation and will revive investment cycle.

Given the developments, the outlook for the Indian economy for FY 2022-23 is strong. This is despite setbacks seen across major global economies which are facing recessions and high inflation.

MANAGING THE ADVERSITIES

While the demand for wires and cables witnessed a strong recovery, meeting them was a challenge due to supply side constraints amidst the disruptive operating context.

This necessitated a sharp focus on operations.

Adhering to the COVID-19 directives, we maintained the highest level of health and safety protocols at both plants and offices. Further, we adopted a structured approach with advanced planning, undertook proactive actions and leveraged our strong relations with global vendors. These measures ensured uninterrupted supplies and operations, and helped shorten the lead time to meet commitments on schedule.

Commodity fluctuation was a major challenge, especially during the last quarter due to the geopolitical situation. However, our strict policy of booking all commodities at the time of order booking helped in mitigation.

The Company also contributed strongly to the nationwide efforts in combating the COVID epidemic. We have organized vaccination drive, undertook regular health check-ups of employees, implemented sanitization procedures, work from home facility for employees and distribution of essential items were distributed to people in need.

DELIVERING RESILIENT PERFORMANCE

Our performance reflects the economic momentum and the agility with which we moved to overcome the challenges and capture opportunities. We took advantage of the revival in power sector which saw commencement of key projects as well as expanded our export base, to build a robust order book through the year.

As a result, your Company registered a 12% growth in revenue to ' 5,809 Million in FY 2021-22 to near the pre-pandemic levels. Power cables continued to be the major contributor at 42.5% with revenues stood at ' 2,466 Million. Exports revenue at ' 1,302 Million was also the highest ever, growing by a significant 250% over the previous year.

EBITDA grew by 26% from ' 1,922 Million in the previous year to ' 2,416 Million in FY 2021-22. Our PAT grew by 165%, standing at ' 82 Million as against ?31 Million in the previous year. The robust growth profitability was driven by a combination of top line growth and costs optimization, primarily the finance costs which declined by 9.1%. Our debt:equity ratio stands at a comfortable

0.93 as on March 31, 2022 and provides adequate headroom to pursue growth opportunities.

CAPITALIZING THE DOMESTIC INFRASTRUCTURE BOOM

I think the coming years are going be exciting for India?s wires and cables industry. A revival in the economy and huge pipeline of infrastructure projects announced by Indian government, especially in the power transmission and distribution areas are driving strong recovery in the domestic demand.

We are also optimistic of the government?s ambitious push to take quality broadband services to rural areas. The recently concluded 5G spectrum auction and its expected rollout in the coming months with mega optical fibre network deployment, will create opportunities. Railway cables is another segment that which we are positive on. The increased budgetary allocation by the Indian Railways towards developing high-speed rail and new metro rail projects are likely to push demand. Lastly, the revival in real estate is also set to unleash opportunities in the household segment.

FOCUSING ON EXPORTS DOMINANCE

Our products are certified from multiple global agencies and find strong acceptance in various markets. However, building on this, in FY 2021-22, we have put in great efforts to expand our export base with special focus on developed countries. A dedicated team has been engaged to continually work towards increasing cost and design efficiency of export products and maintaining strong quality control to enhance global approval and product range.

This helped in strengthening brand recall in the new and existing markets.

We see exports as an important pillar of our growth strategy and look forward to building on the groundwork undertaken till now. This also comes at a time when India is fast emerging as an exporting hub for the world. We expect a combination of these to translate into exponential export growth in the coming years.

IN CONCLUSION

I thank our shareholders, customers, channel partners and employees for the continued support and belief in us.

Your Company has come a long way since restructuring. We are now focused on breaking free from existing constraints and delivering high growth in coming years by leveraging our strong domestic position and becoming one of the top exporters in the Indian wire and cable industry. We will be on the lookout for strengthening our retail and expanding our capacities to achieve this.