Tamil Nadu Telecommunications Ltd

To

The Members

The Board of Directors hereby submits the Thirty Seventh Annual Report of the Company with Audited Financial Statements for the period from 1st April 2024 to 31st March 2025 along with the Auditors Report.

FINANCIAL HIGHLIGHTS

The financial performance of your company is as given below:-

(Rs. in Lakhs)

The net loss after Tax is Rs. (1576.60) lakhs against net loss of Rs.(1459.91) lakhs made during the previous year.

Review of Operations

During the year under review, the company's other income was Rs. 69.54 Lakhs and the sale was still nil.

You are aware that the Company is passing through a tough period for past several years. The plant is still non-operational due to the requirement of huge fund for major repairing of very old machineries. But your management is trying hard to revive the company.

During the year, management has explored the possibility of various ways to monetize the company based on the Detailed Project Report (DPR) submitted by the renowned Consultant.

With your support the company is expected to start earning revenue from the next year.

Market Scenario and Outlook

The market is expected to grow significantly in the coming years, with forecasts projecting strong CAGR growth, making India a key manufacturing hub for high-quality optical fiber and a growing consumer of its advanced infrastructure.

The outlook for optical fiber in India is highly positive and rapidly growing, driven by the amended Bharatnet Program for connecting Gram Panchayats & villages, widespread adoption of 5G, the expansion of Fiber-to-the-Home (FTTH) services, and strong government initiatives like Digital India and Smart Cities Mission.

India's digital terrain is changing at a rapid speed. There are more than 969 million internet users in India. Widespread smartphone use, the rising popularity of online services such streaming, e-commerce, and remote work all help to drive this explosion. As a result, India's digital infrastructure must include optical fiber since the need for fast internet / intranet.

Top Impacting Opportunities/Drivers:

Government initiative: Optical fiber demand is being raised in great part by government projects as BharatNet and the Smart Cities Mission. BharatNet connects approximately 2.50 lakh Gram Panchayats using optical fiber to close the urban-rural digital divide, therefore offering high-speed broadband to rural areas. There is a huge requirement of optical fiber cable more than 5 lakhs kms.

Implementation of 5G: The rollout of 5G technology requires substantial investment in fiber optic networks to handle increased data traffic and deliver high-speed, low-latency services. Fiber optic networks play a crucial role in 5G networks by providing high-capacity backhaul connections. They ensure fast and reliable data transmission between cell towers and core network infrastructure, thus supporting the high-speed wireless connectivity promised by 5G technology. Telecom leaders are relying on fiber optic cable to fulfill the extensive demand for 5G connectivity.

Fiber to the Home (FTTH) connectivity: FTTH is a popular integrated communication technology that uses fiber optic technology to enable faster and more effective communication. The technology connects homes to the operator through optic fiber wires. It is the most advanced technology for building the next generation of communication networks. For instance, Broadband connections are used by more than 944 million customers.

Technological advancements in the fiber optic cable technology: With ongoing technological development, the optical fiber market in India seems to have bright future.

Companies are looking at novel materials and approaches to improve optical fiber endurance and efficiency to transport ultra-high speed data.

Increased Investments: Significant investments are being made by both public and private sectors in building and expanding optical fiber network infrastructure.

Cautionary Statement

Statements in the Boards' Report contain forward looking statements. Actual results, performances or achievements may vary materially from those expressed or implied, depending upon economic conditions, Government policies, subsequent developments and other incidental factors.

Risk & Concern

The industry is facing challenging cost pressures as the cost of major raw materials are going up due to shortage & increase in oil prices. The variations in exchange rate fluctuation are also a threat towards cost of production. The competition within OFC business is becoming fierce due to emerging new technologies and frequent new product introductions in Optical fiber products which command competitive prices and preference in the market. The market price of cables is also varying due to competition.

Directors

In accordance with Sec.152 (6) and (7) of the Companies Act, 2013, read with Articles 79 & 80 of the Articles of Association of the company, Shri S.K.Tata (DIN 10388959) and Tmt R. Bhuvaneswari, (DIN 06370681), will retire from the directorship of the company by rotation and being eligible, offer themselves for re-appointment.

Directors' Responsibility Statement

As required under Section 134(5) of the Companies Act, 2013, the Directors of the Company hereby state and confirm that -

a) In the preparation of the annual accounts the applicable accounting standards had been followed.

b) They have selected such accounting policies and applied them consistently and 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 as at 31st March 2025, and the loss of the Company for the year ended on that date.

c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d) They have prepared the annual accounts on a going concern basis considering the comparative growth in OFC market, future prospects of the Company with the support of TCIL.

e) They have laid down internal financial control to be followed by the company and that such internal financial control is adequate and was operating effectively.

f) They have devised proper system to ensure compliance with all provision of all applicable laws and that systems were adequate and operating effectively.

Extracts of the Annual Return

Pursuant to the amendments to Section 134(3)(a) and Section 92(3) of the Act, 2013 and read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the Annual Return (Form MGT-7) for the financial year ended March 31,2025, is available on the Company's website and can be accessed at https://ttlofc.in/AnnualReturn.html. The extract of the Annual Return in Form MGT-9 has been attached.

Corporate Governance

A report on Corporate Governance with the Practicing Company Secretaries Certificate on compliance with conditions of the Corporate Governance has been attached as to form part of the Report.

Clarification on Practicing Company Secretaries observations is given below:

1. Due to the non-appointment of Independent Directors, the Company has not complied with Section 149(4), 177(1), 178(1), and Schedule IV of the Companies Act, 2013 as well as with Regulations 17(1) (b), 18 (1), 19(1) and 25 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in terms of minimum number of Independent Directors in the Board, Constitution of Audit Committee, and conducting a separate meeting of Independent Directors respectively.

Company's reply:

Points No (1): The Company is Joint sector Govt. Company with 49% of its shares held by TCIL, a Govt. of India Enterprise and 14.63% held by TIDCO, a Govt of Tamilnadu Enterprise. Being a Govt. Company, action has already been taken for induction of Independent Directors Constitution of Audit Committee as per 18 (1) and Constitution of Nomination and Remuneration Committee as per regulation 19(1) of SEBI LODR and separate Independent Directors Meeting as per 25(3) of SEBI LODR shall be conducted after appointment of required number of Independent Directors by the Ministry of Telecommunications.

Energy, Technology and Foreign Exchange

Particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Sec.134 (3)(m) of the Companies Act, 2013 are enclosed as part of the Report.

Details of director or Key Managerial Personnel who were appointed or have resigned during the year.

(i) Tmt R. Bhuvaneswari, (DIN 06360681) was appointed as nominee Director on 21.05.2024 on the Board of Company.

(ii) Smt. Leena Rajput, (DIN 10388957) remains as Director and Chairperson of Audit and Internal Complaints Committee of the company during the year.

(iii) Shri D. Porpathasekaran, (DIN 09612667) remains as Director and Chairman of the company during the year.

(iv) Shri. J. Ramesh Kannan remains as Managing Director (DIN 09292181) and Chief Financial Officer (CFO) of the company throughout the year under review.

(v) Ms. Swapnil Gupta, Company Secretary and Compliance Officer of the Company, continued to hold her posts throughout the year under review. Her position remains same during the year.

Personnel

The Managing Director/CFO and Company Secretary were on deputation from the Promoter Company TCIL which is a Govt. of India Enterprise, holding 49% stake in the Company. Hence their remuneration was as per the scales applicable to their cadre in the promoter company.

The number of permanent employees as on 31.03.2025 was 61 excluding two KMP officials on deputation from the promoter company.

None of the employees drew remuneration of Rs.60,00,000/- or more per annum Rs.5,00,000/- or more per month during the year. This information is furnished as required under Rule 5(2)(i) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Human Resources

Your company is glad to announce that the industrial relations continue to be very cordial. During the year, employees were given training on lying of Optical cable, OFC splicing, OFC construction work etc. TTL has been encouraging its employees to come out with innovative suggestions, which will pave way for significant cost savings as well as overall development of the company.

During the year 2018-19, M/s. Telecommunications Consultants India Limited decided to help TTL employees by taking them on deputation to work in their various projects in India which helps the employees to acquire new skill and experience in services of communication industry. All employees joined in TCIL on deputation except 8 employees.

Quality Management Systems

It is reported that as a commitment in meeting global quality standards, your company already has IS/ISO 9001:2015 quality management systems certification from Bureau of Indian Standards should continue. The license will be renewed after commencement of production.

Internal Control System

TTL has adequate internal control procedures in respect of all its operations. It has laid down internal control procedures to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and transactions are authorized, recorded and reported correctly. Internal Audit is being carried out by Independent Audit Firm of Chartered Accountants on an ongoing basis and it recommends appropriate improvements apart from ensuring adherence in company policies as well as regulatory compliance. The Audit Committee periodically reviews the audit findings.

Transfer to reserves

During the year under review no amount is being transferred to General Reserve Account.

Dividend

In a view of the losses your directors have not declared any dividend during the year under review.

Deposits

During the year under section 73 and the rules may be called the Companies (Acceptance of Deposits) Rules, 2014, the Company has neither accepted nor renewed any deposits from public during the year under review.

Corporate Social Responsibility

Since the Company is continuously incurring losses, no CSR policy has been devised.

Related Party Transactions

There was no contract or arrangements made with related parties as defined under section 188 (1) of the Companies Act, 2013 during the year under review.

Research & Development (R&D)

The information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 with respect to R&D are not applicable to your Company.

Particulars of Loans, guarantees or investments made under section 186 of the Companies Act, 2013

There were no loans, guarantees or investments made by the company exceeding the limits specified under Section 186 of the Companies Act, 2013 during the year under review and hence, the said provision is not applicable.

Unsecured Loan

The unsecured loan amounting to Rs.176.05 Crores as on 30.06.2025 is from related party i.e. holding company, has been taken on long term basis without any stipulation for repayment and other terms.

Information under section 197 of the Companies Act, 2013 read with rule 5(2) of the companies (appointment and remuneration of managerial personnel) rules, 2014 regarding employee's remuneration

Information as per Section 197 of the Companies Act 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable to your company as there is no employee on the rolls of the Company. Accordingly, there was no employee of the Company who received remuneration in excess of the limits prescribed under of the Companies Act.

Statement under section 134(3)(p) of the Companies Act, 2013, regarding formal annual evaluation made by board of its performance and that of its committees and individual directors

In terms of the notification dated 05.06.2015 issued by Ministry of Corporate Affairs, the company has been exempted from the above provision and hence the disclosure is no longer required.

Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year to which the financial statements relates and the date of the report

None

Information under section 134(3)(n) of the Companies Act, 2013 concerning development and implementation of risk management policy

The company's operations are completely stopped, only limited assistance being given by the holding company, which has a well-defined risk management policy. Your company has not developed and/or implemented the Risk management policy on its own.

Details of application made or proceeding pending under Insolvency and Bankruptcy Code 2016

During the year under review, there were no applications made or proceedings pending in the name of the company under the insolvency Bankruptcy Code, 2016.

Details of difference between valuation amount on one time settlement and valuation while availing loan from banks and financial Institutions

During the year under review, there has been no one time settlement of Loans taken from Bank.

Vigil Mechanism under section 177(9) of the Companies Act, 2013.

Your Company is in process of making the Whistle Blower Policy/ vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of your Company's Code of Conduct. Adequate safeguards are provided against victimization to those who avail of the mechanism will be provided soon.

Auditors

In terms of Section 139 of the Companies Act, 2013, the Comptroller and Auditor General of India (CAG) had appointed M/s. Sundaram & Srinivasan, Chartered Accountants as the Auditors of the company for the year 2024-25 at a remuneration of Rs.1,00,000/- besides reimbursement of traveling and out- of-pocket expenses at actual, subject to the other items and conditions as specified by the CAG.

INDEPENDENT AUDITOR'S REPORT

Clarification on Auditors observations is given below:

Basis for Adverse Opinion

1) We draw attention to Note 1(II)(a) Significant Accounting Policies & 31 which describes that the Company's financial statements have been prepared using the going concern assumption of accounting. However, the Company's accumulated losses of Rs.2,35,78,744 hundreds (including other Comprehensive Income) (Previous year Rs. 2,20,02,137 hundreds) has eroded the Net Worth of the Company, indicating the existence of material uncertainty that cast doubt about the Company's ability to continue as a Going Concern. The Company has not operated its factory since 2017, and no sales effected for more than five years. Further, as represented by the company, the machinery would involve major overhauling cost to resume operations, and the company is also unable to obtain support for supply of major raw material required for manufacture from its supplier. Also, the company has not bagged any new orders to substantiate the going concern assumption. Though the company had received a bid for granting of lease of the manufacturing facilities and factory premises, and issued Letter of Award to the lessee, the lessee had not taken over the premises and the lease income has not generated yet. Hence, considering the cumulative effect of the factors detailed above, we conclude that the Going Concern assumption of the management in preparation of financial statements is not appropriate.

2) In the view of the significant losses, which have been incurred by the company during the previous financial years, the carrying amount of fixed assets needs to be tested for impairment. The management has not done impairment testing and in absence of any information we are unable to comment as to whether any provision for impairment is required or not.

3) The following financial liability /assets referred to in the respective note of standalone financial statements, has been stated at historical cost only, irrespective of the fair value of the same, which is departure from requirement of Ind AS 113 (Fair Value Measurement) and Ind AS 109 (Financial Instruments):

a. Amounts due to M/s. Fujikura Limited amountingto Rs.2,10,061 hundreds (Previous YearRs.2,07,991) (In hundreds) (Note No 16)

b. Trade Receivables (considered good) amountingto Rs.4,67,708 hundreds (Previous YearRs.4,67,200) (In hundreds) (Note No 5)

c. Unsecured Trade payables amountingto Rs.3,67,050 hundreds (Previous YearRs.3,60,457) (In hundreds) (Note No 15)

d. Short Term and Long-Term Borrowings due to Telecommunications Consultants India Ltd (Parent Company) of Rs. 33,90,692 hundreds (Previous Year Rs.32,51,640 hundreds) (Note No 12 & 14).

Emphasis of Matter

1) We draw attention to Note No. 48 of the otherexplanatory notes to the financial statements which states the reason for non-recognition of amounts due to the holding Company viz., Telecommunications Consultants India Limited amounting to Rs.1,70,22,370 hundreds (Previous Year - Rs.1,57,85,738 hundreds) at Fair Value in accordance with Ind AS 109. Our opinion is not modified in respect of this matter.

2) Attention is invited to Note Nos. 5, 7, 9, 15, 16 & 17 of the notes to financial statements, where the balances carried in the Trade receivables, Other Financial Assets, Other Current assets, Trade payables, Other Financial liabilities, and Other Current Liabilities are subject to confirmation from all parties (other than Telecommunications Consultants India Limited) as stated in Note No. 29. Our opinion is not modified in respect of this matter.

3) Attention is invited to Note No. 45 of the other explanatory notes to the financial statements which states that the Company has not received information from vendors regarding their status under the Micro,Small and Medium Enterprises Development Act, 2006. Our opinion is not modified in respect of this matter.Company's Reply to Basis of Adverse Opinion Para 1 of Going Concern Assumption.