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Tamil Nadu Telecommunications Ltd.

BSE: 523419 Sector: Engineering
BSE 00:00 | 23 Mar 6.33 0.20






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OPEN 5.87
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Mkt Cap.(Rs cr) 29
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OPEN 5.87
CLOSE 6.13
52-Week high 10.27
52-Week low 5.87
Mkt Cap.(Rs cr) 29
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tamil Nadu Telecommunications Ltd. (TNTELE) - Director Report

Company director report


The Members

The Board of Directors hereby submits the Thirty Fourth Annual Report of the Companywith Audited Financial Statements for the period from 1st April 2021 to 31st March 2022along with the Auditors Report.


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

(Rs. in Lakhs)

Particulars 2021-22 2020-21
Revenue from operations - -
Other Income (Net) 2.15 6.54
Total Revenue 2.15 6.54
Total Expenditure 193.83 152.12
Finance Charges 822.05 808.87
Extraordinary / Exceptional items (2.45) -
Gross Profit / (Loss) after interest before Depreciation & Tax (1016.18) (954.45)
Depreciation and Amortization Expense 28.19 34.81
Provision for Taxation / Deferred Tax - -
Net Profit / (Loss) (1044.37) (989.26)
Other Comprehensive Income /(Loss):Item that will not be reclassified to Profit and Loss (5.18) 8.97
Total Comprehensive Income/(Loss) for the Period (1049.55) (980.29)

The net loss after Tax is Rs.(1049.55) lakhs against net loss of Rs.(980.29) lakhs madeduring the previous year.

Review of Operations

During the year under review the company's other income was Rs.2.15 lakhs. Due tonon-availability of raw fiber there is no operation in the company.

You are aware that the Company is passing through a tough period for past severalyears. The plant is still non-operational but your management is trying hard to revive thecompany.

During the year management has explored the possibility of various ways to monetizethe company based on the detailed project report (DPR) submitted by the renownedConsultant. With your support the company may start earning revenue from the next year.

Market Scenario and Outlook

Fiber Optics Market Rising at 10.3% CAGR to Reach USD 9.73 Billion by 2027.CompaniesProfiled in the global fiber optics market. The global fiber optic cable market(henceforth referred to as the market studied) was valued at USD 9236.5 million in 2020and it is expected to reach USD 20832.6 million by 2026 registering a CAGR of 14.5%during the period 2021-2026 (henceforth referred to as the forecast period). Increasingdemand in FTTX and telecommunications industry and technological advancements areprimarily responsible for the increased growth of the market.

The optical fibers are getting smaller and smaller to the deployment challenges beingraised by end-use applications. As telecom operators started looking for high fiber countcables in reduced diameters optical fiber and cable manufacturers are investing inresearch and development to realize smaller fibers and cables. These cables will bedeployed for FTTx and 5G networks. Moreover in the past few years cloud and contentproviders attempted to attract more users and offer reliable bandwidth-intensive servicesthus increasing the popularity of submarine infrastructure. The lifetime for submarinecable is expected to be about 25 years.

Optical fiber cable (OFC) is a significant building block in the telecommunicationinfrastructure. Over the last decade fiber optics are catering to aggressive bandwidthdemands especially telecommunication companies and have become the preferredtransmission medium.

The explosion of data traffic from various sources such as the internet e-commercecomputer networks and multimedia (voice data and video) has led to the need for atransmission medium capable of handling higher bandwidth for handling such vast amounts ofinformation. Fiber optic cables with comparatively infinite bandwidth have proven to bethe solution.

Optical fiber is seen as an ideal solution for reliable and secure connections amongIoT devices. The emergence of IoT and cloud computing has led to higher bandwidth andbetter connectivity in workplaces and commercial office buildings which in turn willspur opportunities for the market. The rising implementation of fiber optic for monitoringof asset locations temperature and oil reserve levels in industries will further enhancethe growth of the market in the forthcoming years. The rising proclivity to improve datatraction security parameters and product automation will promote the growth of themarket during the forecast period. Furthermore the integration of cloud computing andfiber connectivity for constant streamline workflow will foster the growth of the market.Similarly the adoption of cloud computing by many companies for customer relationshipmanagement (CRM) tools will simultaneously offer impetus to market. The rising cognizanceof fiber optic including higher bandwidth speed capabilities superior performance andenhanced security will bode well for the market in the forthcoming years.

Rising Demand for Higher Bandwidth to Aid Expansion in North Asia. The rising adoptionof fiber optical systems in an electric power grid pipelines highways railwaysairports data centers will enhance the market potential in the forthcoming years. NorthAsia is predicted to witness a substantial growth rate during the forecast period owing tothe rising need for higher bandwidth in communication and data services. Company isexpected to rise tremendously during the forecast period owing to the rising demand forfiber optics in the region.

Cautionary Statement

Statements in the Boards' Report contain forward looking statements. Actual resultsperformances or achievements may vary materially from those expressed or implieddepending upon economic conditions Government policies subsequent developments and otherincidental factors.

Risk & Concern

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


In accordance with Sec.152 (6) and (7) of the Companies Act 2013 read with Articles79 & 80 of the Articles of Association of the company Shri J Ramesh Kannan (DIN09292181) and

Shri. R. Karthikeyan (DIN 00824621) will retire from the directorship of the companyby 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 theCompany hereby state and confirm that -

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

b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2022 and the loss of the Companyfor the year ended on that date.

c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecomparative growth in OFC market future prospects of the Company with the support ofTCIL.

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

f) They have devised proper system to ensure compliance with all provision of allapplicable 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 andread with Rule 12 (1)of the Companies (Management and Administration) Rules 2014 theAnnual Return (Form MGT-7) for the financial year ended March 312021 is available on theCompany's website and can be accessed at The extractof the Annual Return in Form MGT-9 has been attached.

Corporate Governance

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

Clarification on Practicing Company Secretaries observations is given below:

1. Due to non-appointment of Independent Directors the Company has not complied withRegulations 17(1) (b) 18 (1) 19(1) and 25 (3) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 in terms ofminimum number of Independent Directors in the Board Constitution of Audit Committee andconducting a separate meeting of Independent Directors respectively.

Company’s reply:

Points No (1): The Company is Joint sector Govt. Company with 49% of its sharesheld by TCIL a Govt. of India Enterprise and 14.63% held by TIDCO a Govt of TamilnaduEnterprise. Being a Govt. Company action has already been taken for induction ofIndependent Directors Constitution of Audit Committee as per 18 (1) and Constitution ofNomination and Remuneration Committee as per regulation 19(1) of SEBI LODR andseparate Independent Directors Meeting as per 25 (3) of SEBI LODR shall be conducted afterappointment of required number of Independent Directors by the Ministry ofTelecommunications.

Energy Technology and Foreign Exchange

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

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

(i) Mrs.R. Lilly I.A.S. was appointed as Nominee Director on 25.08.2022 during theyear.

(ii) Shri R. Karthikeyan was appointed as Nominee Director on 25.08.2022 during theyear.

(iii) Shri. Sanjay Bharti Kumar was appointed as Managing Director on 27.05.2021 inplace of Shri P.V.Sreekanth on his cessation on 27.05.2021 during the year.

(iv) Shri. J. Ramesh Kannan CFO was also appointed as Managing Director on 25.08.2021in place of Shri. Sanjay Bharti Kumar on his cessation on 27.05.2021 during the year.

(v) Shri.B.Ramakrishnan Director died on 14.05.2021 due to covid. His cessation wasrecorded in the meeting held on 27.05.2021 during the year.

(vi) Shri Kamendra Kumar Director and Chairman superannuated on 31.03.2022. Hiscessation was recorded in the meeting held on 20.05.2022.

(vii) Shri J. Ramesh Kannan Chief Financial Officer (CFO) and Ms. Swapnil GuptaCompany Secretary and Compliance Officer of the Company continued to hold their poststhroughout the year under review. Their position remains same during the year.


The Managing Director CFO and Company Secretary were on deputation from the PromoterCompany TCIL which is a Govt. of India Enterprise holding 49% stake in the Company. Hencetheir remuneration was as per the scales applicable to their cadre in the promotercompany.

The number of permanent employees as on 31.03.2022 was 64 excluding three officials ondeputation from the promoter company.

None of the employees drew remuneration of Rs.6000000/- or more per annum /Rs.500000/- or more per month during the year. This information is furnished as requiredunder 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 verycordial. During the year employees were given training on lying of Optical cable OFCsplicing OFC construction work etc. TTL has been encouraging its employees to come outwith innovative suggestions which will pave way for significant cost savings as well asoverall development of the company.

During the year 2018-19 M/s. Telecommunications Consultants India Limited decided tohelp TTL employees by taking them on deputation to work in their various projects in Indiawhich helps the employees to acquire new skill and experience in services of communicationindustry. All employees joined in TCIL on deputation except 7 employees.

Quality Management Systems

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

Internal Control System

TTL has adequate internal control procedures in respect of all its operations. It haslaid down internal control procedures to ensure that all assets are safeguarded andprotected against loss from unauthorized use or disposition and transactions areauthorized recorded and reported correctly. Internal Audit is being carried out byIndependent Audit Firm of Chartered Accountants on an ongoing basis and it recommendsappropriate improvements apart from ensuring adherence in company policies as well asregulatory 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.


In a view of the losses your Directors have not declared any dividend during the yearunder review.


During the year under section 73 and the rules may be called the Companies (Acceptanceof Deposits) Rules 2014 the Company has neither accepted nor renewed any deposits frompublic 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 undersection 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 theReport of Board of Directors) Rules 1988 with respect to R&D are not applicable toyour Company.

Particulars of Loans guarantees or investments made under section 186 of the CompaniesAct 2013.

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

Unsecured Loan

The unsecured loan amounting to Rs.138.45 crores as on 30.06.2022 is from related partyi.e. holding company has been taken on long term basis without any stipulation forrepayment and other terms.

Information under section 197 of the Companies Act 2013 read with rule 5(2) of thecompanies (appointment and remuneration of managerial personnel) rules 2014 regardingemployee’s remuneration.

Information as per Section 197 of the Companies Act 2013 read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is notapplicable 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 ofthe limits prescribed under of the Companies Act.

Statement under section 134(3)(p) of the Companies Act 2013 regarding formal annualevaluation made by board of its performance and that of its committees and individualdirectors.

In terms of the notification dated 05.06.2015 issued by Ministry of Corporate Affairsthe company has been exempted from the above provision and hence the disclosure is nolonger required.

Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year to which the financialstatements relates and the date of the report.


Information under section 134(3)(n) of the Companies Act 2013 concerning developmentand implementation of risk management policy.

The company's operations are completely stopped only limited assistance being given bythe holding company which has a well-defined risk management policy. Your company has notdeveloped and/or implemented the Risk management policy on its own.

Details of application made or proceeding pending under Insolvency and Bankruptcy Code2016.

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

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

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

Information under Regulation 24A of SEBI Circular CIR/CFD/ CMD1/27/2019 Dt 8/02/2019from the Practicing Company Secretary.

Pursuant to Regulation 24A of SEBI Circular CIR/CFD/ CMD1/27/2019 Dt 08.02.2019 everyListed Company and every public company shall additionally on an annual basis require acheck by the PCS on compliance of all applicable SEBI Regulations and circulars/guidelines issued there under consequent to which the PCS shall submit a report to thelisted entity in the manner specified in this circular. Annual secretarial compliancereport applicable to listed entities with effect from the financial year ended March312019 onwards.

Every year a report is obtained from Practicing Company Secretary (PCS) and Submittedto the Board. The Annual Secretarial Compliance Report for the Financial Year ended31.03.2021 forms part to the Report.

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

Your Company is in process of making the Whistle Blower Policy/ vigil mechanism fordirectors and employees to report concerns about unethical behaviour actual or suspectedfraud or violation of your Company's Code of Conduct. Adequate safeguards are providedagainst victimization to those who avail of the mechanism will be provided soon.


In terms of Section 139 of the Companies Act 2013 the Comptroller and Auditor Generalof India (CAG) had appointed Chartered Accountants as the Auditors of the company for theyear 2022-23 at a remuneration of Rs.100000/- besides reimbursement of traveling andout-of-pocket expenses at actual subject to the other items and conditions as specifiedby the CAG.

Independent Auditor’s Report

Clarification on Auditors observations is given below:

Basis for Adverse Opinion

1. The Company's financial statements have been prepared using the going concernassumption of accounting. However the Company's accumulated losses of Rs.1828121320/-(including a loss of Rs.104954686/- incurred during the FY 2021-22) has eroded the NetWorth of the Company indicating the existence of material uncertainty that may cast adoubt about the Company's ability to continue as a Going Concern. The Company has notoperated its factory since 2017 and NO sales effected for more than three years. It isalso pertinent to note that power connections in the factory are disabled. Further asrepresented by the company the machineries would involve major overhauling cost to resumeoperations and the company is also unable to obtain support for supply of major rawmaterial required for manufacture from its supplier. Also the company has not bagged anynew orders to substantiate the going concern assumption.

/4s per Standard on Auditing (SA) 570 "If the financial statements have beenprepared using the going concern basis of accounting but in the auditor’s judgmentmanagement’s use of the going concern basis of accounting in the financial statementsis inappropriate the requirement in paragraph 21 for the auditor to express an adverseopinion applies regardless of whether or not the financial statements include disclosureof the inappropriateness of management’s use of the going concern basis ofaccounting."

Hence considering the cumulative effect of the factors detailed in the above paragraphin the revival of the company we conclude that the Going Concern assumption of themanagement in preparation of financial statements is inappropriate.

2. The Company has not recognized the following financial liability/asset at Fair Valuein terms of IndAS 109 (including comparative figures as of 31st March 2021) and impact ofthe same on the financial Statements is not ascertainable.

i) Amounts due to M/s Fujikura Limited amounting to Rs. 20030600/- (Previous Year-Rs. 19807090/-)

ii) Trade Receivables (considered good) amounting to Rs. 70665510/- (Previous Year-Rs. 71362110/-)

iii) Unsecured Trade Payables amounting to

Rs. 33704875/- (Previous Year -

Rs. 34114712/-).

Emphasis of Matter

1) We draw attention to Note No.28 (Sl.No.22) of the explanatory notes to the financialstatements which states the reason for non-recognition of amounts due to the holdingCompany viz. Telecommunications

Consultants India Limited amounting to Rs.1358129112/- (Previous Year -Rs.1261887189/-) at Fair Value in accordance with

IndAS 109 and impact of the same on the financial statements is not ascertainable andOur opinion is not modified in respect of this matter.

2) Attention is invited to Note Nos. 3581415 of the notes to financial statementswhere the balances carried in the debtors creditors advances & deposits payable /recoverable are subject to confirmation from all parties (other than TelecommunicationsConsultants India Limited) as stated in Note No.28 (Sl. No. 2). The impact if any onfinancial statements is not ascertainable and Our opinion is not modified in this respect.

3) Attention is invited to Note No. 28 (Sl. No. 19) of the explanatory notes to thefinancial statements which states that the Company has not received information fromvendors regarding their status under the Micro Small and Medium Enterprises DevelopmentAct 2006. Hence the disclosure relating to amounts unpaid as at the year end togetherwith interest paid / payable under this Act could not be ascertained. Our opinion is notmodified in this respect.

Company’s Reply to Basis of Adverse Opinion Para 1 of Going Concern Assumption.

The requirement of OFC in the country is huge. TCIL and TIDCO to provide orders onnomination basis as both TCIL and Tamilnadu state government have huge orders to implementthe Bhartnet projects. Efforts are being made to obtain Preferential orders from TamilNadu Fibrenet Corporation (TANFINET) State PSU for supplying Optical Fiber Cable inTamilnadu. The DOT discussed in the meeting held on 07.03.2019 with regard to takeover ofTTL by BSNL it is suggested by Ministry to BSNL to utilise the capacity of TTL since BSNLrequirement is 100000 km per annum against TTL capacity of 10000 km per annum. Thereforethe order booking position is expected to be good in the near future. Renowned real estateconsultant has been appointed to monetization of vacant land. Considering the likely orderin the near future and with the promoter's financial support the accounts have beenprepared on Going Concern Basis.

As mentioned in our financials TTL is regularly borrowing from our holding companyTCIL for its raw material support and working capital support for running day to dayoperations. The balances of current liabilities and trade payable pertaining to relatedparty /our holding company TCIL as on 31/03/2022 are given below:

(i) Current liabilities - short term borrowing

(a) Bridge Loan Rs.116573000/-
(b) Working capital support loan Rs.187141687/-
(ii) Trade payable - Sundry creditors for raw material support Rs.588886577/-
(iii) Other current liabilities - interest accrued Rs.465527849/-

Amounts due to Fujikura Limited amounting to Rs.20030600/-

Trade Receivables (considered good) amounting to Rs.70665510/-

Unsecured Trade Payables amounting to Rs.33704875/-

This is to state that the above items are reviewed and monitored on day to day basis inboth TTL and TCIL. The balances are periodically reconciled with TCIL and also approved byboard of directors of TTL.

It may not be out of place to mention that all the realizations from TTL clients arerouted through Escrow account which is auto credited to TCIL's Account for which standinginstructions have been given to bank. Moreover charge has been created in favour of TCILagainst fixed assets and current assets of TTL for all the TCIL loans advances andliabilities towards raw material supply. The loans are repayable on demand basis.

Ind AS 109 requires all financial assets/liabilities to be recognised initially at fairvalue and subsequently at amortised cost it satisfies the criteria with reference to IndAs 32 Para 11 and para 4.2.1 of Ind As 109. Since these financial assets/ liabilities arecurrent in nature there is immaterial finance cost/ income involved therefore as ageneral practice demand deposits are carried at cost and not at fair value/amortisedcost.

In view of the commitment to pay to TCIL the holding company/ related party on demandbasis and the company is taking a conservative approach management assume book value ofcurrent liabilities at a amortized cost i.e instead to book profit by discountingliabilities the company prefers to go and disclose liabilities with full amount under lawof prudence.

Company's Reply to Para 2 of Emphasis of Matter regarding balances carried in thedebtors creditors advances & deposits payable/recoverable are subject toconfirmation from all parties (other than Telecommunications Consultants India Limited)

Wherever possible the Company is getting confirmation. Since TTL does not have fund topay to the Creditor including M/s. Fujikura the company does not ask for balanceconfirmation from any Creditors which will trigger to make payment.

Company's Reply to Para 3 of Emphasis of Matter regarding Company has not receivedinformation from vendors regarding their status under the Micro Small and MediumEnterprises Development Act 2006.

As stated in Notes to Accounts No.19 the Company has not received information from thevendors regarding their status under the Micro Small and Medium Enterprises DevelopmentAct 2006.

Cost Auditors:

As per the provisions of the Companies (Cost Records and Audit) Rules 2014 theoperation of the company is not falling

within the scope of cost audit. Hence cost auditor was not appointed for the financialyear 2021-22.

Secretarial Audit Report

Clarification on Secretarial audit observations is given below:

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

Management reply to the observation:

Point No (i) The Company is Joint sector Govt. Company with 49% of its shares heldby TCIL a Govt. of India Enterprise and 14.63% held by TIDCO a Govt of TamilnaduEnterprise. Being a Govt. Company action has already been taken for induction ofIndependent Directors Constitution of Audit Committee as per 18 (1) and Constitution ofNomination and Remuneration Committee as per regulation 19(1) of SEBI LODR and separateIndependent Directors Meeting as per 25 (3) of SEBI LODR shall be conducted afterappointment of required number of Independent Directors by the Ministry ofTelecommunications.


The Directors wish to place on record their sincere appreciation for the encouragementassistance support and co-operation given by Government of India Government of Tamilnaduand the Promoters. The Directors appreciate your whole hearted efforts during the year andsolicit your continued support and co-operation. Your Directors acknowledge the continuedtrust and confidence you have reposed in this company.

For and on behalf of the Board
Place: Chennai J.Ramesh Kannan B.Elangovan
Date:04.08.2022 Managing Director Director
(DIN 09292181) (DIN 00133452)