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Tejas Networks Ltd.

BSE: 540595 Sector: Telecom
BSE 00:00 | 16 Jun 175.55 -0.95






NSE 00:00 | 16 Jun 176.10 0.75






OPEN 176.90
VOLUME 26261
52-Week high 221.50
52-Week low 45.65
P/E 34.97
Mkt Cap.(Rs cr) 1,640
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 176.90
CLOSE 176.50
VOLUME 26261
52-Week high 221.50
52-Week low 45.65
P/E 34.97
Mkt Cap.(Rs cr) 1,640
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tejas Networks Ltd. (TEJASNET) - Director Report

Company director report


This report is prepared in accordance with the provisions of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (the "Listing Regulations") and the Companies Act 2013 (the"Act") and forms part of this Annual Report for the year ended March 31 2020.

Dear Members

The Directors are pleased to present the 20th Annual Report together with the auditedfinancial statements for the financial year ended March 31 2020. The consolidatedperformance of the Company has been referred to wherever required.

1. Results of our operations and state of affairs

in Rs. crore except per share data

Particulars Standalone Consolidated
2020 2019 2020 2019
Revenue from operations 386.20 894.03 390.54 900.32
Other Income 33.71 36.64 33.65 36.69
Total income 419.91 930.67 424.19 937.01
Cost of materials consumed 203.58 463.70 203.58 463.70
Employee benefit expense 103.22 117.60 110.52 123.66
Finance costs 7.57 16.88 7.72 17.00
Depreciation and amortization expense 77.05 65.88 77.05 65.88
Impairment of non-current assets 69.87 - 69.87 -
Allowance for expected credit loss (net) 18.81 5.17 20.03 5.24
Other expenses 77.42 111.97 73.99 111.51
Total expenses 557.52 781.20 562.76 786.99
Profit/(Loss) before tax (137.61) 149.47 (138.57) 150.02
Income tax expense
Current tax - 19.63 - 19.63
Deferred tax expense/ (benefit) 98.55 (16.85) 98.55 (16.85)
Total tax expense 98.55 2.78 98.55 2.78
Profit/(Loss) after tax (236.16) 146.69 (237.12) 147.24
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss (1.07) (1.72) (1.07) (1.72)
Items that will be reclassified to profit or loss - - 0.64 0.77
Total comprehensive income/(loss) for the year (237.23) 144.97 (237.55) 146.29
Retained earnings- opening balance 265.56 120.59 266.49 120.97
Add: Transferred from other reserve - - - -
Less: Items that will be reclassified to profit or loss - - 0.64 0.77
Impact on account of adoption of Ind AS 116 4.69 4.69
Dividend paid 9.19 9.19
Dividend distribution tax 1.89 1.89
Retained earnings- closing balance 12.56 265.56 12.53 266.49
Earnings/(Loss) per equity share
Equity shares of par value Rs. 10 each
Basic (25.66) 16.07 (25.76) 16.13
Diluted (25.66) 15.33 (25.76) 15.39

Financial Position

in Rs. crore

Particulars Standalone Consolidated
2020 2019 2020 2019
Bank balances and deposits with maturity up to three months 66.05 16.41 66.48 16.90
Bank balances other than above Current(1) 76.71 106.15 76.71 106.15
Deposits with original maturity of more than twelve months 1.11 0.12 1.11 0.12
Investment in mutual funds 50.97 86.55 50.97 86.55
Deposits with financial institutions disclosed under other current financial assets 85.00 160.00 85.00 160.00
Cash and cash equivalents including margin money 279.84 369.23 280.27 369.72
Net current assets(2) 522.47 578.73 534.06 590.59
Property plant and equipment 30.55 30.68 30.55 30.68
Right-of-use assets 21.29 - 21.29 -
Intangible assets (including under development) 53.80 109.82 53.80 109.82
Other non-current assets(3) 194.31 233.22 183.47 222.37
Total assets 1102.26 1321.68 1103.44 1323.18
Borrowings(4) - 1.19 - 1.19
Non-current provisions 0.59 1.75 0.59 1.75
Lease Liabilities 21.91 - 21.91 -
Total equity 1079.76 1318.74 1080.94 1320.24
Total equity and borrowings 1102.26 1321.68 1103.44 1323.18

 (1) Deposits with original maturity of more than three months butless than twelve months & Balances held as margin money or security against bankfacilities or guarantees (2) current assets net of current liabilities asdisclosed in balance sheet excluding the bank balances considered as cash and cashequivalents (3) excluding bank balances considered as cash and cash equivalents(4) including current borrowings and current maturities of long-term debt


During the year ended March 31 2020 our revenues declined by 57% largely due todecline in the revenues from India Govt by 88% India Private by 6% and International by31% on YoY basis. The India revenues declined due to 2 major factors- delays/ deferment ofcapital spending by India Govt. customers (such as BSNL/Bharatnet) and reduction incapital expenditure by private telecom operators post the supreme court judgement on AGRissue which led to a significant financial stress in the sector. While we madesignificant progress in our international sales efforts few of the deal closure werepushed out into FY21. Some of the orders in hand could not be fulfilled in Q4 due tologistics challenges arising from the COVID-19 outbreak.

• Standalone

Our net revenues (net of taxes and component sales) from operations on a standalonebasis declined by 56.9% to Rs. 375.45 crore in fiscal 2020. Domestic and export revenuesconstituted 68% and 32% of our total revenues respectively. Out of total revenue 68%(previous year 80%) came from India 11% (previous year 8%) came from Americas and 21%(previous year 12%) came from Rest of the World.

• Consolidated

Our net revenues (net of taxes and component sales) from operations on a consolidatedbasis declined by 56.7% to Rs. 379.79 crore in fiscal 2020. Domestic and export revenuesconstituted 68% and 32% of our total revenues respectively. Out of total revenue 68%(previous year 79%) came from India 11% (previous year 8%) came from Americas and 21%(previous year 13%) came from Rest of the World.

Profits / (Loss)

The loss was primarily on account of lower revenues while most of our operating costare fixed in nature related to manpower.

• Standalone

Our gross profit on a standalone basis amounted to Rs. 130.90 crore (34.9% of netrevenue) as against Rs. 359.77 crore (41.3% of net revenue) in the previous year. Thegross and net Research and Development (R&D) expenses were 29.1% and 11.2% of our netrevenues respectively for the year ended March 31 2020 compared to 13.3% and 5.8%respectively for the year ended March 31 2019. Selling and marketing costs were22.0% (previous year 9.7%) of our net revenue for the year ended March 31 2020. TheGeneral and administrative expenses were 6.2% (previous year 3.3%) of our net revenue forthe year ended March 31 2020. The operating profit amounted to Rs. (93.88) crore (-25.0%of net revenue) as against Rs. 129.71 crore (14.9% of net revenue) in the previous year.The profit before tax was Rs. (137.61) crore (-36.7% of net revenue) as against Rs. 149.47crore (17.2% of net revenue) in the previous year. The net profit was Rs. (236.16) crore(-62.9% of net revenue) as against Rs. 146.69 crore (16.9% of net revenue) in the previousyear.

On account of the ongoing review of the deferred tax assets during the year thecarrying amount of the deferred tax assets has been reduced by Rs. 98.55 crore on accountof the loss and based on the projected profitability. Hence the reduction in net profit inthe current fiscal.

• Consolidated

Our gross profit on a consolidated basis amounted to Rs. 135.24 crore (35.6% of netrevenue) for the year ended March 31 2020 as against Rs. 366.06 crore (41.8% of netrevenue) in the previous year. The gross and net Research and development costs were 28.8%and

11.1% of our net revenue for the year ended March 31 2020 as compared to 13.2% and5.8% for the year ended March 31 2019. Selling and marketing costs were 23.0% (previousyear 10.2%) of our net revenue for the year ended March 31 2020. The General andadministrative expenses were 6.2% (previous year 3.4%) of our net revenue for the yearended March 31 2020. The operating profit amounted to Rs. (94.63) crore (-24.9% of netrevenue) as against Rs. 130.33 crore (14.9% of net revenue) in the previous year. Theprofit before tax was Rs. (138.57) crore (-36.5% of net revenue) as against Rs. 150.02crore (17.1% of net revenue) in the previous year. The net profit was Rs. (237.12) crore(-62.4% of net revenue) as against Rs. 147.24 crore (16.8% of net revenue) in the previousyear. On account of the ongoing review of the deferred tax assets during the year thecarrying amount of the deferred tax assets has been reduced by Rs. 98.55 crore on accountof the loss and based on the projected profitability. Hence the reduction in net profit inthe current fiscal.

Expenditure on property plant and equipment – Standalone and Consolidated

On a standalone and consolidated basis during the year we incurred expenditure onproperty plant and equipment of Rs. 13.41 crore (previous year Rs. 13.40 crore)comprising Rs. 2.06 crore (previous year Rs. 3.96 crore) in Laboratory equipment Rs.0.21 crore (previous year Rs. 0.14 crore) in Networking equipment Rs. 1.00 crore(previous year Rs. 0.41 crore) in Electrical Installation Rs. 1.44 crore (previous yearRs. 2.86 crore) in Furniture and fixtures Rs. 0.82 crore (previous year Rs. 0.21 crore)in Office Equipment Rs. 0.98 crore (previous year Rs. 1.68 crore) in Computing EquipmentRs. 6.01 crore (previous year Rs. 2.54 crore) in Cards/Prototypes and Rs. 0.89 crore(previous year Rs. 1.60 crore) in Servers.

Capital Expenditure on intangible assets and intangible under development –Standalone and Consolidated

Our intangible assets comprise computer software and product development expenditures.Additions of Rs. 4.83 crore made in computer software as against Rs. 6.58 crore in theprevious year. During the year Rs. 44.60 crore (previous year Rs. 70.39 crore) wascapitalised from intangible under development to product development. Capitalised productdevelopment gets amortised over a period of 24 months.

Additions to intangible under development for the year amounted to Rs. 67.31 crore(previous year Rs. 64.92 crore) on account of capitalisation of employee benefit expenseand other expenses (refer note 24 and note 26 of standalone/consolidated financials). Wecarry the R&D assets in two forms - as CWIP and as capitalized product development.During the year the Company has recognised an impairment loss of Rs. 69.87 crore onspecifically identified R&D assets. The Company has discontinued further developmentof certain products R&D assets for which were captured as intangible assets underdevelopment as we do not foresee any future economic benefits from such assets andconsequently the entire development expenditure of Rs. 37.10 crore related to suchintangible assets under development has been impaired. Further in respect of certainidentified product development having a written down value of

Rs. 32.77 crore as Company does not foresee any future economic benefits based on thelikely demand for such products from the customers. Therefore the related productdevelopment costs have also been fully impaired as at March 31 2020.


We are a debt-free Company and maintain sufficient cash to meet our businessrequirements. We believe that there should be sufficient liquidity in the Balance Sheet tocover financial and business risks and support future growth. Our principal sources ofliquidity are cash and cash equivalents and the cash flow we generate from the business.

We have liquid assets of Rs. 279.84 crore and Rs. 280.27 crore on a standalone andconsolidated basis respectively as of March 31 2020 as compared to Rs. 369.23 crore andRs. 369.72 crore on standalone and consolidated basis respectively as of March 31 2019.

The cash and cash equivalents on both standalone and consolidated basis include balanceand deposits with banks investment in liquid mutual funds and deposits with financialinstitutions. The details of these investments and deposits are disclosed under the‘current investments and current financial assets' section in the standalone andconsolidated financial statements in this Annual report.

Earnings Per share

Basic earnings per share declined by 259.7% to Rs. (25.66) (previous year Rs. 16.07) atstandalone level and by 259.8% to Rs. (25.76) (previous year Rs. 16.13) on consolidatedbasis.


The Board of Directors periodically review the Company's ability and necessity todistribute dividends to its Shareholders with a view to preserve the profitability andlong term growth plans for the Company. While reviewing the necessity to distributedividend the Board of Directors take into account various factors including current andfuture earnings projections current and future cash flow projections capital expenditurerequirements for current and future projects contingencies regulatory politicaleconomic factors while making a determination to transfer retained earnings to reserves inentirety or partially for a given year and consequently may recommend to distributedividend upto 25% of the free cash flow of the corresponding financial year out ofretained earnings_after taking into account the relevant provisions of the Act. The Boardof Directors after considering holistically the relevant circumstances and keeping in viewthe Company's dividend distribution policy and the adverse impact of the pandemic-COVID–19 had on the operational performance of the Company and also since theCompany_has_incurred a loss have decided that it would be prudent not to recommend anyDividend for the year under review. The Company paid Re.1/- per equity share on a facevalue of Rs.10/- per share for year ended March 31 2019 as approved by the Shareholdersin their 19th Annual General Meeting.

In line with Clause 43A of the Listing Regulations the Board of Directors adopted aDividend distribution policy which sets out the parameters in determining the payment /distribution of dividend. The details of Dividend Distribution Policy is placed on theCompany's website at

Share Capital

During the year under review the Company has issued 491256 shares consequent to theconversion of the 384591 stock options and 106665 Restricted Stock Units into equityshares of the Company by the eligible employees of the Company and hence the outstandingpaid up equity share capital stands at Rs. 922108350 comprising of 92210835 equityshares of Rs.10/- each fully paid up as on March_31 2020.

Particulars of loans guarantees or investments

The Company makes investments or extends loans/ guarantees to its wholly ownedsubsidiaries for their business purposes as and when required by them for its emergentbusiness requirements. The details of loans guarantees and investments covered underSection 186 of the Act along with the purpose for which such loan or guarantee wasutilized by the recipient forms part of the Notes to standalone financial provided in theAnnual Report. During the year there were no loans guarantees or investments made by theCompany to its wholly owned subsidiaries either for their business purposes or for itsemergent business requirements.

Transfer to reserves

Since there were no profits during the year there was no transfer of amounts to thereserves.The loss for the year amounting to

Rs. 238.19 crore on a consolidated basis and Rs. 237.23 crore on a standalone basis forthe year ended March 31 2020 is debited to the profit and loss account.

Borrowings including fixed deposits

The Company is a debt free Company and has not accepted any fixed deposit includingfrom the public and as such no amount of principal or interest was outstanding as ofMarch 31 2020. However the Company has Non- fund based limit of Rs. 162.20 up (utilized)(previous year Rs. 179.91 crore).

Micro Small and Medium (MSME) Enterprises

With the objective of promotion and development and enhancing the competitiveness ofsmall and micro enterprises the Central Government vide notification dated November 22018 has directed that all Companies who get supplies of goods or services from micro andsmall enterprises and whose payments to micro and small enterprise suppliers exceed fortyfive days from the date of acceptance or the date of deemed acceptance of the goods andservices shall furnish details about the amounts due and the reasons for delay thereof.

The Company as on March 31 2020 has made payments to all MSME suppliers within 45 daysfrom the date of acceptance and there are no outstandings as on March 31 2020 Further theCompany has registered with Trade Receivables Discounting System (TReDS) in compliancewith Notification No. 5621 dated November 2 2018 issued by Ministry of Micro Small andMedium Enterprises which requires companies with a turnover of more than Rs. 500 crore tobe registered on the platform. The Company as on March 31 2020 continues to be an MSMEand categorized as "Small Enterprise" by the Ministry of Micro Small and MediumEnterprises.

Credit Rating

ICRA Limited have reaffirmed the long term rating for the captioned Line of Credit(LOC) at [ICRA] A (pronounced ICRA A). The outlook on the long term rating has beenrevised from Positive to Stable. The rating Committee of ICRA has also reaffirmed theshort term rating for the captioned LOC at [ICRA] A1 (pronounced ICRA A one).

Related party transactions

The Company has adequate procedures to identify and monitor related party transactionsand the Company's major related party transactions are mainly with its subsidiaries. Therelated party transactions are entered into based on considerations of various businessexigencies such as synergy in operations sectoral specialization and the Company'slong-term strategy for sectoral investments optimization of market share profitabilitylegal requirements liquidity and capital resources of subsidiaries.

All related party transactions reported were entered into with the prior approval ofthe Audit Committee and are at arm's length and in the ordinary course of business. Thepolicy on related party transactions ensures that the proper reporting approval anddisclosure processes are in place for all transactions between the Company and relatedparties keeping in mind the potential or actual conflicts of interest that may arisebecause of entering into these transactions. The transactions with the related parties asper requirements of Indian Accounting Standard 24 are disclosed in Note 31.6 to thefinancial statements in the Annual Report and that they are not in conflict with theinterest of the Company at large. Further the interested directors are not present fordiscussion and voting where any related party transactions being taken up.

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Act in the prescribed Form AOC-2 is attached as ‘Annexure 2' to theBoard's Report. The details of the Related Party transaction as required under the ListingRegulations for the year ended March 31 2020 is available on the Company's website at

Management's Discussion and Analysis

The Management's Discussion and Analysis forms a part of the Board's Report. Allmatters pertaining to industry structure and developments opportunities and threatssegment-wise/team-wise performance outlook risks and concerns internal control systemsand adequacy discussion on financial and operational performance and materialdevelopments in human resources are discussed in the said Report. The Management'sDiscussion and Analysis report for the year under review and as stipulated in Regulation34 under the Listing Regulations is presented in a separate section forming part of theAnnual Report.

Business Integrity and Ethics

Integrity is one of the fundamental values of the Company. In this complex and heavilyregulated industry it is the core responsibility to do everything ethically to earn andkeep the trust of all stakeholders. The Company's deep legacy of integrity and ethicalconduct engrains into compliance with the law and with the Company's policies. Under thepillar of Business Integrity the Company communicates its Code of Business Principles("Code") internally and externally. All Company employees are required toundertake mandatory annual training on our Code and which extends through our entire valuechain including our employees contractors and third parties. The Company also requiresits third-party business partners to adhere to business principles consistent withits own. These expectations are set out in our Code of Conduct for Vendors/Suppliers whichis available at the Company's website at

Indian Accounting Standards

The financial statements have been prepared in accordance with Indian AccountingStandards (IND- AS) as per the Companies (Indian Accounting Standards) Rules 2015notified under next 133 of the Act and other relevant provisions of the Act. Significantaccounting policies have been consistently applied except where a newly issued accountingstandard is initially adopted or a revision to an existing accounting standard requires achange in the accounting policy in use.

Risk management

The Company's Risk Management framework is to identify and evaluate business risks andopportunities. This framework seeks to minimize adverse impact on the business objectivesand enhance the Company's competitive advantage. The business risk framework includedrobust and a proactive compliance program which includes monitoring risk assessmentcompliance education coaching and active encouragement of whistle blower system. TheCompany's open door and anti-retaliation policies provides tremendous encouragement andoffers a retaliation free environment to ask questions and raise concerns. The policiescompliance training and resources put in place aimed at identifying and resolvingpotential issues in timely manner and making all efforts to make compliance systematic inall our operations.

The Risk Management Committee implements and monitors the risk management plan for theCompany and reviews the key risks and its mitigation measures and provides an oversight tothe Board on Company's risk management plan. The Company has also an elaborate RiskCharter and Risk policy defining risk management governance model risk assessment andprioritisation process. The Audit Committee also provides additional oversight in the areaof financial risks and controls. The Risk Management Charter and Policy is available onthe Company's website at https://www.

Board Charter / Policies

The Company has Charters for the Audit Committee the Nomination and RemunerationCommittee the Risk Committee the Corporate Social Responsibility Committee theStakeholders Relationship Committee and also policies and codes as required which are inline with the requirements of the Act and the Listing Regulations. There are no changes oramendments made in the Board Charters/Policies during the year ended March 31 2020. Thedetails of the charter/policies/codes as adopted by the Board are provided in‘Annexure 9' to the Board's Report.

Material changes and commitments affecting financial position between the end of thefinancial year and date of the report

There are no reportable matters on the material changes and commitments affectingfinancial position between the end of the financial year and date of the report.

2. Company Overview

Tejas is a pioneering R&D-driven telecom equipment company which has successfullygrown from a startup to a publicly-listed global company. Tejas designs develops andmanufactures high-performance optical and data networking products that are used bytelecom service providers utilities government and defence networks._Tejas is currentlyrecognized as a top-10 supplier in the global optical aggregation market_(source:Ovum)_and our_products are deployed in 75+ countries._ Tejas has an extensive portfolio ofleading-edge telecom products for building end-to-end broadband networks based on latesttechnologies and global standards. Tejas products includes carrier-grade opticaltransmission (based on DWDM/PTN/OTN technologies) fiber broadband (based on GPON/NG-PON)broadband wireless (based on LTE 4G/5G) as well as multi-gigabit Ethernet/IP switching androuting products that are fully designed and made in India._Tejas products utilize a novelsoftware-defined-hardware™ architecture that enables us to deliver highlydifferentiated network solutions. Tejas is also_ one of the leading innovators in India'sICT sector with over 349 patents and_a large repository of 285+ semiconductors IPs._Today all large private telecom operators telecom PSUs and utilities in India_use Tejasproducts in their networks. Tejas is also the leading domestic supplier of optical anddata networking products for various Government of India_ projects of national importancehaving security/strategic implications such as National Fiber Optic Network (Bharatnet)defence networks and smart cities. Tejas GPON products are installed in over 70000+ GramPanchayats and 2500+ towns across India for BharatNet project. Tejas products are alsoused to deliver public WiFi services in 4000+ railway_stations in the country.

We remain committed to reduce our country-concentration on India and expand our exportsbusiness so as to achieve 50% of our revenues from international in the medium term. Wehave been focusing on 3 major regions- South and South East Asia Africa and Mid-East andNorth America. During the year we hired experienced local sales leaders for Africa (basedin Johannesburg) and for the USA (based in Dallas) and also increased our sales andmarketing investments in these regions. We won many new customers and also won newapplications from our existing customers so as to get a large wallet share of theirbusiness.


The Company has 2 subsidiaries (including a stepdown subsidiary) as on March 31 2020

• Tejas Communication Pte. Limited (wholly owned subsidiary of Tejas NetworksLimited)

• Tejas Communications (Nigeria) Limited (wholly owned subsidiary of TejasCommunication Pte. Limited and stepdown subsidiary of Tejas Networks Limited) In line withthe requirements of the Act and also in accordance with IND AS 110 and IND AS 111 asspecified in the Companies (Indian Accounting Standards) Rules 2015 the Company prepareda consolidated financial statement of itself and of its subsidiaries in the form andmanner as that of its own and also attach along with its financial statement a separatestatement containing the salient features of the financial statements of its subsidiarieswhich forms part of the annual report. Moreover a statement containing the salientfeatures of the financial statement of the Company's subsidiaries in the prescribed FormAOC-1 is attached as ‘Annexure 1' to the Board's Report which provides details of theperformance and financial position of each subsidiary. The financial statement of thesubsidiaries is available on the Company's website

Quality Initiatives

At Tejas we define quality as "fitness for use" with an end result ofdelighted customers in order to achieve this our quality journey ensures constantquality Improvement program to monitor assess and improve the quality of our products /processes. Based on quality/failure data from field deployments we continually makespecific improvements on our platforms- both on hardware as well as software to improvereliability quality and ease-of-use. One such example for pertaining to use of specifickind of storage media used on some of our platforms. By implementing these changes ourfailure rate reduced by upto 90% across multiple large deployment.

3. Human Resource Management

Several key initiatives were initiated by Human Resources (HR) during the financialyear with focus on capability development and change management.

The focus of the talent acquisition team was to attract and onboard senior talentespecially in international geographies in the Sales function. The Company made key hiresin international markets like the United States of America Mexico Africa (especiallySouth Africa) and the Middle-East. In addition strategically top-tier colleges wereapproached at the right cusp of their campus placement process - getting us key talentfrom the IITs (Indian Institutes of Technology) NITs (National Institutes of Technology)and other premier colleges like Birla Institute of Technology and Science (BITS). TheCompany revamped its training of campus and junior talent by making it more experiential.The ‘Tejas Academy' - an in house training initiative was launched to_providetraining inputs for the faster deployment of campus talent. The Company has put insignificant focus on Leadership Development by sustaining Leadership programs inpartnership with Tata Management Development Center across the year in three tranches.This initiative now covers 95%+ leaders with responsible people who have undergone arigorous program for leadership development.

The Prevention of Sexual Harassment (POSH) committee conducted a series of opensessions for all to refresh awareness and sensitization of POSH. Along with this thecommittee continued to meet on regular basis to be up-to-speed on the latest happenings inthis field.

The HR team also did a comprehensive outreach with managers and employees to understandground-level feedback. Through this process emerged empowered teams – like Tejascultural and Sports committee (Tejotsav) which conducted several fun and engaginginitiatives throughout the year – including a cultural night cricket tournament andcelebrating key festivals. In the last part of the year the HR team also acted asemergency response team during testing times. The HR team ensured productivity duringCOVID-19 lockdowns by various initiatives like enabling and implementing detailed bestpractices regarding "Work-From-Home" (WFH) helping procure movement passes forcritical employees enabling key productivity-enabling upgrades to our HR informationsystem etc.

Particulars of employees

The ratio of the remuneration of each Director and Key Managerial Personnel (KMP) tothe median of employees' remuneration and statement containing the names of top 10employees in terms of remuneration drawn as per Section 197(12) of the Act read with Rule5(1) clauses (i) to (xii) Rule 5(2) and Rule 5(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in ‘Annexure 8' whichforms part of the Board's Report.

The statement containing particulars of employees posted in India throughout the yearand in receipt of a remuneration of Rs. 1.02 crore or more per annum employees posted inIndia for part of the year and in receipt of Rs. 8.5 lakhs or more a month and employeesposted outside India and in receipt of a remuneration of Rs. 60 lakhs or more per annum orRs. 5 lakhs or more a month is available on the Company's website at

The Annual Report is being sent to Shareholders excluding the aforesaid exhibit.Shareholders interested in obtaining this information may access the same from Companywebsite or send a written request to the Company.

Employee Stock Options (ESOP) / Restricted Stock Units (RSU) The Company has thefollowing ESOP / RSU Schemes in force:

• Tejas Networks Limited Employees Stock Option Plan – 2014 ("ESOP Plan2014");

• Tejas Networks Limited Employees Stock Option Plan – 2014-A ("ESOPPlan 2014 - A");

• Tejas Networks Limited Employees Stock Option Plan – 2016 ("ESOP Plan2016");

• Tejas Restricted Stock Unit Plan 2017

The details of the ESOP / RSU Plans as required under the applicable provisions of theAct read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014 areprovided in ‘Annexure 7' which forms part of the Board's Report. Afterimplementation of the RSU plan Company did not grant any new options from the poolavailable from the current ESOP Schemes. The details of the ESOP/ RSU Plans and thedisclosure as required under Regulation 14 of the Listing Regulations is available on theCompany's website at

The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 The Company provides equal opportunities and is committed in creating a healthyworking environment that enables the employees to work with equality and without fear ofdiscrimination prejudice gender bias or any form of harassment at workplace. The Companyhas in place a Prevention of Sexual Harassment (POSH) policy in accordance with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The policy is frequently communicated at regular intervals throughassimilation programs to the employees. Further in accordance with the Sexual Harassmentof Women at Workplace (Prevention Prohibition & Redressal) Act 2013 (‘POSHAct') and Rules made thereunder the Company has constituted Internal Committees (IC) atthe Head Office which takes care of corporate office /factory situated in Bangalore andbranches situated in India. The IC has equal representation of men and women and ischaired by senior woman employee and has an external independent member who worked in thisarea and has the requisite experience in handling such matters as one of its members.

The following are some awareness programs / training imparted to the employees and ICduring the year:

• Every New Hires / Trainees / Interns / Third-party business partners are trainedon Prevention of Sexual Harassment during induction program.

• The Internal Complaints Committee is trained by an external agency when thecommittee members are on-boarded to the committee.

• The Policy of "Prevention of Sexual Harassment" at workplace isavailable on the intranet portal for the employee to access as and when required.

• Communication is sent to all employees on a regular basis on various aspects ofprevention of sexual harassment at work through e-articles and other means ofcommunication.

• The women employees are made aware and are discouraged from working beyond 8.00p.m. In circumstances where late working becomes unavoidable women employees are madeaware and are required to take a drop home from the Company approved car vendor only andbe escorted by a male colleague/ security back home.

4. Corporate Governance

The Company's corporate governance philosophy ensures transparency in all dealings andin the functioning of the management and the Board. The Company's policies seek to focuson enhancement of long-term shareholder value without compromising on integrity socialobligations and regulatory compliances. The Company operates within accepted standards ofpropriety fair play and justice and aims at creating a culture of openness inrelationships between itself and its stakeholders. The corporate governance philosophy ofthe Company has been further strengthened by its policies like Code of Conduct Preventionof Insider Trading and Code of Corporate Disclosure Policies. Further the Companyrecognizes that a Board composed of appropriately qualified members with a broad range ofexperience relevant to the business is important for effective corporate governance andsustained commercial success. The Company recognizes the benefits of

a Board that possesses a balance of skills experience expertise and diversity ofperspectives appropriate to the requirements of the business of the Company. The Companyhas three–tier structure of Corporate Governance which is as follows:

i. Governance by Shareholders – Shareholders appoint and authorize the Boardof Directors to conduct business ethically objectively and ensure accountability.

ii. Governance by the Board and its Committees – The Board leads the strategicmanagement on behalf of the stakeholders exercises supervision through direction andcontrol and appoints various committees to handle specific areas of responsibilities.

iii. Governance by Executive Management – Based on the strategies and targetsset by the Board the executive management and its committees take up specificresponsibilities and day-to-day tasks to attain those strategies and targets set by theBoard.

By integrating the above stakeholders with the workforce and strategic businessplanning and with the necessary financial and human resources in place the Companybenchmarks its Corporate Governance practices with the best in the World as well as toachieve its objectives in an ethical and transparent manner.

Board Diversity

The Company recognizes that a Board composed of appropriately qualified members with abroad range of experience relevant to the business is important for effective corporategovernance and sustained commercial success. The Company believes that it has a trulydiverse Board which leverages on the skills and knowledge industry or relatedprofessional experience age and gender which helps the Company to retain its competitiveadvantage. The Board has adopted the Board Diversity Policy to recognize the benefits of adiverse Board and to further enhance the quality of participation and performance. Thepolicy on Board diversity is available on the Company's website

Board Governance Guidelines

The Company Board's governance guidelines covers aspects relating to composition androle of the Board Chairman and its Directors Board diversity definition ofindependence term of Directors retirement age and committees of the Board. Theguidelines also cover key aspects relating to nomination appointment induction anddevelopment of Directors Directors remuneration oversight on subsidiary performancescode of conduct Board effectiveness reviews and various mandates of Board committees.

Number of meetings of the Board and Committees

The Board met five (5) times during the financial year ended March 31 2020 thedetails of which are given in the Corporate Governance Report that forms part of thisAnnual Report. The Committees of the Board also met four (4) times during the financialyear other than Nomination and Remuneration Committee which met five (5) times. Theintervening gap between any two meetings is within the period prescribed by the Act readwith Listing Regulations.

Policy on directors' appointment and remuneration

The current policy is to have an appropriate mix of Executive Non-Executive andIndependent Directors to maintain the Independence of the Board and separate its functionsof governance and management. As on March 31 2020 the Board consists of six members withOne Non-Executive and Non-Independent Director Two Executive and Whole-time Directorsand Three Non-Executive and Independent Directors. The Board periodically evaluatesthe need for change in its composition and size. The policy of the Company on directors'appointment and remuneration including criteria for determining qualifications positiveattributes independence of a director and other matters provided under sub-section (3) ofSection 178 of the Act adopted by the Board is available on the Company's website at

In line with the requirements of the Act and in view of the adverse impact of thepandemic - COVID–19 had on the operational performance of the Company and since theCompany has incurred a loss the Independent Directors have not been paid remuneration inthe form of commission for the year ended March 31 2020 other than sitting fees of Rs.100000/- for attending each Board / Committee Meeting. The Executive Directors have beenpaid remuneration in accordance with Part II of Section II of Schedule V of the Act thedetails of which are mentioned in the Corporate Governance report. Further theIndependent Directors have voluntarily decided to take a 10% reduction in their proposedremuneration (other than sitting fees) for the fiscal 2021.

Declaration by Independent Directors

The Independent Directors have submitted a declaration stating that they meet thecriteria of independence and that they are not aware of any circumstance or situationwhich exist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgment and without any externalinfluence. In this context the Company definition of ‘Independence' of Directors isbased on Regulation 25 of the Listing Regulations and Section 149(7) of the Act and rulesframed thereunder.

Board its Committee and Individual Director's Evaluation In terms of the requirementof the Act and the Listing Regulations the Company devised an annual performanceevaluation frame work which sets a mechanism for the evaluation of the Board the BoardCommittees and the Individual Directors. During the year and as mandated the Board ofDirectors has carried out an annual evaluation of its own performance the BoardCommittees and the Individual Directors based on detailed questionnaire drafted inaccordance with the Guidance Note on the Board Evaluation issued by the Securities andExchange Board of India. The performance of the Board was evaluated on the basis ofvarious criteria such as composition of the Board information flow to the Board and itsdynamism strategic issues roles and functions of the Board relationship with themanagement engagement with the Board and external stakeholders and other developmentareas. The Corporate Governance report details the process undertaken by the Board inevaluating itself its Committees and Individual Directors.

Familiarization programmes for Directors

The Non-Executive and Independent Directors as part of familiarization exercise areintroduced to the Company culture through orientation sessions. Executive Directors andSenior Management provide an overview of operations and familiarize them on mattersrelating to our values and commitments and are also provided with an information kitcontaining documents about the Company such as its annual reports annual presentationsrecent press releases research reports code of business conduct and ethics and thememorandum and articles of association etc. Periodic presentations are made at the Boardand Committee meetings on business and performance updates of the Company global businessenvironment business strategy and risks involved apart from regular presentations onCompany's business strategies and associated risks expositions are made on various topicscovering the telecom industry. Detailed presentations on the Company business segments aremade in the separate meetings of the Independent Directors from time to time. TheNon-Executive and Independent Directors meet with Board Member(s) and Senior Management onfrequent basis either on call or in person as appropriate. Visits to plant location areorganized for the Non-Executive and Independent Directors to enable them to understand andget acquainted with the operations of the Company. Further as part of our annual strategyplanning process the Company organizes a management strategy session with the Board todeliberate on various topics related to strategic alternatives progress of ongoingstrategic initiatives risks to strategy execution and the need for new strategic programsrequired to achieve the Company objectives. This serves the dual purpose of providing aplatform for Board Members to bring their expertise to the projects while also providingan opportunity for them to understand detailed aspects of execution and challenges inachieving the Company goals.

The details of the familiarization programs for Directors is available on the Company'swebsite Directors/ Senior Management /Key Managerial Personnel Inductions/ Appointments There are no inductions/ appointments inthe Board of Directors or its Committee thereof the Senior Management and Key ManagerialPersonnel of the Company for the year ended March 31 2020.


The following re-appointments were made for the year ended March 31 2020:

• The Shareholders by way of postal ballot dated January 3 2020re-appointed Balakrishnan V (DIN: 02825465) as Non-Executive Chairman and IndependentDirector for a period of five (5) years with effective from February 2 2020 till February1 2025 not liable to retire by rotation.

• The re-appointment of Dr. Gururaj Deshpande (DIN: 01979383) as a Non-Executiveand Non-Independent Director liable to retire by rotation subject to the approval of theShareholders in the ensuing 20th Annual General Meeting of the Company.

• The Shareholders in their 19th Annual General Meeting held on July25 2019 re-appointed Sanjay Nayak as Managing Director and Chief Executive Officer for afurther period of 5 years from January 1 2020 till December 31 2024 on terms andconditions including remuneration as set out in the Notice of the 19th AnnualGeneral Meeting.

Continuance of Independent Directorship

Amb. Leela K Ponappa (DIN: 07433990) Independent Director was re-appointed on February16 2018 for a period of 5 years in terms of Act and SEBI (LODR) Regulations 2015. At thetime of the appointment her age was 72 years. SEBI has amended the LODR Regulations 2015vide circular dated May 9 2018 which require re-appointment/ continuance of anyNon-Executive Director who has attained the age of 75 years to be approved by theShareholders by way of a Special Resolution. Though Amb. Leela K Ponappa can hold officeunder the erstwhile resolution till February 16 2023 she will attain the age of75 years during the term of her current appointment. She will attain the age of 75 yearson June 26 2021 and her continuance of Independent Directorship is subject to theapproval of the Shareholders in the ensuing 20th Annual General Meeting of theCompany. Resignations There are no resignations in the Board of Directors or its Committeethereof the Senior Management and Key Managerial Personnel of the Company for the yearended March 31 2020.

Other than the above there were no changes to the Directors/ Senior Management/ KeyManagement Personnel during the year ended March 31 2020.

Committees of the Board

The Company has the constituted the following committees in line with the requirementsof the Act and the Listing Regulations namely:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

The composition functions scope number of meetings held and attended by the membersetc. of each Committee are furnished in the Corporate Governance Report which forms partof this Annual Report. All the recommendations of the Committee including that of AuditCommittee were considered and approved by the Board as appropriate.

Internal Financial controls

The Company has adequate systems for Internal Audit and Corporate risk assessment andmitigation. These controls ensure transactions are authorized recorded and reportedcorrectly and assets are safeguarded and protected against loss from unauthorized use ordisposition. In addition there are operational controls and fraud risk controls coveringthe entire spectrum of internal financial controls. An extensive program and coverage planof internal audit which is approved by the Audit Committee on yearly basis and themanagement reviews and supplements the process of internal financial control framework.Documented policies guidelines and procedures are in place for effective management ofinternal financial controls. The Internal Audit covers all the factories sales officeswarehouses and centrally controlled businesses and functions as per the annual planagreed with the Audit Committee comprising entirely of Independent Members and is in linewith requirements of the Act which includes adherence to the Company's policiessafeguarding its assets prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures. Every quarter the Audit Committee reviews adequacy and effectiveness of theCompany's internal control environment and monitors the implementation of auditrecommendations including those relating to strengthening of the Company's riskassessment procedures operating controls and compliance with Corporate Policies. TheCompany based on the recommendations of the Audit Committee has appointed an independentauditor M/s. Singhvi Dev and Unni Chartered Accountants LLP as Internal Auditors of theCompany to reviews the controls across the key processes and submits reports periodicallyto the Management and significant observations are also presented to the Audit Committeefor review. The Internal Auditors for the year ended March 31 2020 have submitted asummary report to the Audit Committee confirming the completeness and effectiveness of keycontrols tested on a quarterly and annual frequency. The summary report states the keycontrols that were required to be tested were carried out and the annual requirement oftesting key controls under the Act has been concluded. The report further states that thesignificant processes were reviewed during the year and the process documentations havebeen accordingly updated where necessary.

Vigil Mechanism / Whistle Blower Mechanism

The Company promotes ethical behavior in all its business activities and has put inplace a mechanism for reporting illegal or unethical behavior. Towards this the Companyhas established a robust Vigil Mechanism and a Whistle-blower policy and also a policy onthe reporting of incidents of leak or suspected leak of Unpublished Price SensitiveInformation (UPSI)" in terms of Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015 as amended from time to time through which itsDirectors Employees and Stakeholders can report their genuine concerns about unethicalbehaviors actual or suspected fraud or violation of the Company's code of conduct orethics policy. The Company's Vigil mechanism / Whistle blower Policy aims to provide theappropriate platform and protection for Whistle blowers to report instances of any actualor suspected incidents of unethical practices violation of applicable laws andregulations including the Code of Conduct for Prevention of Insider Trading in theCompany's securities Code of Fair Practices and Disclosure. The said mechanism providesfor adequate safeguards against victimization and direct access to the Audit Committee andin appropriate and exceptional cases; directly to the Chairperson of the Audit Committee.

The Vigil Mechanism / Whistle Blower Mechanism are supervised by ‘Ethics &Compliance' team headed by the Chairman of the Audit Committee which comprises of theChief Financial Officer Chief Compliance Officer and other executives of the Company. TheVigil Mechanism and Whistle-blower policy is put up on the Company's website at

Significant or Material Orders passed by Regulators or Courts or Tribunal There are nosignificant orders that have been passed by any Regulator or Court or Tribunal which canhave impact on the going concern status and the Company's operations in future.

Share Suspense Account (Unclaimed Shares)

The Securities Exchange Board of India by its circular dated November 5 2019 issued interms of Regulation 40 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) (IV Amendment) Regulations 2018 (LODR) states that the transferof securities held in physical mode is not permitted with effect from April 1 2019.

The Company is having certain physical share certificates belonging 60 shareholders whoare former employees of the Company who have been issued / allotted 79778 equity shares(110 share certificates) in the Company consequent to the employees exercising StockOptions._These employees to whom these equity shares and share certificates belongs havesince left the Company and their whereabouts are not known though the Company has takensufficient steps to inform them based on the records available with the Company but theseemployees have not since claimed the same. In line with the above said circular theCompany opened a Demat account as Tejas Networks limited - Unclaimed Share SuspenseAccount with the ICICI Bank Limited and transferred all unclaimed shares into one physicalfolio and further dematerialised the said equity shares under a demat account. As and whenany shareholders claim the same the Company will transfer the same to his demat account byfollowing the procedure as prescribed under the regulations.

Investor Education and Protection Fund (IEPF)

The Act read with the IEPF Rules states that all the shares in respect of whichdividend has remained unclaimed or unpaid for seven consecutive years or more are requiredto be transferred to the demat Account of the IEPF Authority. The Company has declared itsmaiden dividend during the year ended March 31 2019 and hence the amount of dividendremaining unclaimed or unpaid for a period of seven years from the date of transfer hasnot arisen till date. As such the transfer of the unpaid dividend nor the shares inrespect of which the dividend were unclaimed by the respective Allottees to IEPF are notapplicable to the Company. However the Company the details of Unpaid/ Unclaimed dividendas on March 31 2020 is available on the Company's website at

Annual return

The extracts of Annual Return in Form No. MGT-9 as required under Section 134(3)(a) ofthe Act for the financial year ending March 31 2020 is annexed hereto as‘Annexure 3' and forms part of this report. A copy of the Annual Return has also beenplaced on the website of the Company at

Directors' Responsibility Statement

Pursuant to the provisions contained in Section 134(3) of the Act the Board ofDirectors to the best of their knowledge and belief and according to information andexplanations obtained from the management confirm that:

• In the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards had been followed and there are no materialdepartures;

• The Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;

• The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

• The Directors had prepared the annual accounts on a going concern basis;

• The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

• The Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively;

• The financial statements have been audited by M/s. Price Waterhouse CharteredAccountants LLP (Firm registration number No. 012754N/N500016 the Company's StatutoryAuditors;

• The Audit Committee meets periodically with the Internal Auditors and theStatutory Auditors to review the manner in which the Auditors are discharging theirresponsibilities and to discuss audit internal control and financial reporting issues;

• To ensure complete independence the Statutory Auditors and the InternalAuditors have full and free access to the Members of the Audit Committee to discuss anymatter of substance.

Cyber Security

The increased demands for Information Technology support services are occurring acrossnearly all industries. it is vital that organizations focus more on cybersecurityawareness education training and use of simulations to create a stronger human firewallto protect the vital digital assets. With the outbreak of COVID-19 the industry has seena sharp rise in cyber-attacks which focused on spear-phishing and ransomwareimpersonation attacks combined with business email compromise targeting financial systemssupply chain cyber-attacks and distributed denial of service cyber-attacks on the energyhospitality and travel industries. To ward of this threat and to reduce both theprobability of a cyber-attack or significant data breach and to mitigate thenegative financial and reputational impacts the Company has done the following:

• Created an organizational culture of cyber security which consistently promotesand supports all employees practicing effective cybersecurity policies processes andprocedures via comprehensive cyber security awareness education and training programincluding spear-phishing campaigns and cyber data breach table-top exercises.

• Implemented advanced cyber diagnostic assessments on a regular basis includingemail cyber-attack assessments network and endpoint cyber-attack assessmentsvulnerability scanning assessments penetration testing and spear-phishing campaign.

• Established a rapid cyber-attack incident response plan and periodically testedan enterprise-wide well-coordinated information system incident response plan to quicklyidentify contain eradicate and recover from cyber-attacks.

• Conducted 24 x 7 x 365 monitoring detection and response which monitoreddetected and responded to all cyber incidents including email systems network softwareapplications and all information system endpoints using advanced Security InformationEvent Management (SIEM) software data visualization tools automation and ArtificialIntelligence (AI) capabilities.

• Ensured information system resilience and implemented and periodically tested anenterprise-wide Business Continuity Plan and Disaster Recovery Plan.


The spread of COVID-19 has severely impacted businesses around the globe. In manycountries including India there has been severe disruption to regular businessoperations due to lock-downs disruptions in transportation supply chain travel bansquarantines social distancing and other emergency measures.

Combatting COVID–19

To effectively combat the unprecedented challenges brought in by COVID-19 the companyhas taken proactive and preventive measures to ensure business continuity while givingutmost priority to the health and safety of its employees partners customers and otherstakeholders. All this has been done while taking care of all applicable Governmental andstatutory guidelines as well as health and safety advisories from various authorities.Given that telecom networks are critical infrastructure the company took specificmeasures to ensure business continuity including offering continued 24x7 customer serviceand technical support keeping our manufacturing operations going for all customer ordersfor spares network expansion etc. and maintaining constant communication with ourcustomers. A letter was sent by our CEO to all our customers and stakeholdershighlighting this commitment.

The Company has also evolved effective guidelines for identifying critical personnelneeded for business continuity smooth running of manufacturing operations and meeting ourcustomer requirements. We have also enabled flexible work-from-home guidelines with anobjective of maintaining/improving employees productivity ensuring employee and publichealth and safety protecting safety and security of our confidential and proprietarycompany information while complying to all applicable laws and guidelines.

Assessment of COVID–19

The Company is in the business of providing optical and data transmission equipment totelecom service providers. Since telecom networks have been identified as an essentialservice the Company is in a position to provide continual customer and technical supportto its customers in India and worldwide so that their network uptime remains high. Withmore people working remotely and many services being accessed from home there has been asignificant increase in data traffic in telecom networks which is expected to drivedemand for higher bandwidth and more optical and data transmission equipment. Telecomoperators are expected to invest more in upgrading their network capacities especially toaddress home broadband needs. The Company's products address the broadband equipmentrequirements of telecom operators and also are used for augmenting the data capacity oftheir networks. The net impact of COVID–19 on our business is positive in the mediumand long term with Optical and xPON (for FTTX) spending is expected to be strong due toincrease in residential bandwidth demand Significant bandwidth upgrades expected inaccess and backbone networks Fiberization will continue to increase. Telcos will continueto invest in their existing 4G networks with some delays in 5G rollouts. Howeveruncertainty caused by the current situation has resulted in delays in confirmation ofcustomer orders and in executing the orders in hand and an increase in lead times insourcing components. This situation is likely to continue for the next two quarters basedon current assessment. The Company has made detailed assessment of its liquidity positionfor the next one year and of the recoverability and carrying values of its assetscomprising Property Plant and Equipment Intangible assets Trade receivables Inventoryand Investments as at the balance sheet date. The Company believes that it has taken intoaccount all the possible impact of known events arising from COVID–19 pandemic.However the impact assessment of COVID–19 is a continuing process given theuncertainties associated with its nature and duration. The Company will continue tomonitor any material changes to future economic conditions.

Register of Members

For the purpose of 20th Annual General Meeting and for the financial yearended March 31 2020 the Register of Shareholders and Share Transfer Books of the Companywill remain closed from July 21 2020 to July 28 2020 (both days inclusive).

Convening of the General Meeting through Video-conferencing In view of COVID-19 andrestrictions on movement of persons at several places in the country the Ministry ofCorporate Affairs Government of India vide its General Circular No. 14/ 2020 dated April8 2020 and General Circular No. 17/2020 dated April 13 2020 and General CircularNo. 20/2020 dated May 5 2020 has allowed the Companies to conduct the AGM throughVideo-Conferencing (VC) or Other Audio Visual Means (OAVM) for the Financial year 2019-20.

In line with above Circulars the Company is convening this 20th AGM byVC/OAVM and the procedure and the manner of participating in the VC/OAVM by the Membersare stated in the Notice of the 20th AGM.

5. Auditors

Auditors a. Statutory Auditors

M/s. Price Waterhouse Chartered Accountants LLP (Firm registration number No.012754N/N500016) were appointed by the Shareholders in their 17th AnnualGeneral Meeting held on September 27 2017 as the Statutory Auditors of the Company for aperiod of five consecutive years from the conclusion of the 17th Annual GeneralMeeting of the Company till the conclusion of the 22nd Annual General Meetingsubject to ratification of the said appointment at every annual general meeting. Howeverthe Ministry of Corporate Affairs (MCA) vide its notification dated May 7 2018 hasomitted the requirement of ratification of appointment of statutory auditors byshareholders at every subsequent Annual General Meeting. Consequently M/s. PriceWaterhouse Chartered Accountants LLP (Firm registration number No. 012754N/ N500016)continues to be the Statutory Auditors of the Company. M/s. Price Waterhouse CharteredAccountants LLP has furnished a certificate of their eligibility and consent for theircontinuance as the Statutory Auditors of the Company for the FY 2020-21 and also in termsof the Listing Regulations the Statutory Auditors have confirmed that they hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia. The remuneration in the form of fees paid for the year ended March 31 2020to M/s. Price Waterhouse Chartered Accountants LLP (Firm registration number No.012754N/N500016) as the statutory auditors of the Company are as follows.

in Rs. crore

Engagement Charged during the year
Statutory audit including limited reviews 0.48
Other audit related services 0.18
Total 0.66

Note: The above fees exclude GST and out of pocket expenses and do not include anyelement of contingent fees.

b. Internal Auditors

The Board based on the recommendations of the Audit Committee has appointed anIndependent auditor M/s. Singhvi Dev and Unni Chartered Accountants LLP as InternalAuditors of the Company for the fiscal 2021 to carry out the internal audit functions. Theremuneration in the form of fees paid for the year ended March 31 2020 to M/s.Singhvi Dev and Unni Chartered Accountants LLP as Internal Auditors of the Company areas follows.

in Rs. crore

Engagement Charged during the year
Audit fees 0.25
Total 0.25

Note: The above fees exclude GST and out of pocket expenses.

c. Secretarial Auditor

The Board based on the recommendations of the Audit Committee has appointed DwarakanathC Company Secretary in Practice (FCS No. 7723 and Certificate of Practice No. 4847) asthe Secretarial Auditor of the Company to conduct Secretarial Audit for fiscal 2021. TheSecretarial Auditor's Report for the year ended March 31 2020 is enclosed as‘Annexure 5' to the Board's Report. The remuneration in the form of fees paid for theyear ended March 31 2020 to Dwarakanath C Company Secretary in Practice as theSecretarial Auditor of the Company are as follows.

in Rs. crore

Engagement Charged during the year
Audit fees 0.04
Other audit related services 0.02
Total 0.06
Note: The above fees exclude GST.

d. Cost Auditors

The rules governing maintenance of cost accounting records and cost audit as perSection 148 of the Act and also in line with the Central Government issued_Companies (CostRecords and Audit) Rules 2014 and subsequently various amendments are carried out in theabove rules are not applicable to the Company. Hence the Company has not appointed theCost Auditor for the year ended March 31 2020.

Key Audit Matter

M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.012754N/N500016)Statutory Auditors of the Company audited the Financial Statements prepared under theIND- AS. The Independent Statutory Auditor renders an opinion regarding the fairpresentation in the financial statements of the Company's financial condition andoperating results. Their audits are conducted in accordance with generally acceptedauditing standards and include a review of the internal controls to the extent necessaryto determine the audit procedures required to support their opinion. M/s. Price WaterhouseChartered Accountants LLP Statutory Auditors of the Company has issued an Audit Reportwith unmodified opinion on the Audited Financial Results of the Company (Standalone andConsolidated) for the year ended March 31 2020. The said report forms part of this AnnualReport.

The Key Audit Matter are those matters which in the opinion of M/s. Price WaterhouseChartered Accountants LLP Statutory Auditors of the Company were of most significance inthe Audit of the Standalone / Consolidated IND AS financial statements for the year endedMarch 31 2020 and these matters were addressed in the context of the audit of theStandalone / Consolidated IND AS financial statements for the year ended March 31 2020 asa whole. The Key Audit Matter forms part of the Audit report of Standalone / ConsolidatedIND AS financial statements.

6. Corporate Social Responsibility

The Company has adopted Corporate Social Responsibility Policy (‘CSR') initiativesso as to attain the sustained economic performance environmental and social stewardshipand strive for economic development that positively impacts the society at large. TheCompany works towards removing malnutrition improving healthcare infrastructuresupporting primary education rehabilitating abandoned women and children and preservingIndian art and culture. The Company's focus has always been to contribute to thesustainable development of the society and environment and to make our planet a betterplace for future generations.

In pursuance of the CSR Policy and in line with the requirement of the Act The Companyspent Rs. 1.97 crore being 2% of the average net profits of the Company for the precedingthree years. The Company supports projects mainly that promote education energy healthnational disaster etc. and therefore contributed to recognized Non-Profit Organization asbelow.

The CSR policy and initiatives taken by the Company on Corporate Social Responsibilityduring the year is available on the Company's website at The Annual Report on the CSR activitiesin the format prescribed under Rule 8 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is given in ‘Annexure 6' to the Board's Report. The saidinitiative is over and above the statutory requirement.

7.Conservation of energy research and development technology absorption foreignexchange earnings and outgo

The particulars relating to conservation of energy technology absorption research anddevelopment foreign exchange earnings and outgo as required to be disclosed under Section134 (3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules 2014 is givenin ‘Annexure 4' to the Board's Report.

8. Business Responsibility Report (BRR)

Business Responsibility Report as stipulated under Regulation 34(2) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 describing the initiativestaken by the Company from an environmental social and governance perspective forms partof this Report and annexed herewith. The BRR is available on the Company's website at disclosures.php.

9. Green initiatives

Electronic copies of the Annual report for the year 2020 and the Notice of the 20thAnnual General Meeting are sent to all shareholders whose email addresses are registeredwith the Company/ depository participant (s). For Members who have not registered theiremail addresses physical copies are sent in the permitted mode. To support the"Green Initiative" Members who have not registered their email addresses arerequested to register the same with their DPs in case the shares are held by them inelectronics form and with RTA in case the shares are held by them in physical form.

10. Cautionary Note

Certain statements in this report concerning our future growth prospects areforward-looking statements which involve a number of risks and uncertainties that couldcause actual results to differ materially from those in such forward-looking statementsdue to risks or uncertainties associated with our expectations with respect to but notlimited to our ability to successfully implement our strategy and our growth andexpansion plans technological changes our exposure to market risks general economic andpolitical conditions in India which have an impact on our business activities orinvestments changes in the laws and regulations that apply to the industry in which theCompany operates. The Company does not undertake to update any forward-looking statementsthat may be made from time to time by or on behalf of the Company._

11. Acknowledgement

We thank our customers vendors investors bankers financial institution employeesand all other stakeholders for their continued support during the year. We place on recordour appreciation of the contribution made by our employees at all levels. Our consistentgrowth was made possible by their hard work solidarity cooperation and support.

We also thank the government of various countries where we operate. We thank theGovernment of India particularly the Ministry of Labour and employment the Ministry ofCommunications the Ministry of Electronics and Information Technology the Ministry ofCommerce and Industry the Ministry of Finance the Ministry of Corporate Affairs theCentral Board of Direct Taxes the Central Board of Indirect Taxes and Customs theReserve Bank of India (RBI) the Securities Exchange Board of India (SEBI) the variousdepartments under the state government and union territories and other government agenciesfor their support and look forward to their continued support in the future.


(Pursuant to First proviso to sub-section (3) of section 129 of the Companies Act 2013read with Rule 5 of the Companies (Accounts) Rules 2014) Statement containing salientfeatures of the financial statement of subsidiaries / associate companies / joint ventures

Part "A": Subsidiaries

(in Rs. crore except % of shareholding)

Name of the Subsidiary Financial period ended April 01 Reporting currency Share Capital Reserves & Surplus

Total Assets

Total Liabilities Investments Turnover Profit / (loss ) before Taxation Provision for Taxation Profit / (loss) after Taxation Proposed Dividend % of share holding
Tejas Communication Pte Ltd. Singapore 2019 to March 31 2020 USD 15.56 0.13 18.99 3.55 0.25 10.68 0.27 - 0.27 - 100%


1. The annual accounts of the Subsidiary Companies and the related detailed informationis made available on the website at

2. Details of reporting currency and the rate used in the preparation of consolidatedfinancial statements.

For Conversion
Reporting Currency Reference Currency Average Rate Closing Rate
(in Rs. ) (in Rs. )
Tejas Communication Pte Ltd. USD 71.05 75.67

3. Names of subsidiaries which are yet to commence operations: Tejas Communications(Nigeria) Limited (a subsidiary of Tejas Communication Pte Ltd) is yet to commence itsoperations.

4. Names of subsidiaries which have been liquidated or sold during the year:


(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by theCompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arm's length transaction under third provisothereto.

1. Details of contracts or arrangements or transactions not at arm's length basis

There were no contracts or arrangements or transactions entered into during the yearended March 31 2020 which were not at arm's length basis.

2. Details of material contracts or arrangements or transactions at arm's lengthbasis

The details of material contracts or arrangements or transactions at arm's length basisfor the year ended March 31 2020 are as follows:

(in Rs. crore)

Name of related party Nature of relationship Nature of contracts /arrangements /transactions Duration of the contracts /arrangements /transactions Salient terms1 Amount
Sale of Goods Ongoing Based on transfer pricing guidelines 5.20
Tejas Communication Pte. Limited Wholly-owned subsidiary Rendering of Services Ongoing Based on transfer pricing guidelines 1.04
Clonect Solutions Private Limited Entity where a Reimbursement of expenses Ongoing Based on transfer pricing guidelines 8.97
Darwinbox Digital Solutions Private Limited Director is interested Entity where a Professional charges Ongoing Service Agreement 0.08
Director is interested Professional charges Ongoing Service Agreement 0.07
Deshpande Foundation Entity where a Director is interested CSR One time Based on CSR policy 0.26
Akshaya Patra Foundation Entity where a Director is interested CSR One time Based on CSR policy 0.40
ICT Academy Entity where a Director is interested CSR One time Based on CSR policy 0.50

 1Appropriate approvals have been taken for related party transactions