To
The Members
The Board of Directors hereby submits the Thirty Fourth Annual Report of the Company
with Audited Financial Statements for the period from 1st April 2021 to 31st March 2022
along with the Auditors Report.
FINANCIAL HIGHLIGHTS
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 made
during the previous year.
Review of Operations
During the year under review, the companys other income was Rs.2.15 lakhs. Due to
non-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 several
years. The plant is still non-operational but your management is trying hard to revive the
company.
During the year, management has explored the possibility of various ways to monetize
the company based on the detailed project report (DPR) submitted by the renowned
Consultant. With your support the company 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.Companies
Profiled in the global fiber optics market. The global fiber optic cable market
(henceforth, referred to as the market studied) was valued at USD 9,236.5 million in 2020,
and it is expected to reach USD 20,832.6 million by 2026, registering a CAGR of 14.5%
during the period, 2021-2026 (henceforth, referred to as the forecast period). Increasing
demand in FTTX and telecommunications industry and technological advancements are
primarily responsible for the increased growth of the market.
The optical fibers are getting smaller and smaller to the deployment challenges being
raised by end-use applications. As telecom operators started looking for high fiber count
cables in reduced diameters, optical fiber, and cable manufacturers are investing in
research and development to realize smaller fibers and cables. These cables will be
deployed for FTTx and 5G networks. Moreover, in the past few years, cloud and content
providers attempted to attract more users and offer reliable bandwidth-intensive services,
thus, increasing the popularity of submarine infrastructure. The lifetime for submarine
cable is expected to be about 25 years.
Optical fiber cable (OFC) is a significant building block in the telecommunication
infrastructure. Over the last decade, fiber optics are catering to aggressive bandwidth
demands, especially telecommunication companies, and have become the preferred
transmission medium.
The explosion of data traffic from various sources, such as the internet, e-commerce,
computer networks, and multimedia (voice, data, and video), has led to the need for a
transmission medium capable of handling higher bandwidth for handling such vast amounts of
information. Fiber optic cables, with comparatively infinite bandwidth, have proven to be
the solution.
Optical fiber is seen as an ideal solution for reliable, and secure connections among
IoT devices. The emergence of IoT and cloud computing has led to higher bandwidth and
better connectivity in workplaces and commercial office buildings, which in turn, will
spur opportunities for the market. The rising implementation of fiber optic for monitoring
of asset locations, temperature, and oil reserve levels in industries will further enhance
the growth of the market in the forthcoming years. The rising proclivity to improve data
traction, security parameters, and product automation will promote the growth of the
market during the forecast period. Furthermore, the integration of cloud computing and
fiber connectivity for constant streamline workflow will foster the growth of the market.
Similarly, the adoption of cloud computing by many companies for customer relationship
management (CRM) tools will simultaneously offer impetus to market. The rising cognizance
of fiber optic including higher bandwidth speed capabilities, superior performance, and
enhanced security will bode well for the market in the forthcoming years.
Rising Demand for Higher Bandwidth to Aid Expansion in North Asia. The rising adoption
of fiber optical systems in an electric power grid, pipelines, highways, railways,
airports, data centers will enhance the market potential in the forthcoming years. North
Asia is predicted to witness a substantial growth rate during the forecast period owing to
the rising need for higher bandwidth in communication and data services. Company is
expected to rise tremendously during the forecast period owing to the rising demand for
fiber optics in the region.
Cautionary Statement
Statements in the Boards Report contain forward looking statements. Actual results,
performances or achievements may vary materially from those expressed or implied,
depending upon economic conditions, Government policies, subsequent developments and other
incidental factors.
Risk & Concern
The industry is facing challenging cost pressures as the cost of major raw materials
are going up due to shortage & increase in oil prices. The variations in exchange rate
fluctuation are also a threat towards cost of production. The competition within OFC
business is becoming fierce due to emerging new technologies and frequent new product
introductions in Optical fiber products which command competitive prices and preference in
the market. The market price of cables is also varying due to competition.
Directors
In accordance with Sec.152 (6) and (7) of the Companies Act, 2013, read with Articles
79 & 80 of the Articles of Association of the company, Shri J Ramesh Kannan (DIN
09292181) and
Shri. R. Karthikeyan, (DIN 00824621), will retire from the directorship of the company
by rotation and being eligible, offer themselves for re-appointment.
Directors’ Responsibility Statement
As required under Section 134(5) of the Companies Act, 2013, the Directors of the
Company hereby state and confirm that -
a) In the preparation of the annual accounts the applicable accounting standards had
been followed.
b) They have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as at 31st March 2022, and the loss of the Company
for the year ended on that date.
c) They have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities.
d) They have prepared the annual accounts on a going concern basis considering the
comparative growth in OFC market, future prospects of the Company with the support of
TCIL.
e) They have laid down internal financial control to be followed by the company and
that such internal financial control is adequate and was operating effectively.
f) They have devised proper system to ensure compliance with all provision of all
applicable laws and that systems were adequate and operating effectively.
Extracts of the Annual Return
Pursuant to the amendments to Section 134(3)(a) and Section 92(3) of the Act, 2013 and
read with Rule 12 (1)of the Companies (Management and Administration) Rules, 2014, the
Annual Return (Form MGT-7) for the financial year ended March 31,2021, is available on the
Companys website and can be accessed at https://ttlofc.in/AnnualReturn.html. The extract
of the Annual Return in Form MGT-9 has been attached.
Corporate Governance
A report on Corporate Governance with the Practicing Company Secretaries Certificate on
compliance with conditions of the Corporate Governance has been attached as to form part
of the Report.
Clarification on Practicing Company Secretaries observations is given below:
1. Due to non-appointment of Independent Directors, the Company has not complied with
Regulations 17(1) (b), 18 (1), 19(1) and 25 (3) of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in terms of
minimum number of Independent Directors in the Board, Constitution of Audit Committee and
conducting a separate meeting of Independent Directors respectively.
Company’s reply:
Points No (1): The Company is Joint sector Govt. Company with 49% of its shares
held by TCIL, a Govt. of India Enterprise and 14.63% held by TIDCO, a Govt of Tamilnadu
Enterprise. Being a Govt. Company, action has already been taken for induction of
Independent Directors Constitution of Audit Committee as per 18 (1) and Constitution of
Nomination and Remuneration Committee as per regulation 19(1) of SEBI LODR and
separate Independent Directors Meeting as per 25 (3) of SEBI LODR shall be conducted after
appointment of required number of Independent Directors by the Ministry of
Telecommunications.
Energy, Technology and Foreign Exchange
Particulars relating to conservation of energy, technology absorption and foreign
exchange earnings and outgo as required under Sec.134 (3)(m) of the Companies Act, 2013
are enclosed as part of the Report.
Details of director or Key Managerial Personnel who were appointed or have resigned
during the year.
(i) Mrs.R. Lilly, I.A.S. was appointed as Nominee Director on 25.08.2022 during the
year.
(ii) Shri R. Karthikeyan was appointed as Nominee Director on 25.08.2022 during the
year.
(iii) Shri. Sanjay Bharti Kumar was appointed as Managing Director on 27.05.2021 in
place 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 25.08.2021
in 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 was
recorded in the meeting held on 27.05.2021 during the year.
(vi) Shri Kamendra Kumar, Director and Chairman superannuated on 31.03.2022. His
cessation was recorded in the meeting held on 20.05.2022.
(vii) Shri J. Ramesh Kannan, Chief Financial Officer (CFO) and Ms. Swapnil Gupta,
Company Secretary and Compliance Officer of the Company, continued to hold their posts
throughout the year under review. Their position remains same during the year.
Personnel
The Managing Director, CFO and Company Secretary were on deputation from the Promoter
Company TCIL which is a Govt. of India Enterprise, holding 49% stake in the Company. Hence
their remuneration was as per the scales applicable to their cadre in the promoter
company.
The number of permanent employees as on 31.03.2022 was 64 excluding three officials on
deputation from the promoter company.
None of the employees drew remuneration of Rs.60,00,000/- or more per annum /
Rs.5,00,000/- or more per month during the year. This information is furnished as required
under Rule 5(2)(i) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014.
Human Resources
Your company is glad to announce that the industrial relations continue to be very
cordial. During the year, employees were given training on lying of Optical cable, OFC
splicing, OFC construction work etc. TTL has been encouraging its employees to come out
with innovative suggestions, which will pave way for significant cost savings as well as
overall development of the company.
During the year 2018-19, M/s. Telecommunications Consultants India Limited decided to
help TTL employees by taking them on deputation to work in their various projects in India
which helps the employees to acquire new skill and experience in services of communication
industry. All employees joined in TCIL on deputation except 7 employees.
Quality Management Systems
It is reported that as a commitment in meeting global quality standards, your company
already has IS/ISO 9001:2015 quality management systems certification from Bureau of
Indian Standards should continue. The license will be renewed after commencement of
production.
Internal Control System
TTL has adequate internal control procedures in respect of all its operations. It has
laid down internal control procedures to ensure that all assets are safeguarded and
protected against loss from unauthorized use or disposition and transactions are
authorized, recorded and reported correctly. Internal Audit is being carried out by
Independent Audit Firm of Chartered Accountants on an ongoing basis and it recommends
appropriate improvements apart from ensuring adherence in company policies as well as
regulatory compliance. The Audit Committee periodically reviews the audit findings.
Transfer to reserves
During the year under review no amount is being transferred to General Reserve Account.
Dividend
In a view of the losses your Directors have not declared any dividend during the year
under review.
Deposits
During the year under section 73 and the rules may be called the Companies (Acceptance
of Deposits) Rules, 2014, the Company has neither accepted nor renewed any deposits from
public during the year under review.
Corporate Social Responsibility
Since the Company is continuously incurring losses, no CSR policy has been devised.
Related Party Transactions
There was no contract or arrangements made with related parties as defined under
section 188 (1) of the Companies Act, 2013 during the year under review.
Research & Development (R&D)
The information as required under the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 with respect to R&D are not applicable to
your Company.
Particulars of Loans, guarantees or investments made under section 186 of the Companies
Act, 2013.
There were no loans, guarantees or investments made by the company exceeding the limits
specified under Section 186 of the Companies Act, 2013 during the year under review and
hence, the said provision is not applicable.
Unsecured Loan
The unsecured loan amounting to Rs.138.45 crores as on 30.06.2022 is from related party
i.e. holding company, has been taken on long term basis without any stipulation for
repayment and other terms.
Information under section 197 of the Companies Act, 2013 read with rule 5(2) of the
companies (appointment and remuneration of managerial personnel) rules, 2014 regarding
employee’s remuneration.
Information as per Section 197 of the Companies Act 2013, read with Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not
applicable to your company as there is no employee on the rolls of the Company.
Accordingly there was no employee of the Company who received remuneration in excess of
the limits prescribed under of the Companies Act.
Statement under section 134(3)(p) of the Companies Act, 2013, regarding formal annual
evaluation made by board of its performance and that of its committees and individual
directors.
In terms of the notification dated 05.06.2015 issued by Ministry of Corporate Affairs,
the company has been exempted from the above provision and hence the disclosure is no
longer required.
Material changes and commitments, if any, affecting the financial position of the
company which have occurred between the end of the financial year to which the financial
statements relates and the date of the report.
None
Information under section 134(3)(n) of the Companies Act, 2013 concerning development
and implementation of risk management policy.
The companys operations are completely stopped, only limited assistance being given by
the holding company, which has a well-defined risk management policy. Your company has not
developed and/or implemented the Risk management policy on its own.
Details of application made or proceeding pending under Insolvency and Bankruptcy Code
2016.
During the year under review, there were no applications made or proceedings pending in
the name of the company under the insolvency Bankruptcy Code, 2016.
Details of difference between valuation amount on one time settlement and valuation
while availing loan from banks and financial Institutions.
During the year under review, there has been no one time settlement of Loans taken from
Bank.
Information under Regulation 24A of SEBI Circular CIR/CFD/ CMD1/27/2019 Dt 8/02/2019
from the Practicing Company Secretary.
Pursuant to Regulation 24A of SEBI Circular CIR/CFD/ CMD1/27/2019 Dt 08.02.2019 every
Listed Company and every public company shall additionally, on an annual basis, require a
check 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 the
listed entity in the manner specified in this circular. Annual secretarial compliance
report, applicable to listed entities, with effect from the financial year ended March
31,2019 onwards.
Every year a report is obtained from Practicing Company Secretary (PCS) and Submitted
to the Board. The Annual Secretarial Compliance Report for the Financial Year ended
31.03.2021 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 for
directors and employees to report concerns about unethical behaviour, actual or suspected
fraud or violation of your Companys Code of Conduct. Adequate safeguards are provided
against victimization to those who avail of the mechanism will be provided soon.
Auditors
In terms of Section 139 of the Companies Act, 2013, the Comptroller and Auditor General
of India (CAG) had appointed Chartered Accountants as the Auditors of the company for the
year 2022-23 at a remuneration of Rs.1,00,000/- besides reimbursement of traveling and
out-of-pocket expenses at actual, subject to the other items and conditions as specified
by the CAG.
Independent Auditor’s Report
Clarification on Auditors observations is given below:
Basis for Adverse Opinion
1. The Companys financial statements have been prepared using the going concern
assumption of accounting. However, the Companys accumulated losses of Rs.1,82,81,21,320/-
(including a loss of Rs.10,49,54,686/- incurred during the FY 2021-22) has eroded the Net
Worth of the Company, indicating the existence of material uncertainty that may cast a
doubt about the Companys ability to continue as a Going Concern. The Company has not
operated its factory since 2017 and NO sales effected for more than three years. It is
also pertinent to note that power connections in the factory are disabled. Further, as
represented by the company, the machineries would involve major overhauling cost to resume
operations and the company is also unable to obtain support for supply of major raw
material required for manufacture from its supplier. Also, the company has not bagged any
new orders to substantiate the going concern assumption.
/4s per Standard on Auditing (SA) 570, "If the financial statements have been
prepared using the going concern basis of accounting but, in the auditor’s judgment,
management’s use of the going concern basis of accounting in the financial statements
is inappropriate, the requirement in paragraph 21 for the auditor to express an adverse
opinion applies regardless of whether or not the financial statements include disclosure
of the inappropriateness of management’s use of the going concern basis of
accounting."
Hence, considering the cumulative effect of the factors detailed in the above paragraph
in the revival of the company, we conclude that the Going Concern assumption of the
management in preparation of financial statements is inappropriate.
2. The Company has not recognized the following financial liability/asset at Fair Value
in terms of IndAS 109 (including comparative figures as of 31st March 2021) and impact of
the same on the financial Statements is not ascertainable.
i) Amounts due to M/s Fujikura Limited amounting to Rs. 2,00,30,600/- (Previous Year-
Rs. 1,98,07,090/-)
ii) Trade Receivables (considered good) amounting to Rs. 7,06,65,510/- (Previous Year-
Rs. 7,13,62,110/-)
iii) Unsecured Trade Payables amounting to
Rs. 3,37,04,875/- (Previous Year -
Rs. 3,41,14,712/-).
Emphasis of Matter
1) We draw attention to Note No.28 (Sl.No.22) of the explanatory notes to the financial
statements which states the reason for non-recognition of amounts due to the holding
Company viz., Telecommunications
Consultants India Limited amounting to Rs.1,35,81,29,112/- (Previous Year -
Rs.1,26,18,87,189/-) at Fair Value in accordance with
IndAS 109 and impact of the same on the financial statements is not ascertainable and
Our opinion is not modified in respect of this matter.
2) Attention is invited to Note Nos. 3,5,8,14,15 of the notes to financial statements,
where the balances carried in the debtors, creditors, advances & deposits payable /
recoverable are subject to confirmation from all parties (other than Telecommunications
Consultants India Limited) as stated in Note No.28 (Sl. No. 2). The impact if any, on
financial 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 the
financial statements which states that the Company has not received information from
vendors regarding their status under the Micro, Small and Medium Enterprises Development
Act, 2006. Hence the disclosure relating to amounts unpaid as at the year end together
with interest paid / payable under this Act could not be ascertained. Our opinion is not
modified 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 on
nomination basis as both TCIL and Tamilnadu state government have huge orders to implement
the Bhartnet projects. Efforts are being made to obtain Preferential orders from Tamil
Nadu Fibrenet Corporation (TANFINET), State PSU, for supplying Optical Fiber Cable in
Tamilnadu. The DOT discussed in the meeting held on 07.03.2019 with regard to takeover of
TTL by BSNL, it is suggested by Ministry to BSNL to utilise the capacity of TTL since BSNL
requirement is 100000 km per annum against TTL capacity of 10000 km per annum. Therefore,
the order booking position is expected to be good in the near future. Renowned real estate
consultant has been appointed to monetization of vacant land. Considering the likely order
in the near future and with the promoters financial support, the accounts have been
prepared on Going Concern Basis.
As mentioned in our financials, TTL is regularly borrowing from our holding company
TCIL for its raw material support and working capital support for running day to day
operations. The balances of current liabilities and trade payable pertaining to related
party /our holding company TCIL as on 31/03/2022 are given below:
(i) Current liabilities - short term borrowing
| (a) Bridge Loan |
Rs.11,65,73,000/- |
| (b) Working capital support loan |
Rs.18,71,41,687/- |
| (ii) Trade payable - Sundry creditors for raw material support |
Rs.58,88,86,577/- |
| (iii) Other current liabilities - interest accrued |
Rs.46,55,27,849/- |
Amounts due to Fujikura Limited amounting to Rs.2,00,30,600/-
Trade Receivables (considered good) amounting to Rs.7,06,65,510/-
Unsecured Trade Payables amounting to Rs.3,37,04,875/-
This is to state that the above items are reviewed and monitored on day to day basis in
both TTL and TCIL. The balances are periodically reconciled with TCIL and also approved by
board of directors of TTL.
It may not be out of place to mention that all the realizations from TTL clients are
routed through Escrow account which is auto credited to TCILs Account for which standing
instructions have been given to bank. Moreover, charge has been created in favour of TCIL
against fixed assets and current assets of TTL for all the TCIL loans, advances and
liabilities towards raw material supply. The loans are repayable on demand basis.
Ind AS 109 requires all financial assets/liabilities to be recognised initially at fair
value and subsequently at amortised cost it satisfies the criteria with reference to Ind
As 32 Para 11 and para 4.2.1 of Ind As 109. Since these financial assets/ liabilities are
current in nature, there is immaterial finance cost/ income involved, therefore, as a
general practice, demand deposits are carried at cost and not at fair value/amortised
cost.
In view of the commitment to pay to TCIL, the holding company/ related party on demand
basis, and the company is taking a conservative approach, management assume book value of
current liabilities at a amortized cost i.e instead to book profit by discounting
liabilities the company prefers to go and disclose liabilities with full amount under law
of prudence.
Companys Reply to Para 2 of Emphasis of Matter regarding balances carried in the
debtors, creditors, advances & deposits payable/recoverable are subject to
confirmation from all parties (other than Telecommunications Consultants India Limited)
Wherever possible the Company is getting confirmation. Since TTL does not have fund to
pay to the Creditor including M/s. Fujikura, the company does not ask for balance
confirmation from any Creditors which will trigger to make payment.
Companys Reply to Para 3 of Emphasis of Matter regarding Company has not received
information from vendors regarding their status under the Micro, Small and Medium
Enterprises Development Act, 2006.
As stated in Notes to Accounts No.19, the Company has not received information from the
vendors regarding their status under the Micro, Small and Medium Enterprises Development
Act, 2006.
Cost Auditors:
As per the provisions of the Companies (Cost Records and Audit) Rules, 2014, the
operation of the company is not falling
within the scope of cost audit. Hence cost auditor was not appointed for the financial
year 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 with
Section 149(4), 177(1), 178(1) and Schedule IV of the Companies Act, 2013 as well as with
Regulations 17(1) (b), 18 (1), 19(1) and 25 (3) of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in terms of
minimum number of Independent Directors in the Board, Constitution of Audit Committee,
Nomination and Remuneration Committee and conducting a separate meeting of Independent
Directors respectively.
Management reply to the observation:
Point No (i) The Company is Joint sector Govt. Company with 49% of its shares held
by TCIL, a Govt. of India Enterprise and 14.63% held by TIDCO, a Govt of Tamilnadu
Enterprise. Being a Govt. Company, action has already been taken for induction of
Independent Directors Constitution of Audit Committee as per 18 (1) and Constitution of
Nomination and Remuneration Committee as per regulation 19(1) of SEBI LODR and separate
Independent Directors Meeting as per 25 (3) of SEBI LODR shall be conducted after
appointment of required number of Independent Directors by the Ministry of
Telecommunications.
Acknowledgements
The Directors wish to place on record their sincere appreciation for the encouragement,
assistance, support and co-operation given by Government of India, Government of Tamilnadu
and the Promoters. The Directors appreciate your whole hearted efforts during the year and
solicit your continued support and co-operation. Your Directors acknowledge the continued
trust 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) |
+91-9892691696
