ADC India Communications Ltd Directors Report.

To the Members,

The Board of Directors have pleasure in presenting the 32nd Annual Report on the business and operations of your Company, along with the audited financial statements for the financial year ended March 31, 2020.

Financial Results

Key highlights of the financial results of your Company prepared as per the Indian Accounting Standards ("Ind AS") for the financial year ended March 31, 2020 are provided below:

(Rs. in lakhs)

Particulars Year ended 31st March 2020 Year ended 31st March 2019
Revenue from operations 7812.99 8562.21
Other Income 139.08 305.76
Total Revenue 7952.07 8867.97
Profit before depreciation and Tax 618.75 900.40
Depreciation 97.33 32.58
Profit before Tax 521.42 867.82
Tax Expense 141.69 281.49
Profit after Tax 379.73 586.33
Other Comprehensive Income (7.28) 3.24
Total Comprehensive Income 372.45 589.57

FINANCIAL PERFORMANCE

With the announcement of countrywide Lockdown by Government from March 24, 2020 to contain the spread of Covid-19 the office & factory remained closed from March 24, 2020 until March 31, 2020.

Consequently, the revenue and profits of the fourth quarter of the financial year 2019-20 was impacted. In the financial year 2019-20 the overall revenue from operations declined by 8.75% over that of previous year. Revenue from the Telecommunication business declined by 34% and the revenue from IT-Networking (Enterprise network) business declined by 5% over that of previous year. Profit before tax for the year declined by 40% over that of previous year mainly on account of decreased turnover and reduction in interest and rental income.

DIVIDEND

Your Directors have recommended a dividend of Rs. 2.00 per equity share, of the face value of Rs. 10/- each, to be appropriated from the profits of the financial year ended March 31, 2020, subject to the approval by the Members at the ensuing Annual General Meeting.

TRANSFER TO RESERVES

The Company has not transferred any amount to the Reserves for the financial year ended March 31, 2020.

SHARE CAPITAL

The Companys paid up Share Capital continues to stand at Rs. 460 lakhs as on March 31, 2020 and there has been no change in the capital structure of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loan or guarantees or made investments covered under the provisions of section 186 of the Companies Act, 2013 during the year ended March 31, 2020.

SUBSIDIARY / ASSOCIATES / JOINT VENTURE COMPANIES

The Company does not have any Subsidiary/ Associate/Joint Venture Company.

BUSINESS AND OPERATIONS

As we emerge from the Covid-19 pandemic health emergency, with this "new normal" your company was fully prepared towards return to work with primary focus on the health & safety of employees first. This will be a new normal and difficult challenge, which would be resolvable in the near term. In many ways trickier, your company is constantly determining what the mid to long term implications of the crisis are and how your company should respond strategically. Regardless of the shape of recovery & time, your company firmly believe that we will emerge from the crisis stronger than before by realigning cost structure and sharpen overall productivity. Your company Board and Risk Management Committee has always looked at worst case scenario of times like these & built a portion of the strong financials by making right decision which is sustainable and consistent over years.

With Economic activities on downturn, we do see challenge in short term in both Enterprise and Telecom market growth, which would continue to grapple with fewer orders as the markets have shrunk due to Covid-19 which in-turn put pressure on margins in the market place for every single opportunity. With this new normal, we do expect the market to take longer time to bounce back, even though we could see some surge in business immediately after the lockdown is lifted.

Your company would see an impact in the Enterprise Network copper business as we continue to see work from home adoption growing with office space expansion requirements coming down and going slow in short term. However, we do see continues growth in Fiber Business over copper due to multifold increase in Bandwidth requirements, with denser wireless & deeper fiber deployments across the upcoming infrastructure projects.

With stable Government in place, policy decision-making being quick and recent stimulus package announcement due to Covid-19, towards Infrastructure growth would improve the overall business sentiment and investments in next few Quarters. Market are expected to improve driven by investments in Infrastructure projects, Defense sector, BFSI, Pharma, Healthcare, E-commerce, Manufacturing, Digital India and Smart city initiatives where your Company will be able to favorably participate in the areas of its strength within each opportunity as the market activities picks up. During the year, your company will continue its focus on sustaining revenues and profitability by realigning cost structure by looking at ways of cost reduction to be competitive in the market place.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of SEBI (LODR) Regulations, 2015, the Management Discussion and Analysis Report for the year under review, is presented in a separate section forming part of the Annual Report.

DIRECTORS

Pursuant to the provisions of section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ravi Bosco Rebello retires by rotation at the ensuing Annual General Meeting of the Company and being eligible offers himself for re-appointment.

INDEPENDENT DIRECTORS

The Company has received declarations from the Independent Directors of the company under Section 149(7) of the Companies Act, 2013, confirming that they meet the criteria of independence as provided in section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has also received declarations from the Independent Directors of the company under Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 confirming that they have registered themselves with the Indian

Institute of Corporate Affairs, Manesar (IICA) for inclusion of their name in the data bank maintained by IICA in compliance of Rule section 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

KEY MANAGERIAL PERSONNEL

There were no changes in the Key Managerial Personnel of the Company during the year.

BOARD MEETINGS

Six Board meetings were held during the financial year 2019-20 on May 28, 2019; July 16, 2019; August 05, 2019; November 05, 2019; January 30, 2020 and March 02, 2020. The details of meetings held by various Committees of the Board are given in the Corporate Governance Report.

AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee is given in the Corporate Governance Report. The Board has accepted all the recommendations made by the Audit Committee.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3) (C) of the Companies Act, 2013, the Directors based on the information and representations received from the Company Management confirm that:

a. In the preparation of Annual Accounts, the applicable Accounting Standards have been followed with no material departures;

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 at the end of the financial year and of the profit of the Company for that period;

c. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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;

e. They have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and have effectively; been operating and

f. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systemsare adequate and operating effectively.

DIRECTORS APPOINTMENT AND REMUNERATION

Considering the requirements of the skill-sets on the Board, persons having professional expertise in their individual capacity as independent professionals and who can effectively contribute to the Companys business and policy decisions are considered by the Nomination and Remuneration Committee for appointment of new Directors on the Board. The Non-Executive Independent Directors appointed on the Board are paid sitting fees for attending the Board and Audit Committee Meetings. No other remuneration or commission is paid to the Non-Executive Independent Directors. Non-Executive Non-Independent Directors are neither paid any sitting fees nor paid any commission. The remuneration paid to the Managing Director is governed by the relevant provisions of the Companies Act, 2013, rules of the Company and Members approval. Executive Compensation Policy Guidelines has been placed on the Companys website www.adckcl.com/AboutADC/Policies.

BOARD EVALUATION

The Companys Policy and Process for Board evaluation lays down a structured questionnaire to be used in the evaluation of the entire Board of the Company, Board Committees and Individual Directors. This Policy has been displayed in the Companys website www.adckcl.com.

Using the structured questionnaire, the Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Board members pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations. The Directors have expressed their full satisfaction with the performance of the Board, Board Committees and the members of the Board.

Further, the Independent Directors, at their meeting held during the year, reviewed the performance of the Board, Non-Independent Directors and other matters as stipulated under the SEBI Listing Regulations.

CORPORATE GOVERNANCE

Your Company has always practiced sound corporate governance and has complied with various provisions of Corporate Governance.

As required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") Corporate Governance Report together with the certificate from Statutory Auditors of the Company on compliance with the conditions of corporate governance stipulated in the SEBI Listing Regulations during the year ended March 31, 2020 is provided in a separate section of the Annual Report.

CODE FOR PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code of practices and procedures for fair disclosure of unpublished price sensitive information which has been displayed on the Companys website at www.adckcl.com.

WHISTLE BLOWER MECHANISM

The Company has established a mechanism called "Vigil Mechanism Policy" for employees, directors and others who are associated with the Company to report to management instances of unethical behavior, actual or suspected fraud or violation of the Companys code of conduct. The Policy provides adequate safeguards against victimization of employees/directors who avail the mechanism. The Vigil Mechanism also cover the Whistle Blower mechanism aspect as stipulated under the Companies Act, 2013 and the SEBI Listing Regulations.

The Company affirms that no person has been denied access to the Audit Committee in this respect. The policy has been communicated to all employees by displaying the same on the Companys website.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has implemented a policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace. The Company is committed to creating a safe and healthy working environment. The Company believes that all individuals have the right to be treated with dignity and strives to create a workplace which is free of gender bias and Sexual Harassment. The Company has a zero tolerance approach to any form of Sexual Harassment. The policy has been displayed in the Companys website.

The Company has not received any complaint of sexual harassment during the year under review.

RISK MANAGEMENT

The Company has formed a Risk Management Committee and the constitution and terms of reference of this Committee are set out in detail in the Corporate Governance Report. The Risk Management Committee at its meeting held on March 02, 2020 discussed the various risks encountered by the Company and the processes adopted by the Company to mitigate these risks. The same was also reviewed by the Board of Directors at its meeting held on the same day.

RELATED PARTY TRANSACTIONS

The Related Party Transaction Policy for determining the materiality of related party transactions and on the dealings with related parties has been displayed in the Companys website www.adckcl.com.

All transactions with related parties are placed on a quarterly basis before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the Transactions which are foreseeable and of a repetitive nature.

All transactions with related parties during the year were in the ordinary course of business and at arms length. There are no related party transactions during the year having potential conflict with the interest of the Company at large. The details of related party transactions are disclosed in Note No. 32 to the Financial statements. Information pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 on

Material Related Party Transactions for the financial year ended March 31, 2020 in the prescribed Form AOC-2 is annexed to this report as Annexure A.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Your Directors to the best of their ability have laid down internal financial controls to be followed by the

Company, which they believe are adequate keeping in view the size and nature of Companys business.

Adequate financial procedures are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. This ensures the quality and reliability of financial data, financial statements and financial reporting.

Your Companys internal financial controls are deployed through an internally evolved framework that address material risks in your Companys operations and financial reporting objectives, through a combination of entity level controls and process controls (both manual and automated), information technology based controls, period end financial reporting and closing controls and through internal audit. The Audit Committee of the Board reviews the adequacy of internal financial controls on an ongoing basis to identify opportunities for improvement in the existing systems to further strengthen the internal control environment in your Company.

AUDITORS AND AUDITORS REPORT

At the 31st Annual General Meeting of the Company held on July 29, 2019 M/s. Deloitte Haskins & Sells were appointed as the Statutory Auditors of the

Company for a term of three years, to hold office from the conclusion of the 31st Annual General Meeting until the conclusion of the 34th Annual General Meeting to be held in the year 2022.

The Auditors report for the financial year ended March 31, 2020 does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of section 204 of the Companies, 2013 and the Rules made thereunder, M/s.V.Sreedharan and Associates, Practicing Company Secretaries were appointed as the Secretarial Auditors to conduct a secretarial audit of the Companys Secretarial and related records for the financial year 2019-20. The Secretarial Auditors Report in Form MR-3 for the financial year ended March 31, 2020 is annexed to this Report as Annexure B. The secretarial audit report does not contain any qualification, reservation or adversere mark.

REPORTING OF FRAUDS

During the year there was no instance of fraud which required the Statutory Auditors to report under section 143(12) of the Companies Act, 2013 and the Rules framed thereunder.

SECRETARIAL STANDARDS

The Company has complied with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has spent an amount of Rs.14 lakhs towards various CSR Programs undertaken by the Company during the year. Education and Health were the focal areas during the year. The Annual Report on CSR activities is in accordance with the Companies (Corporate Social Responsibility) Rules, 2014 is annexed to this Report as Annexure C.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION A. Conservation of Energy

During the year under review, the company continued its focus at every area on the energy conservation measures including highly effective preventive maintenance of various equipment.

B. Research and Development

• 5S+1implementation-Operationalexcellence initiative at plant which contributed to 2500 Square feet of free space in warehouse.

• Introduced products that would cater to Telecom and Enterprise market such as High-density Fiber optic Equipment Panels to meet todays high-density environments.

Armored Fiber Optic cords to meet specific requirement in Data centers to protect from rodents and continued focus on a Standard-compliant product portfolio to increase reach in SMB segment and tier-2 cities across the country.

MANAGERIAL REMUNERATION AND RELATED DISCLOSURES

The details of the remuneration paid to the Directors of the Company is mentioned in the Report of Corporate Governance. The disclosure pursuant to the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure D.

PARTICULARS OF EMPLOYEES

The information pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Rules") in respect of employees of the Company forms part of this report. However, in terms of Section 136 of the Companies Act, 2013, the Boards Report and Financial Statements are being sent to the Members of the Company and others entitled there to, excluding the statement of particulars of employees under Rule 5(2) of the Rules. The statement of particulars of employees is available for inspection by the Members of the Company at the Registered

Office of the Company during business hours on working days of the Company up to the date of the 32nd Annual General Meeting. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the address of the Registered Office of the Company.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years shall also be transferred to the demat account of the IEPF Authority Accordingly, during the financial year 2019-20 unclaimed dividend amount of Rs. 0.77 lakhs pertaining to dividend declared for the financial year 2010-11 was transferred to the Investor Education and Protection Fund on April 15, 2019 and Rs.0.32 lakhs pertaining to dividend declared for the financial year 2011-12 was transferred to the Investor Education and Protection Fund on September 30, 2019. Further, in terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, the Company transferred the corresponding shares, where the dividends for the last seven consecutive years have not been claimed by the concerned shareholders to the demat account of the IEPF Authority on April 10, 2019 & April 30, 2019 and September 05, 2019 respectively.

FOREIGN EXCHANGE EARNINGS AND OUTFLOW

During the year there was no Foreign Exchange earnings and the Foreign Exchange outflow was Rs.0.89 lakhs.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of section 92(3) and section 134(3)(a) of the Companies Act, 2013 an extract of the annual return for the year ended March 31, 2020 in Form MGT-9 is annexed to this report as Annexure E. Additionally, a copy of the annual return for the financial year 2018-

19 has been placed on the Companys website www.adckcl.com/investor relations/Annual Reports.

MATERIAL CHANGES AND COMMITMENTS BETWEEN END OF FINANCIAL YEAR AND DATE OF THE REPORT

There are no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of financial year of the Company to which the financial statements relate and the date of this report.

WEBSITE OF THE COMPANY

The Company has a website www.adckcl.com where information related to the Company are provided.

DEPOSITS

During the year under review, the Company has not accepted any deposits falling under the ambit of section 73 of the Companies Act, 2013 and as such, no amount on account of principal or interest on deposits was outstanding as on the date of the Balance Sheet.

LISTING

The equity shares of the Company are listed with BSE Limited. There are no arrears on account of payment of listing fees to them.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the business activities carried out by the Company.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys future operations.

ACKNOWLEDGEMENTS

Your Directors place on record its appreciation for the contributions made by the employees of the Company during the year under review. Your Directors also thank the customers, channel partners, distributors, vendors and bankers for their support and co-operation during the year. Your Directors also thank the Promoters of the Company for their advice and assistance during the year.

For and on behalf of the Board of Directors
S.Devarajan J.N.Mylaraiah
Chairman Managing Director
Place: Bangalore
Date: May 20, 2020