Railtel Corporation of India Ltd Directors Report.

Dear Shareholders,

Your Companys Directors are pleased to present 20th Annual Report of the Company, along with Audited Accounts, for the financial year ended 31st March, 2020, prepared in accordance with the provisions of Companies Act, 2013 and rules made thereunder.

1. Company Overview

RailTel Corporation of India Ltd. is one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fiber network on exclusive Right of Way (ROW) along Railway track. The biggest USP of RailTel is its ownership of a Pan-India 58000+ RKM of Optic fibre network which covers all important towns & cities of the country and several rural areas covering 70% of Indias population. RailTel with strong nationwide presence is committed to bring cutting edge technology and offer innovative services to the Indian Telecom market. With its Pan India high capacity network, RailTel is working towards creating a knowledge society at various fronts.

Equipped with ISO-9001-2008, ISO-27001:2005 and ISO 20000-1:2011 certification, RailTel offers a wide gamut of managed telecom services to Indian Telecom market. The service includes RailTel e-office, Managed lease lines, Tower collocation, MPLS based IP-VPN, Internet, Data Center services, HD Video Conferencing Services, NGN based voice carriage services to Telecom Operators, Services to Internet Service Providers, MSOs, Enterprises, Banks, Government Institution/ departments, Educational Institutions /Universities, etc.

RailTel being a "Mini Ratna (Category-I)" PSU is steaming ahead in the enterprise segment with the launch of various services coupled with capacity augmentation in its Core network. Your company stands as the only telecom PSU, which is a 100% debt free company and consistently profit making PSU in telecom sector.

2. Financial Performance

During the year, your Company has achieved total consolidated turnover of 1166 crore. The Company has observed an increase of 9.63 % in its revenue from operations which comes out to be 1081 Crore on standalone basis. The total turnover of the Company during the year is 1112 Crore comprising of other income of 31 Crore. The summarized financial results of your Company are shown in Table 1.

3. Share Capital

There is no change in the capital structure of the Company during the period under review and from the end of the FY till the date of this report.

Accordingly, Issued, Subscribed and Paid-up Share Capital is 320.94 crore divided into 32.09 crore Equity Shares of 10 each as on 31st March, 2020 including 305.94 crore issued for consideration other than cash.

Table 1: Financial Performance of Company ( In Crore)

Particulars Year ended Year ended Year ended Year ended
31/03/2020 31/03/2019 31/03/2020 31/03/2019

Consolidated

Standalone

Total Revenue 1166 1038 1112 1017
- Revenue from Operations 1128 1003 1081 986
- Other Income 38 35 31 31
Expenditure 801 708 751 690
Gross Margin 365 330 361 327
Depreciation 131 112 131 112
Profit Before Interest, Tax & Exceptional items 234 218 230 215
Interest Nil Nil Nil Nil
Exceptional Item 49 37 49 37
Tax/ Others 44 69 43 68
Profit for the Year 141 112 138 110
Basic EPS ( ) 4.40 3.48 4.31 3.42

4. Dividend

Your Company has a consistent track-record of dividend payment. The Board of Directors of your company had eariler approved payment of an interim dividend amounting to 20 Crore. Further, the Board has recommended payment of final dividend of 48.06 Crore for the FY 2019-20. The total dividend payment for the FY 2019-20 will be 68.06 crore as compared to 64.20 Crore (excluding dividend distribution tax) for the FY 2018-19. In terms of Regulation 43A of SEBI (LODR) Regulations and the guidelines on "Capital Restructuring of Central Public Enterprises" issued by the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy. The said Policy is annexed to this report at Page No-57 and is also available on the Companys website i.e www.railtelindia.com

5. Railways Revenue Share

The Company is also contributing by way of revenue share @ 7 % on services to Indian Railways and the total share of such contribution comes to 31.81 crore as against such share of 28.43 crore in the preceding year. The cumulative revenue share to Railways amounting to 268 crore till this year.

Besides, the Company has also paid license fee @ 8% (at present) to DoT, Govt. of India on its income from telecom business carried by it under licenses granted to it.

6. Deposits

The Company has not accepted or invited any deposits under Section 73 of the Companies Act, 2013 read with Companies

7. Reserves

The Company appropriated its profit earned during the year under review. It has transferred 40 Crore to the General Reserves during the year. The total reserves & surplus at the end of the FY 2019-20 is 1040 crore (Standalone).

8. Capital Expenditure

During the year, Capital expenditure of 62 crore approx. was incurred mainly on NBCC Quarters, OFC related assets, Telecom & Radio equipments etc. The Company made commitments to the tune of 62.69 crore on capital account and accordingly, expenditure would be booked during the current financial year, in addition to the capital expenditure allocated for the year 2019-20.

9. Directors and Key Managerial Personnel

During the FY 2019-20, following changes took place in the Board Composition.

Shri Puneet Chawla the then ED/Mobility (S&T)/ RB was appointed as Chairman and Managing Director of the Company w.e.f. 10/05/2019 (earlier holding additional charge).

Shri Sanjeeb Kumar has ceased to be Director/ Finance (Addl. Charge) of the Company w.e.f. 03/04/2019.

Shri Sanjeev Jain was ED/Finance/RB and was entrusted with the additional charge to the post of Director/Finance of the Company w.e.f. 11/04/2019 to 04/09/2019.

Shri Sunil Gupta has ceased to be Part time Govt. Nominee Director of the Company w.e.f. 06/05/2019.

Shri Umesh Balonda was ED/Tele/RB and was appointed as Part time Govt. Nominee Director of the Company w.e.f. 06/05/2019.

Dr. Anupam Alok had earlier ceased to be Part-time non-official/Independent Director of the Company w.e.f. 01/04/2019. However, he was further re-appointed as Part-time non-official/Independent Director of the Company w.e.f.12/07/2019 to 31/03/2020.

Shri Ashok Goel had earlier ceased to be Part-time non-official/Independent Director of the Company w.e.f. 01/04/2019. However, he was further reappointed as Part-time non-official/Independent Director of the Company w.e.f.12/07/2019 to 31/03/2020.

Shri Chinnsamy Ganesan has been appointed as Part-time non official/Independent Director of the Company w.e.f. 16/07/2019.

Sh. Anand Kumar Singh has been appointed as Director/Finance of the Company w.e.f. 04/09/2019.

Sh. Anand Kumar Singh has been appointed as Chief Financial Officer of the Company w.e.f. 26/09/2019.

Dr. Madhukar Sinha has ceased to be Part time Govt. Nominee Director of the Company w.e.f. 11/11/2019.

Shri Vinay Srivastava was ED/PSU/RB and was appointed as Part time Govt. Nominee Director of the Company w.e.f. 30/12/2019.

10. Declaration from Independent Directors

RailTel has received a declaration from its Independent Director stating that they have met the criteria of independence under Section 149(6) of the Companies Act, 2013. During the year, there has been no appointment or extension of an Independent Director for a term exceeding 5 (Five) years as per Section 149(10) of the Companies Act, 2013.

11. Number of Meetings of Board

The Board met 7 (Seven) times for transacting the business of the Company during the F.Y. 2019-20 i.e. on 24/05/2019, 09/07/2019, 16/08/2019, 26/09/2019, 26/12/2019, 22/01/2020 and 12/02/2020.

12. Remuneration to Directors

RailTel, being a Government Company under the provisions of the Companies Act, 2013, the whole time Directors of the Company are appointed by the President of India acting through Ministry of Railways. The functional Directors are appointed by the Government of India who draw remunerations under IDA pattern of pay scale except in case of CMD who is on deputation to RailTel from Ministry of Railways and is drawing Central Dearness Allowance (CDA) pay scales as pre-determined by the Government and as per the terms and conditions of their appointment issued by the Government of India from time to time. The Part time Government Nominee Directors on the Board of the Company do not draw any remuneration from the Company. The Part-time non-official Directors/Independent Directors are paid a sitting fee of 20,000/- per meeting for attending meetings of Board or Committees thereof, besides cost of travel and lodging in case of outstation Directors.

13. Committees of the Board

As on March 31, 2020, the Board had three committees namely the Audit Committee, the Corporate Social Responsibilities Committee, and the Nomination & Remuneration Committee. Further, on 07/08/2020, the Board has constituted one more Committee namely Stakeholders Relationship Committee. The detailed note on the composition of the Board and its committees are provided in the Corporate Governance Report section of this Annual Report.

14. Subsidiary

Your Company has a wholly owned subsidiary by the name of "RailTel Enterprises Limited" (REL) incorporated on 12th August, 2014 under the provisions of the Companies Act, 2013.

The authorised share capital of REL is 50 Crore and paid up share capital is 10 Crore. The entire equity share capital of REL is held by RailTel itself through its nominees. The affairs of the Company are managed, controlled and supervised by three Directors nominated by RailTels Board.

During the year under review, no company has become or ceased to be subsidiary/joint venture/associate Company of RailTel.

The consolidated Financial Statements of the Company duly audited by the Statutory Auditors are presented in the Annual Report.

A report on performance and financial position of the subsidiary is presented in a separate section of this Annual Report. Please refer Form AOC-1 annexed to the consolidated Financial Statements in the Annual

Report.

15. Projects Undertaken

The details of the projects undertaken during the year are included in Management Discussion & Analysis Report forming part of this report.

16. Procurement from Micro and Small Enterprises

The Govt. of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSE) Order 2012. In terms of said policy and issued guidelines, a mandatory procurement of a minimum of 25% of total annual procurement is required from Micro and Small Enterprises. Out of 25% target of annual procurement from MSEs, sub targets of 4% from MSEs owned by Schedule Caste or Scheduled Tribe Entrepreneurs and 3% from MSEs owned by Women Entrepreneurs are also earmarked for procurement.

The achievement of procurement target from MSEs (25% including a sub-target of 4% from MSEs owned by SC/ ST entrepreneurs) during the financial year 2019-20 in compliance to the aforementioned Public Procurement Policy is shown in Table-2:

Table 2

Sl. Particulars 2019-20
( in Cr.)
1 Total annual procurement (in value) 539.19
2 Total value of procurement from MSEs 197.73
3 % age of procurement from MSEs (including SC/ST and women) 36.67%
4 Total value of procurement from only MSEs owned by SC/ST entrepreneurs 1.82
5 % age of procurement from MSEs owned by SC/ST entrepreneurs 0.92%
6 Total value of procurement from only MSEs owned by Women entrepreneurs 3.82
7 % age of procurement from MSEs owned by Women entrepreneurs 1.93%

17. Right to Information Act, 2005

The Right to Information Act, 2005 seeks to provide for setting out the practical regime of Right to Information for citizens to secure access to information under the control of Public Authorities in order to promote transparency and accountability in the working of every Public Authority. The RailTel being a responsible Public Sector Undertaking has complied with the provisions of the Right to Information Act, 2005 and designated CPIOs/ APIO and Appellate Authority as required under the provisions of the RTI Act, 2005. The details of RTI dealt during the year are as following:-

No. of RTI cases pending as on 1.4.2019 16
Received during the Year 119
Disposed off during the year 114
Pending as on 31/3/2020 5

18. Particulars of Loans, Guarantees or

Investments

During the year, RailTel has not given any loan or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

The detail of investments made by the Company is given in the notes to the Financial Statements.

19. Internal Controls Systems and their adequacy

The Company has an internal control system in commensuration with size, scale and complexity of its operations. During the year, the Company has engaged Internal Auditors to carry out Internal Audit of the Company. The highlights of internal audit report and their synopsis were placed before the Audit Committee for its review. Further, RailTel has implemented ORACLE ERP solution with name "Project Parivartan" and all modules like Projects, Procurement, Operations, Maintenance, Finance, HR, Sales and Marketing are live from December 2013. Implementation of "Project Parivartan" has empowered all employees to focus on their core competencies, making work environment stress free, at the same time ensuring transparency and decision making in the system. During year 2019-20, RailTels IT team continuously worked towards strengthening of core processes of these implemented modules so that users could effectively and efficiently use ERP for day to day work. The ERP System is implemented for RailTels Subsidiary company i.e. RailTel Enterprises Limited. The ERP application was functional and live w.e.f 1st Oct 2019. The integration of Railwire in ERP is also successfully completed. New ERP Customer Applications like Outsource Employee records, DG module for Data Centre, new features in Dash Board Application, REL supplier BG Application, new attendance system, Supplier BG application, EMD application, Vendor deduction module, JV approval process, Asset transfer application, PO vetting checker Maker functionality were also developed during FY 2019-20, apart from regular O&M and enhancements works including development of new reports. Further as per management and business requirement, During FY 2020-21 ERP team shall be working for development of new applications like Supplier BG application, EMD application, Vendor deduction form, JV approval process, Asset tagging process for CO, Auto invoicing logic for Railwire billing, payment integration with Bank, Dark Fiber Billing Application, Last Mile Provisioning Application, Mobile Based Dashboard Application, New Implementation for E-Invoicing. In next financial year RailTels IT team shall be working towards strengthening of existing ERP modules and development of other additional requirements including strengthening/updation of ERP Infra.

20. Annual Return

The extract of Annual Return pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 of Companies (Management & Administration) Rules, 2014 in Form- MGT 9 is forming part of this report and is placed at Annexure-I. The same would also be made available on the website of the Company i.e. www.railtelindia.com.

21. Managements Discussion and Analysis Report

Managements Discussion and Analysis Report for the year under review is presented in separate section forming part of this Annual Report.

22. Human Resource Development.

The Human Resource Development (HRD) function in the organization has been designed to maximize employee performance. HRD is primarily concerned with the management of people within organization and focusing on policies and systems. RailTel firmlybelieves in the strength of its most vital asset i.e. Human Resource. RailTel cares and values for its human resource which is the bedrock of success story. To keep the employees morale high, your Company extends several welfare benefits to them and their families by way of implementing various new and revised welfare policies for its Employees. As on 31st March, 2020, the Company had total manpower strength of 721 employees including regular, deputationist, contractual and consultants. The details are shown in Table-3. During the year, Company has also availed the services of 1325 outsourced employees.

Table 3

Category No. of Employees for the year ended 31.03.2019 No. of Employees for the year ended 31.03.2020
Regular Employees 486 468
Deputationist 45 47
On Contract 199 175
Consultants 24 31

The percentage of women employees, SC/ST/OBC employees, persons with disabilities and ex-servicemen out of regular employees of the Company is shown in Table-4:-

Table 4

Category No. of Employees for the year ended 31.03.2019 No. of Employees for the year ended 31.03.2020 % of total no. of regular employees during Financial year ended 31.03.2020 No. of recruitment made in these categories
Women Employees 60 57 12.4 0
SC Personnel 63 63 13.7 0
ST Personnel 17 18 3.9 1
Other Backward Classes 120 119 25.7 0
Persons with Disabilities 7 7 1.5 0
Ex-Serviceman 1 1 0.2 0

The Company has been following the Govt. Guidelines regarding reservation for SCs, STs, OBCs, Persons with disabilities (Pwds) and ex-servicemen.

23. Rajbhasha (Official Language)

The Company follows guidelines of Directorate of Official Language, Ministry of Railways and Department of Official Language, Ministry of Home Affairs for effective implementation of Official Language. The Company has its Rajbhasha Karyanvayan Samiti at Corporate level which reviews progress of use of official language in day-to-day office working by of quarterly meetings held regularly involving Regional Heads also. Executives are motivated to do their work in Hindi using easy vocabulary. Unicode facility has been made available in all computers/laptops in office. On the occasion of Hindi Diwas, 2019, Hindi Pakhwada was observed from 9th Sept to 23rd Sept, 2019 in RailTel Corporation of India Ltd. During the Hindi Pakhwada various activities were organized i.e-(1) Noting & Drafting Competition (2) Short Story competition (3) Self written poetry competition (4) Hindi Dictation competition and (5) Hindi quiz competition. On the concluding day of Hindi Pakhwara, Hindi Workshop was organized wherein Retd. Professor/JNU Sh Ram Vaksh was invited as Chief Guest. He exchanged his valuable views over importance of Rajbhasha. Winners of competitions were awarded with cash prizes and Hindi Books. RailTel has published quarterly pictorial newsletter regularly under title "RailTel Gatividhiyan" in Hindi starting its first Edition from Oct. to Dec., 2018 quarter and thereafter the same is being published regularly. Besides, issue of Hindi Magazine "RailTel Pragati" has also been published on half yearly basis. So far three editions have been published.

The Company takes part in Railway Boards Official Language Implementation Committees Quarterly Meetings regularly and sends Quarterly progress reports to Railway Board. The Company is also a member of Town Official Language Implementation Committee (TOLIC). The periodical Hindi Progress report is also submitted to the TOLIC.

24. Prevention, Prohibition and Redressal of Sexual Harassment

In order to provide protection against sexual harassment of women at workplace and for prevention and redressal of complaints of sexual harassment, the Company has in place a policy to prohibit & prevent the social evil of Sexual Harassment at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder.

The objective of the policy is to provide women, a workplace, free from harassment, to ensure that every woman is treated with dignity and respect and to provide a speedy redressal mechanism to women who have been subjected to sexual harassment.

For the said purposes RailTel has an Internal Complaints Committee (ICC) in place at its Corporate Office and all four regional office(s) which is responsible to:

Investigate every formal written complaint of sexual harassment.

Meet at regular intervals.

Prepare an Annual Report containing the details of complaints of sexual harassment pursuant to the provisions of Act and provide the same to employer.

Take appropriate remedial measures to respond to any substantial allegations of sexual harassment.

During the year, ICC of RailTel has received one complaint under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 at the Corporate Office and the same is under process.

25. Risk Management Policy

The Board of Directors of your Company at their 78th meeting has adopted a risk management policy prepared by M/s. PricewaterhouseCoopers (PwC). The following potential risks have been identified inRailTel:

Project Risk

Strategy Risk

Market Risk

People Risk

Technology Risk

Reputation Risk

Insurable Risk

Contractor/Vendor Risk

Financial Risk

Operational & Compliance Risk

It has been advised to form a Risk Management Committee at Apex level. It has also been advised to form a Functional Risk Committee comprising of a Chief Risk Officer and the Core risk team which shall consist of functional heads from key functions/departments. The implementation of Risk Management policy in RailTel has been done.

26. Related Party Transactions

The related party transactions entered during the year are given in Form no. AOC-2 in terms of section 134(3) (h) of the Companies Act, 2013, read with rule 8 (2) of the Companies (Accounts) Rules, 2014 is forming part of this Report and is placed at Annexure-II.

27. Corporate Governance

The Company has always worked towards enhancing the Corporate Governance and the principles underlying the same within the organization. Your Company is in full compliance with DPE Guidelines on Corporate Governance. A report on the Corporate Governance is made part of this Annual Report. Pursuant to the requirements of DPE Guidelines, 2010 a certificate obtained from Practising Company Secretary forms part of this Annual Report and is placed at Annexure-III . In compliance with the directives of DPE, the Company is also regularly sending its quarterly and consolidated annual report in the prescribed manner to its Administrative Ministry/DPE. For each quarter, CPSEs are graded under various heads viz; Composition of Board, Non-Official Directors, Board Meetings, Code of Conduct, Audit Committee, Remuneration Committee, Board Disclosures, Directors Remuneration etc. on the basis of scores prescribed for each head. For the year under review, RailTel has scored an average score of 94.97% and on the basis of prescribed grading structure RailTel has been awarded with "Excellent" grade for ensuring Corporate Governance practices in the organization.

28. Corporate Social Responsibility

As per the provisions of Companies Act, 2013, your Company has formulated a CSR & Sustainability Policy which provides a broad framework within which the

Company will carry out the CSR activities. The policy aims for social and economic development of community in the areas of rural development, education, skill development, health and such other areas and adhere to sustainable and transparent business practices. The activities to be undertaken under the policy will be in accordance with Schedule-VII of the Act. During the FY 2019-20, RailTel has undertaken to spend 804.66 lakh on CSR activities which includes, 376.56 Lakh which is 2% of average net profit before tax (PBT) of the company earned during the immediately preceding three Financial Years plus 428.10 Lakh as unspent amount from previously sanctioned ongoing projects. Out of the CSR budget, 510.56 lakh was spent during FY 2019-20. During the year, RailTel has carried out various CSR activities like providing free coaching for engineering to under privileged children, establishing Digital Learning centres, Skill Development Centre for Women, Menstrual Health Management program in Govt. upper primary school, establishing Mini Science Centre in Schools, Contribution to PM Cares Fund etc. One of the RailTels CSR initiative namely ‘Menstrual Health Management is related to menstrual hygiene ailments in adolescent girls and women. This project aims to solve the problem by educating the educators & adolescent girls and by providing them sanitary pads with facility for disposal through incinerators. The project covers 180 Government Upper Primary Schools in 8 Aspirational districts of Uttar Pradesh (Chitrakoot, Balrampur, Bahraich, Sonbhadra, Shraswati, Chandauli, Siddharth Nagar, Fatehpur) covering around 25 thousand girl students across the state in selected districts in government upper primary schools. RailTel has contributed an amount of 2 Crore, out of the CSR budget of FY 2019-20, to the PM CARES Fund to support the Govt. of India in its crusade against unprecedented COVID-19 pandemic across the country. The fund, Prime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) has been setup by the Government of India with the primary objective of dealing with any kind of emergency or distress situation such as that posed by COVID 19 pandemic.

The Annual Report on CSR as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is forming part of this Report and is placed at Annexure-IV.

29. Amendment in existing Articles of

Association

The Company with the approval of its shareholders in the Extraordinary General Meeting held on 28/09/2020 has adopted revised set of Articles of Association to make them sync with the provisions of the Companies Act, 2013 and SEBI Listing regulations. Subsequently, the Company has also filed the requisite e-form MGT 14 and obtained approval of the Ministry of Corporate Affairs/Registrar of Companies to this effect.

30. Secretarial Standards

During the year, the Company is in compliance with the applicable Secretarial Standard issued by the Institute of Company Secretaries of India (ICSI).

31. Impact of COVID-19

In late 2019, COVID-19, commonly known as the "novel coronavirus was declared a global pandemic by the World Health Organization. Governments and municipalities around the world instituted measures in an effort to control the spread of COVID-19, including quarantines, shelter-in-place orders, school closings, travel restrictions, and closure of non-essential businesses. By the end of March, the macroeconomic impacts became significant, exhibited by, among other things, a rise in unemployment and market volatility. In order to contain the spread of COVID-19 virus, the Government of India initially announced a 21-day lockdown on March 24, 2020, which, after being subject to successive extensions, has been relaxed. The impact of the Covid-19 pandemic is likely to be minimal on telecom companies. With increasing number of people working from home, data volume is likely to jump in the short term. The subscriber base of RailWire has also increased substantially. RailTel has also created Virtual Private Network for 10,000 users of Indian Railways. During the lockdown period, there was phenomenal increase in usage of video conferencing service with 25 times increase as compared to pre COVID time to 83,58,336-man minutes of meeting time. As a responsible Corporate citizen, the Company stood with the nation in the fight against COVID-19. The Company has also taken various initiatives towards implementation of all precautionary measures to deal with the pandemic. RailTel has also extended financial support of 12.15 crores towards Prime Ministers Citizen Assistance and Relief in Emergency Situation Fund (PM CARES Fund) [ 2 crores contributed during the FY 2019-20 and 10.15 crores contributed after the close of this year which includes the contribution of 15 lakhs by the employees].

32. Vigil Mechanism

The Company has a Whistle-Blower Policy with an objective to provide its employees an avenue to raise complaints, in line with commitment of RailTel to the highest possible standards of ethical, moral and legal business conduct and to provide necessary safeguards for protection of employees from reprisals or victimization, for whistle blowing in good faith. The policy prescribes for reporting process and manner in which investigation must be conducted.

During the year, first full-time Chief Vigilance Officer has been appointed as per CVC requirement. This shall enable RailTel to pro-actively ensure transparency in various spheres of Companys activities as well as also take punitive measures wherever required. The status of Vigilance cases during the year is shown in Table-5:-

Table 5

Table 5
S. No. HEAD NUMBER NATURE OF CASE
1 Number of cases Pending as on 01.04.2019 6 Related to tender/ contract management procedure violation
2 Number of Vigilance cases received for investigation 3 during the year Related to tender/ contract management procedure violation
3 Number of Vigilance cases 5 disposed off during the year
4 Number of Vigilance cases pending as on 4 31.03.2020 Related to tender/ contract management procedure violation

33. Vigilance awareness week

As per the CVCs directives, Vigilance Awareness Week was observed in RailTel from 28.10.2019 to 02.11.2019 with the theme "Integrity A Way of Life (bZekunkjh & ,d thou kSyh ) During the week, a number of vigilance awareness activities were carried out and events organized involving RailTels Officials as well as for other Citizens. At the onset of the Vigilance week on 28/10/2019, RailTel officials undertook the integrity pledge administered by CMD to all the employees of Corporate Office as well as the employees from various Regional & Territorial offices across the Country joining in via RailTels in-house Telepresence Services. For connecting with the vendors & suppliers, customers and general public, an E-pledge link of CVC was posted on RailTels website and also promoted through social accounts for public awareness with request to take integrity pledge online. Banners and posters were setup across all offices i.e. Corporate Office and Regional/Territorial offices including at reception as well as outside and inside of the building for awareness of the employees, visitors and general public. An in-house training session was also organized highlighting various procurement guidelines and policies to provide transparency in the organisation.

34. Significant and material orders of regulators etc.

During the year, there has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

35. Statutory Auditors

The Comptroller and Auditor General of India (CAG) has appointed M/s Suresh Chandra & Associates of New Delhi as Statutory Auditors of the Company to audit the Financial Statements for the year ended 31st March, 2020. Besides, the CAG has also appointed the following Chartered Accountants as Branch named firms Auditors for auditing of four Regional Office(s) of the Company:

Auditor Region
Om Prakash S Chaplot & Co. Western Region
K.N. Gutgutia & Co. Eastern Region
Tukaram & Co. LLP Southern Region
Suresh Chandra & Associates Northern Region & Corporate Office

In terms of the authorization given by the members in their last Annual General Meeting, the Board on the recommendations of Audit Committee has already considered and approved payment of fee for all the above Auditors to the aggregate extent of 23.88 lakh excluding GST.

36. Cost Auditors

The Company has appointed M/s R. J. Goel & Co., Cost Accountants as Cost Auditors to audit the cost record maintained by the Company for the Financial Year 2019-20.

The Company has filed Form CRA-2 with the Ministry of Corporate Affairs in this regard.

37. Secretarial Audit

During the year, pursuant to provisions of Section 204 of the Companies Act, 2013 read with rules made thereunder, RailTel has appointed M/s P.C. Jain & Co, Company Secretaries, Faridabad as Secretarial Auditors of the Company for the Financial Year 2019-20. The Secretarial Auditors has conducted the audit and issued a Secretarial Audit Report in the format prescribed under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit report of the Company for the year ended 31st March, 2020 in Form MR-3 and the Managements reply on the observation/comments of Secretarial auditor forms part of this report and are placed at Annexure-V&VI respectively.

38. Comments of CAG

The comment(s) of CAG, if any, shall form part of this report.

39. Auditors Report

The Auditors Report of the Company for the year ended 31st March, 2020, is attached with the Financial Statement of the Company. There is no qualification in the Auditors Report on the Financial Statements of the company.

40. Energy Conservation, Technology Adoption, Foreign Exchange Earnings and Outgo

The Company is presently engaged in providing telecom services. The disclosure on Conservation of Energy and

Technology Absorption as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 and as prescribed under Rule 8 of Companies (Accounts) Rules, 2014 is forming part of this Report and is placed at Annexure-VII.

41. Presidential Directives

No Presidential Directive was received during the year.

42. MOU with Administrative Ministry

RailTel is signing a MoU with the Government of India, Ministry of Railways whereby laying inter alia the physical and financial targets. The MOU pertaining to FY 2020-21 has been signed with Ministry of Railways within stipulated time. During the year 2018-19, RailTel has got "Good" rating from DPE.

43. Event occurring after the Balance

Sheet Date

As such no significant events occurred between the end of the financial year to which this Financial Statements relates and date of this report.

44. Listing with Stock Exchanges

Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 28/12/2018 had approved listing of RailTels Shares on the Stock Exchange. The proposal is an "Offer for Sale" wherein the Government of India (existing shareholder) through Ministry of Railways disinvest its certain shareholding in the RailTel through "Initial Public Offering" (IPO) in the domestic market. Accordingly, the Department of Investment and Public Asset Management (DIPAM), Ministry of Finance has appointed ICICI Securities Limited, IDBI Capital Markets & Securities Limited and SBI Capital Markets Limited as the book running lead managers ("BRLMs") and Crawford Bayley & Co. and Squire Patton Boggs Singapore LLP as Domestic and International Legal Advisors for carrying out the process of disinvestment. Further, the Company has filed its Draft Red Herring Prospectus (DRHP) with capital market regulator (i.e. Securities and Exchange Board of India) for Initial Public Offering on September 30, 2020. The issue size consists of 8,66,53,369 equity shares excluding employee reservation portion, out of the holding of the Government of India.

45. Directors Responsibility Statement

In terms of the provisions of section 134(3)(c) of the Companies Act, 2013, as amended, your Directors confirm that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) the directors had 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 and loss of the company for that period; c) the directors had taken proper and the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; and e) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

46. Acknowledgements

Your Directors would like to place on record their sincere appreciation and gratitude to the Indian Railways, Government of India, Ministry of Communications and IT and other Ministries/Departments, subscribers of Companys telecom services, the stakeholders, and bankers and to all the State Governments, Local Bodies and Regulatory authorities for their continued cooperation and invaluable support. Your Directors express their deep appreciation for the hard work and dedicated efforts put in by the employees at all levels and look forward to their continued contribution in achieving the mission and objective of the Company.

For and on behalf of the Board

Sd/-
Puneet Chawla
Chairman and Managing Director
DIN: 08303340
Place: New Delhi
Date: 20/10/2020