STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017

Tamil Nadu Ltd. NSE Code - TNTELE TABLE 1 - MARKET DATA (STANDALONE) (AS ON 9TH AUGUST, 2017) Sector - Cables NSE Market Price (`) 2.20 NSE Market Cap. (₹ Cr.) 10.05 Face Value (`) 10.00 Equity (` Cr.) 45.68 Business Group - Govt. of India 52 week High/Low (₹) 4.20/1.85 Net worth (₹ Cr.) * (62.45) Year of Incorporation - 1988 TTM P/E (TTM) N.A. Traded Volume (Shares) 1,500 TTM P/BV N.A. Traded Volume (lacs) 0.03 Registered Office Source - Capitaline, TTM - Trailing Twelve Month, N.A. - Not Applicable *As on 30th September, 2016 No 16, 1st Floor, Aziz Mulk, COMPANY BACKGROUND rd 3 Street, Thousand Lights, Telecommunications Ltd is a Government of India Enterprises. The Company is – 600 006, engaged in the manufacture of telephone cables. The Company's products include Tamil Nadu telecommunication grade optical fiber cables, ribbon cable, composite cables, self supporting aerial optical fiber cable, armored optical fiber cable and metal free optical fiber cable. The Company Website: company is an ISO 9001 certified company, having their optical fibre cable manufacturing www.ttlofc.in facility at M.M. Nagar. Their clients include BSNL, , Indian Railways, Reliance Infocom, AIRCEL, and Power Grid Corporation of India Ltd. Tamil Nadu Telecommunications Ltd was incorporated on May 13, 1988 as a public limited company. The company was set up as a joint venture between Telecommunications Consultants India Ltd, Tamilnadu Industrial Development Corporation Ltd and Fujikura Ltd of Japan. In the year 1998, the company embarked upon diversification of their products range with the manufacture of the state-of-art optical fiber cables, in technical collaboration with Fujikura Ltd of Japan.

Revenue and Profit Performance

Quarterly revenue and Profit (₹ CRORE) The revenue of the Company increased from ₹ 0.22 crores to ₹ 1.57 0.61 crores from quarter ending Sep’15 to quarter ending Sep’16. 2 0.61 0.22 The Company made a loss of ₹ 4.40 crores in quarter ending 0 Sep’16 vis-a-vis making a loss of ₹ 3.58 crores in quarter ending Sep'16 Mar'16 Sep'15 Sep’15. -2

-4 -3.58 -4.40 -6 -5.14

Revenue Profit

Source: Moneycontrol

Performance vis-à-vis Market 1.50 TABLE 2- Returns 1.00 1-m 3-m 6-m 12-m Tamil Nadu Tele. Ltd 0.00% -25.00% -34.33% -21.43% 0.50 Nifty 0.22% 3.99% 13.56% 14.89%

0.00 Aug 16 Oct 16 Dec 16 Feb 17 Apr 17 Jun 17

Tamil Nadu Telecommunications Ltd NIFTY

Source: Capitaline/ NSE

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STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017 TABLE 3 – FINANCIALS % Change (₹ Cr.) Sep’16 Mar’16 Sep’15 Sep ’16 vs Mar’16 Mar’16 vs Sep’15 Net Worth -62.45 -53.50 -44.75 N.A. N.A. Current Assets 14.99 24.00 29.17 -37.56% -17.72% Non-Current Assets 9.71 9.87 10.06 -1.59% -1.89% Total Assets 24.70 33.87 39.23 -27.08% -13.66% Investments - - - - - Finance Cost 2.09 1.93 2.11 8.29% -8.53% Long Term Liabilities 2.53 2.27 2.37 11.23% -4.22% Current Liabilities 84.62 85.10 81.61 -0.56% 4.28% Turnover 0.58 1.57 0.20 -63.06% 685.00% Profit After Tax (PAT) -4.40 -5.14 -3.58 N.A. N.A. EPS (₹) -0.96 -1.13 -0.78 N.A. N.A. Source - Money Control/Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Auditors have not made any qualifications in last 3 years viz. FY 2015-16, FY 2014-15 & FY 2013-14. However, the Auditors have drawn attention to the following Emphasis of Matter in FY 2015-16: “Without qualifying our conclusion, we draw, attention to S. No - 3– Note – 25 - Notes to Accounts. As at 31st March 2016, the Company’s accumulated losses of ₹ 10,996.11 Lakhs has eroded the Net Worth of the Company, indicating the existence of material uncertainty that may cast a doubt about the Company’s ability to continue as a Going Concern. The Company has incurred a loss of ₹ 1,595.42 Lakhs for the year under audit. Based on the mitigating factors discussed in the said note, the Management believes that the Going Concern assumption is appropriate.” Management reply for the above Emphasis of Matter: “As mentioned in Note no. 3, The requirement of OFC in the country is huge; however, the delay in procurement is due to various procedural matters/issues in execution of big projects by the Government Clients. The Company is hoping to get continuous orders from 2016-17 onwards regularly since the OFC market is picking up. The order booking position is expected to be continuously good. Considering the scope during the immediate future and TCIL’s continuous financial support, the accounts have been prepared on going concern basis.” Other Matters:

• “The Deferred Tax Asset has not been provided for, in the books of account, considering the absence of virtual certainty of earning profits and prudence concept. • Item no (vii)(a) of the Annexure to the Independent Auditor’s Report the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Excise, Duty of Customs, Value added Tax, Cess and other statutory dues with the appropriate authorities during the year as applicable to it except the Property Tax amounting to Rs.40,34,250/-. We are informed by the Company that efforts are made to get exemption being a sick Company. We are also informed that there are no employees who are eligible to be covered under Employees State Insurance scheme.” Management reply:

• “The Company has disclosed the facts of non-provisioning for deferred tax assets / liabilities vide Note no. 6(b) under “25. Notes to Accounts”. • With reference to clause 11.5.3 of the Sanctioned Scheme issued to the company by BIFR, the company had requested and continuously insisting the concerned authority for waiver of the Property Tax of the past and during the rehabilitation period. No positive reply from the authority is received. However, provision has been made in the books of accounts every year and part amount remitted during the year 2014-15. Continuously pursuing for waiver of the balance dues. On waiver, the liability

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STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017 will be reversed accordingly.”

Response Comment Frequency of Qualifications Not Applicable Have the Auditors made any adverse remark in last 3 years? No - Are the material accounts audited by the Principal Auditors? Not Applicable* - Do the financial statements include material unaudited financial statements? Not Applicable* -

* Not applicable as the Company does not have any subsidiary(ies) during the financial year 2015-16.

TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT 2015-16) Regulatory Norms Company % of Independent Directors on the Board 50% 14% % of Promoter Directors on the Board - 86% Number of Women Directors on the Board At least 1 1 Classification of Chairman of the Board - Executive Promoter Director Is the post of Chairman and MD/CEO held by the same person? - Yes Average attendance of Directors in the Board meetings (%) - 78.79%

Composition of Board: As per Regulation 17(1)(b) of the Listing Regulations, 2015, the Company should have at least 50% Independent Directors as the Chairman of the Board is a Promoter/Executive Director. The Company has 14% of Independent Directors and hence, it does not meet the regulatory requirement.

Management Reply with regards to Board Composition:

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. The Board as well as management control of the Company lies with TCIL. Being a Govt. Company, action already taken for induction of Independent Directors in the Board of the Company through TCIL with the Dept. of Telecommunications, Ministry of Telecommunications & IT. The same is being followed up through TCIL for early appointment. Board Diversity: The Company has 7 directors out of which 6 are male and 1 is female.

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STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017 TABLE 5 - FINANCIAL RATIOS % Change Ratios Sep’16 Mar’16 Sep’15 Sep ’16 vs Mar’16 vs Mar’16 Sep’15

Inventory Turnover 0.18 0.44 0.03 -58.76% 1,274.85%

Debtors Turnover 0.06 0.13 0.01 -56.35% 841.87%

Fixed asset Turnover 0.06 0.16 0.02 -62.46% 700.11% Ratios Turnover Current Asset Turnover 0.04 0.07 0.01 -40.83% 854.10%

Operating Profit Margin -384.48% -200.00% -690.00% N.A. N.A. Net Profit Margin -758.62% -327.39% -1,790.00% N.A. N.A. Return on Assets (ROA) N.A. N.A. N.A. N.A. N.A. Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

ReturnRatios Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Current Ratio 0.18 0.28 0.36 -37.21% -21.10%

Quick Ratio 0.14 0.24 0.28 -41.99% -14.49%

Cash Ratio 0.02 0.10 0.10 -81.11% -4.90%

Ratios Liquidity Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A.

Debt to equity ratio N.A. N.A. N.A. N.A. N.A.

Ratios Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Solvency

Market Cap / Sales 23.24 8.73 74.25 166.34% -88.25% Market Cap/ Net Worth N.A. N.A. N.A. N.A. N.A. Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A. TradingRatios Source - Money Control

% Change TABLE 6 - TRADING VOLUME Jun’17 Dec’16 Jun’16 Jun’17 vs Dec’16 vs Dec’16 Jun’16 Trading Volume (shares) (avg. of 1 qtr) 927 2,672 826 -65.29% 223.66% Trading Volume (shares) (high in 1 qtr) 10,400 16,880 5,592 -38.39% 201.86% Trading Volume (shares) (low in 1 qtr) 1 15 1 -93.33% 1,400% Ratio - High/low trading volume 10,400 1,125.33 5,592 824.17% -79.88% Ratio - High/average trading volume 11.21 6.32 6.77 77.50% -6.73% Source: Capitaline

TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS Mar'17 Sep'16 Mar'16 Comments

Promoter shareholding 63.63 63.63 63.63 • No new equity shares were issued during the

period from Mar’ 16 to Mar’ 17.

(%) • Promoter shareholding remains unchanged Public - Institutional shareholding 24.02 24.02 24.02 during the above period. • No other changes were observed in the Public - Others shareholding 12.35 12.35 12.35 shareholding pattern during the said period.

Shareholding • Promoters have not pledged/ encumbered Non-Promoter Non-Public 0.00 0.00 0.00 Shareholding any shares. Source: NSE

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STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017 MAJOR SHAREHOLDERS (AS ON 31st MARCH, 2017) S. No. Promoters Shareholding S. No. Public Shareholders Shareholding 1 Telecommunications Cons. India Ltd. 49.00% 1 State bank of India 9.30% 2 Tamilnadu Industrial Development Corp. Ltd 14.63% 2 Andhra Bank 4.53% 3 Punjab National Bank 2.77% Source: NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS Market Activity of Promoters Promoters have not sold/bought any shares in last one year Preferential issue to promoters No preferential issue was made to promoters in last one year Preferential issue to others No preferential issue was made to other shareholders in last one year GDRs issued by the Company The Company did not issue any GDRs in last one year Issue of ESOPs/Issue of shares The Company does not have any ESOP Scheme. Further, no new equity shares were issued other than Preferential allotment by the Company in last one year. Source - Annual Report 2015-16

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY Sr. No. Name and Description of main products / services % to Total turnover of the Company 1 Manufacturing of Optical Fiber Cables for Telecommunications 100 Source - Annual Report 2015-16

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STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017 Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share Profit After Tax 퐸푃푆 = Number of outstanding shares P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company Price of each share 푃/퐸 푟푎푡𝑖표 = Earnings per share Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over a period. Sales Turnover 퐼푛푣푒푛푡표푟푦 푇푢푟푛표푣푒푟 푟푎푡𝑖표 = Inventory Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business can turn its accounts receivable into cash during a period Sales Turnover 퐷푒푏푡표푟푠 푇푢푟푛표푣푒푟 푟푎푡𝑖표 = Accounts recievables Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets Sales Turnover 퐹𝑖푥푒푑 퐴푠푠푒푡 푇푢푟푛표푣푒푟 푟푎푡𝑖표 = Fixed Assets Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets Sales Turnover 퐶푢푟푟푒푛푡 퐴푠푠푒푡 푇푢푟푛표푣푒푟 푟푎푡𝑖표 = Current Assets Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating income (also known as “operating profit”) during a given period by its sales during the same period. Operating profit 푂푝푒푟푎푡𝑖푛푔 푃푟표푓𝑖푡 푀푎푟푔𝑖푛 = Sales Turnover Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales Net profit 푁푒푡 푃푟표푓𝑖푡 푀푎푟푔𝑖푛 = Sales Turnover

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STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017 Return on Assets: ROA tells you what earnings were generated from invested capital (assets) Net profit 푅푒푡푢푟푛 표푛 퐴푠푠푒푡푠 = Total Assets Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’ equity. Net profit 푅푒푡푢푟푛 표푛 퐸푞푢𝑖푡푦 = Net worth Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability and the efficiency with which its capital is employed. Net profit 푅푒푡푢푟푛 표푛 퐶푎푝𝑖푡푎푙 퐸푚푝푙표푦푒푑 = Total Debt + Equity share capital Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. Current Assets 퐶푢푟푟푒푛푡 푟푎푡𝑖표 = Current Liabilities Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities. Current Assets − Inventories 푄푢𝑖푐푘 푟푎푡𝑖표 = Current Liabilities Cash ratio: The ratio of the liquid assets of a Company to its current liabilities. Current Assets − Inventories − Account Recievables 푄푢𝑖푐푘 푟푎푡𝑖표 = Current Liabilities Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a Company's effectiveness in using its working capital. 푆푎푙푒푠 푇푢푟푛표푣푒푟 푊표푟푘𝑖푛푔 퐶푎푝𝑖푡푎푙 푇푢푟푛표푣푒푟 푟푎푡𝑖표 = Current Assets − Current Liabilities Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. 푆ℎ표푟푡 푇푒푟푚 퐷푒푏푡 + 퐿표푛푔 푇푒푟푚 퐷푒푏푡 퐷푒푏푡 푡표 퐸푞푢𝑖푡푦 푟푎푡𝑖표 = 푁푒푡 푊표푟푡ℎ Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a Company can pay interest on outstanding debt. 퐸푎푟푛𝑖푛푔 퐵푒푓표푟푒 퐼푛푡푒푟푒푠푡 푎푛푑 푇푎푥 퐼푛푡푒푟푒푠푡 퐶표푣푒푟푎푔푒 푅푎푡𝑖표 = 퐹𝑖푛푎푛푐푒 퐶표푠푡 Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per- share stock price by the per-share revenue. 푀푎푟푘푒푡 퐶푎푝 푀푎푟푘푒푡 퐶푎푝/푆푎푙푒푠 푟푎푡𝑖표 = 푆푎푙푒푠 푇푢푟푛표푣푒푟 Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth. 푀푎푟푘푒푡 퐶푎푝 푀푎푟푘푒푡 퐶푎푝/푁푒푡푤표푟푡ℎ 푟푎푡𝑖표 = 푁푒푡푤표푟푡ℎ Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit. 푀푎푟푘푒푡 퐶푎푝 푀푎푟푘푒푡 퐶푎푝/푃퐴푇 푟푎푡𝑖표 = 푛푒푡 푝푟표푓𝑖푡 Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.

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STAKEHOLDERS EMPOWERMENT SERVICES TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in S ECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017 푀푎푟푘푒푡 퐶푎푝 푀푎푟푘푒푡 퐶푎푝/퐸퐵퐼푇퐷퐴 푟푎푡𝑖표 = 퐸퐵퐼푇퐷퐴 Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year

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