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Directors Report of Neueon Towers Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting you the Seventh Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March, 2014.

1. Company''s Performance

Your Directors hereby report that the Company has achieved a turnover of Rs.1,80,098.61 lakhs upto 31.03.2014, as against the turnover of Rs.1,79,830.23 lakhs during the previous financial period ended 31.03.2013.

The highlights of the financial results are as follows:

(Rs. in lakhs)

Financial Financial Year ended Year ended Particulars 31st March, 31st March, 2014 2013

Profit before Depreciation 22,552.00 17,539.65 and Interest

Interest 20,030.91 14,667.33

Depreciation 2,254.56 2,216.32

Profit before tax 266.53 656.00

Provision for

- Current tax 105.55 131.31

- Deferred tax (19.07) 152.07

Profit after tax 180.05 372.61

Dividend on CRPS 3.26 3.47

Profit carried to Balance 176.79 369.14 Sheet

2. Review of Operations

The Company achieved a turnover of Rs.1,80,098.61 lakhs and earned profit after tax of Rs. 180.05 lakhs. The Gross Block as on 31.03.2014 stood at Rs. 60,371.11 lakhs and the Net Block as on 31.03.2014 stood at Rs.45,876.03 Lakhs.

3. Prospects

With the restructuring of its debt and implementation of the revival package approved by the CDR Cell your Company believes that it will gradually be able to revive its operations towards profitability. Your Company has been extremely fortunate to have full support of its employees during this period and all efforts are being made to garner support from the customers of the Company as well when the operations of the Company are revived.

4. Subsidiaries

a. Digitech Business Systems Limited

The operations of M/s. Digitech Business Systems Limited have been picked up and able to sustain in the market with a small margin. We have stepped up the marketing activities and planning to improve the activities during next year.

b. Telesuprecon Limited

M/s Telesuprecon Limited has branches in three countries viz., Malawi, Zambia and Kenya, providing telecom infrastructure services to Telecom operators. The Telecom Business in Africa was slowdown and many contracts were kept pending due to Global recession. The company is taking remedial measures to improve situation during next year. As per the law prevailing in Mauritius, financial statements of M/s Telesuprecon Limited are not required to be audited.

c. STL Africa Limited

As of date the concentration is more on CAD/CAM contracts and Company is planning to enter into Execution Contracts across Eastern Africa and has already started working in this direction.

5. Consolidated Financial Statements

Your Company has availed the general exemption from attaching a copy of the Balance Sheet, Profit and Loss Account, Directors'' Report and Auditors'' Report of the subsidiary Companies and other documents required to be attached under Section 212(1) of the Companies Act, 1956, to the Balance Sheet of your Company. The said exemption is granted vide circular issued by Ministry of Corporate Affairs dated 08.02.2011.

Accordingly, the said documents of subsidiary Companies are not being attached with the Balance sheet of the Company. A gist of the financial performance of the subsidiary Companies is contained in the report. The annual accounts of the subsidiary Companies are open for inspection by any member/ investor at the Company''s registered office and the Company will make available these documents and the related detailed information upon request by any investor of the Company or any investor of its subsidiary Companies who may be interested in obtaining the same. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is annexed to this Report.

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under Section 211(3C) of the Companies Act, 1956, the Audited Consolidated Financial Statements are annexed.

6. Industrial Relations

Your Directors are happy to report that the Industrial Relations have been extremely cordial at all levels throughout the year.

7. Future Plans

The Company is striving hard to capture the major share in the market of both Telecom and Transmissions sector on it''s own as well as through it''s subsidiary Companies viz., M/s. Digitech Business Systems Limited, Hong Kong, M/s. Telesuprecon Limited, Mauritius and M/s STL Africa Limited, Mauritius.

8. Dividend

As per the terms of issue of Cumulative Redeemable Preference Shares (CRPS), your Company is required to pay the dividend of Rs. 278,250/- (Previous year Rs.2,96,800/-) which represents 1% on 2,47,335 Cumulative Redeemable Preference Shares(CRPS) of Rs.100/- each to the holders of Cumulative Redeemable Preference Shares for the year under review, Further your Company also provided a provision of dividend tax to the extent of Rs.47,290/- (Previous year Rs.1,26,100/-).

During the period under review 49,460 1% Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each were redeemed as per the terms and conditions of the CRPS.

9. Directors

In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Shri Y.S. Chowdary, Chairman and Director of the Company will retire by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

In accordance with the provisions of Companies Act, 2013 and the Listing Agreement, the office of directorship of Shri A.S. Anand Kumar, Shri M.V. Bhaskara Rao and Shri L.V. Rao, existing Independent Directors pursuant to Clause 49 of the listing agreement, with the enactment of the Companies Act, 2013 (''the Act'') it is now incumbent upon every listed Company to appoint ''Independent Directors'' as defined in Section 149 of the Act, which has been notified w.e.f. 1st April 2014, who are not liable to retire by rotation and shall hold office for a term up to 5 (five) consecutive years. Accordingly, it is proposed to appoint Shri A.S. Anand Kumar, Shri M.V. Bhaskara Rao and Shri L.V. Rao, as Independent Directors under Section 149 of the Act and Clause 49 (revised) of the Listing Agreement to hold office for 5 (five) consecutive years from 30th September, 2014 to 29th September, 2019, whose office shall not be liable to retire by rotation, at the ensuing Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub- section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

The Resolutions proposing their reappointment / appointments as Independent Directors will be placed before the Shareholders for their approval at the ensuing Annual General Meeting of the Company.

10. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that :

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b. that 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 or loss of the Company for that period;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that they have prepared the annual accounts on a going concern basis.

11. Disclosures under Section 217(1)(d) of the Companies Act, 1956

Material changes and commitments which can affect the financial position of the Company occurred between the end of the financial year of the Company and date of this report:

S. Change

Particulars No. (Yes/No)

(a) The purchase, sale or destruction of a plant or the destruction of inventories. No

(b) A material decline in the market value of inventories or investments No

(c) The expiration of a patent which had given the Company a virtual monopoly in the No sale of its principal products.

(d) The settlement of tax liabilities of prior period and the settlement of any legal No or other proceedings either favourably or adversely, if they were pending at the balance-sheet date.

(e) The institution of importance proceedings against the Company. No

(f) Material change in the capital structure in the resulting from the issuance, retirement No or conversion of share capital or stock .

(g) The disposal of a substantial part of the undertaking or the profits or loss whether No of a capital or revenue nature.

(h) Alteration in the wage structure arising out of Union Negotiations. No

(i) Incurring or any reduction of long-term indebtedness. No

(j) Entering into or cancellation of contracts. No

(k) Refund of taxes or completion of assessments. No

12. Code of conduct

As the New Companies Act, 2013 has been made effective from 01st April, 2014 which replaces the erstwhile Companies Act, 1956 (to the extent of notified sections) and the provision of Section 149(8) requires that the Audit Committee shall review and recommend to the Board for their approval, the Code of Conduct for the Independent Directors. In this connection, the draft Code of Conduct for Independent Directors was placed before the Board along with the recommendations of the Audit Committee and the same was approved by the Board in the Meeting held on 30th May, 2014.

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on Companies website. Board Members and Senior Management personnel have affirmed Compliance with the Code for the financial year 2013-14. A separate declaration to this effect is made out in the Corporate Governance Report.

13. Statutory Auditors

The Statutory Auditors of the Company, M/s Venugopal & Chenoy, Chartered Accountants, Hyderabad, (Firm Registration Number: 004671S), who retire at the conclusion of ensuing Annual General Meeting, being eligible, offer themselves for re-appointment for a term of 3 (Three) years i.e., from the conclusion of this Annual General Meeting to the conclusion of the 10th Annual General Meeting in accordance with Section 139 of the Companies Act, 2013.

14. Personnel

There are no such employees in the Company, who are drawing remuneration more than Rs.6 lakhs per month during the financial period under review in accordance with Section 217(2A) of the Companies Act, 1956.

15. Human Resource Management

One of the key resources of Company is it''s employees. Your Company has been able to create a favorable work environment that encourages innovation and meritocracy. Your Company has put in place a scalable recruitment and human resource management systems.

The efforts of your Company in the area of employee management and HR practices have been proved effective in Human Resource Management.

The number of employees as on 31.03.2014 is 172.

16. Quality

Your Company accord to high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.

17. Insurance

All the properties and insurable assets of the Company, including Building, Plant and Machinery, stocks etc., wherever necessary and to the extent required, have been adequately the covered.

18. Listing of Company''s Securities

Your Company''s shares are currently listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai and the Global Depository Receipts are currently listed at the Luxembourg Stock Exchange.

19. Dematerialization of Shares

Your Company''s shares have been made available for dematerialization through the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

20. Fixed Deposits

Your Company has not accepted any fixed deposits from the public and is therefore, not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules, 1975.

21. Cost Auditors

M/s Nageswara Rao & Co., Cost Accountants, Secunderabad, (Regn.No.000332) Hyderabad were re-appointed as Cost Auditors of the Company for the Year 2014-15 as per the provisions of the Companies Act, 1956/2013 and the rules made there under.

Cost accounting records for the year ended 31st March, 2014 were maintained as per the Companies (Cost Audit Report) Rules, 2011. The Cost Auditor has submitted the report along with their observations and suggestions, and Annexure to the Central Government within the stipulated time period.

22. Corporate Social Responsibility

Pursuant to the provisions of Section 135 the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has constituted the Corporate Social Responsibility Committee to monitor the Corporate Social Responsibility Policy of the Company from time to time and to recommend the amount of expenditure to be incurred on the activities related to CSR.

Your Company is committed socially not only to compliances of all the statutory laws and regulations but also actively participates in the improvement of quality of life of society at large. Your Company has a strong sense of community responsibility. Your Company follows the policy which is more and more beneficial to the society at large by promoting and encouraging economic, social and educational development and also giving active support to local initiatives around its area of operation thereby promoting upliftment of people in varied arenas of life.

Your Company has retained collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, your Company, across its various operations is committed to making a positive contribution.

23. Whistle Blower Policy and Vigil Mechanism

Your Company recognizes the value of transparency and accountability in its administrative and management practices. The Company promotes the ethical behavior in all its business activities. The Company has adopted the Whistle blower Policy and Vigil Mechanism in view to provide a mechanism for the Directors and employees of the Company to approach Audit Committee of the Company to report existing/probable violations of laws, rules, regulations or unethical conduct.

24. Reconstitution of various committees of Board of Directors

Board of Directors of the Company, in accordance with Section 177 and 178 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and amended Clause 49 of the Listing Agreement, has reconstituted and widened the various Committees of the Board.

Accordingly, the Company has renamed its existing Remuneration Committee as Nomination and Remuneration Committee and have delegated to it powers as required under section 178 of the Act. Pursuant to Clause 49 (VI) of the listing agreement , your Company has constituted Risk Management Committee for framing, implementing and monitoring the risk management plan for the Company.

The scope of Audit Committee has also been widened so as to bring it in accordance with the requirement of the Section 177 of the Companies Act, 2013. The Company has also constituted a Corporate Social Responsibility Committee as required under Section 135 of the Companies Act, 2013.

25. Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo The details regarding Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given in the Annexure 1 and forms part of this report.

26. Corporate Governance

A detailed report on Corporate Governance has been included separately in the Annual Report. A report on Management Discussion and Analysis prepared and attached to the Directors'' Report also forms part of this Annual Report.

27. Explanations to any qualifications in Auditors'' Report

There are no adverse remarks in the Auditors'' Report dated 30th May, 2014. However, the status on the disputed statutory dues is mentioned in Point No.(ix) (b) & (ix) (c) of Notes on Financial Statements.

28. Acknowledgements

The Board of Directors of the Company extends their sincere appreciation to the Government, Bankers, Financial Institutions and others for their kind support. On behalf of the Company the Board of Directors thank the employees for their valuable efforts and the shareholders for their undaunted faith in the Company.

By order of the Board

S. Hanumanth Rao Y. Kamesh Director Managing Director

Place: Hyderabad Date: 28.08.2014


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting you the Sixth Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March, 2013.

1. Company''s Performance

Your Directors hereby report that the Company has achieved a turnover of Rs.1,79,830.23 lakhs upto 31.03.2013, as against the turnover of Rs. 2,03,425.14 lakhs during the previous financial period ended 31.03.2012.

The highlights of the financial results are as follows:

(Rs. in lakhs)

Financial Financial Year ended Year ended Particulars 31st March, 31st March, 2013 2012

Profit before 17,539.65 24,884.30

Depreciation and Interest Interest 14,667.33 13,224.17

Depreciation 2,216.32 1,952.75

Profit before tax 656.00 9,707.38

Provision for

- Current tax 131.31 2,610.23

- Deferred tax 152.08 1,025.90

Profit after tax 372.61 6,071.25

Dividend on CRPS 3.47 3.47

Profit carried to 369.14 6,067.78

Balance Sheet

2. Review of Operations

The Company achieved a turnover of Rs. 1,79,830.23 lakhs and earned profit after tax of Rs. 372.61 lakhs. The Gross Block as on 31.03.2013 stood at Rs. 48,869.00 lakhs and the Net Block as on 31.03.2013 stood at Rs. 36,628.48 Lakhs.

3. Prospects

With the restructuring of its debt and implementation of the revival package approved by the CDR Cell your Company believes that it will gradually be able to revive its operations towards profitability. Your Company has been extremely fortunate to have full support of its employees during this period and all efforts are being made to garner support from the customers of the Company as well when the operations of the Company are revived.

Indian GDP is estimated at 5.3% in F.Y.2013- 14 as per Prime Minister''s Economic Advisory Council (PMEAC). Indian steel demand is also expected to track GDP growth supported by easing interest rate cycle and resultant revival in infrastructure, construction, industrial and manufacturing sectors. Prediction of good monsoon in the current year, declining commodity prices globally, lower interest rates are positive to spur economic activity in the country. Notwithstanding, fragile recovery in US, sovereign debt crisis in Europe and slow down in China, domestic demand/ consumption is one of the primary drivers of Indian Economy, to be optimistic to show a GDP growth of above 7%. Based on these projections of the GDP, your Directors are confident that the projected operational figures would be achieved.

Corporate Debt Restructuring

Your Company had made a reference to the Corporate Debt Restructuring (CDR) cell constituted by Reserve Bank of India for restructuring of its financial debt. The CDR Cell positively considered the request of the Company and has approved the debt restructuring proposal given by the Company. For the purpose of implementation of the approved package as also to comply with the post-implementation requirements, IDBI Bank the lead consortium bank of the Company has been appointed as Monitoring Institution (MI) by the CDR Cell. To facilitate the process of monitoring of progress of sanction and implementation of the approved package by respective lenders and to revive the performance of the Company/ restructuring package on a continuous basis, a Monitoring Committee (MC), comprising of representatives of IDBI Bank, Central Bank of India and Exim Bank has also been constituted.

4. Subsidiaries

a. Digitech Business Systems Limited

The operations of M/s. Digitech Business Systems Limited have commenced in a small way. We have stepped up the marketing activities under the aegis of this Company and we hope to clock good turnover during the next year.

b. Telesuprecon Limited

M/s Telesuprecon Limited has branches in three countries viz., Malawi, Zambia and Kenya, providing telecom infrastructure services to Telecom operators. The Telecom Business in Africa was slowdown and many contracts were kept pending due to Global recession. We hope for the improvement of the situation during the next year. As per the law prevailing in Mauritius, financial statements of M/s Telesuprecon Limited are not required to be audited.

c. STL Africa Limited

As of date the concentration is more on CAD/CAM contracts and Company Is planning to enter into Execution Contracts across Eastern Africa and has already started working in this direction.

5. Consolidated Financial Statements

Your Company has availed the general exemption from attaching a copy of the Balance Sheet, Profit and Loss Account, Directors'' Report and Auditors'' Report of the subsidiary Companies and other documents required to be attached under Section 212(1) of the Companies Act, 1956, to the Balance Sheet of your Company. The said exemption is granted vide circular issued by Ministry of Corporate Affairs dated 08.02.2011. Accordingly, the said documents of subsidiary Companies are not being attached with the Balance sheet of the Company. A gist of the financial performance of the subsidiary Companies is contained in the report. The annual accounts of the subsidiary Companies are open for inspection by any member/ investor at the Company''s registered office and the Company will make available these documents and the related detailed information upon request by any investor of the Company or any investor of its subsidiary Companies who may be interested in obtaining the same. A statement containing brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2013 is annexed to this Report.

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under Section 211(3C) of the Companies Act, 1956, the Audited Consolidated Financial Statements are annexed.

6. Consolidation of shares

The Company has consolidated the face value of equity shares of the Company from Re.1/- each to Rs.10/- each (i.e., ten equity shares of Re.1/- each were consolidated into one equity share of Rs.10/-) on the record date of 10.08.2013, as per the approval of the shareholders of the Company dated 20.07.2013 given through Postal Ballot.

7. Industrial Relations

Your Directors are happy to report that the Industrial Relations have been extremely cordial at all levels throughout the year.

8. Future Plans

The Company is striving hard to capture the major share in the market of both Telecom and Transmissions sector on it''s own as well as through it''s subsidiary Companies viz., M/s. Digitech Business Systems Limited, Hong Kong, M/s. Telesuprecon Limited, Mauritius and M/s STL Africa Limited, Mauritius.

9. Dividend

As per the terms of issue of Cumulative Redeemable Preference Shares (CRPS), your Company is required to pay the dividend of Rs. 296,800/- (Previous year Rs.2,96,800/-) which represents 1% on 2,96,795 Cumulative Redeemable Preference Shares(CRPS) of Rs.100/- each to the holders of Cumulative Redeemable Preference Shares for the year under review, Further your Company also provided a provision of dividend tax to the extent of Rs.1,26,100/- (Previous year Rs.75,660/-).

10. Directors

Shri G. Srinivasa Raju and Shri A.S. Anand Kumar, Directors of the Company, are liable to retire by rotation in the ensuing Annual General Meeting of the Members of the Company and being eligible offers themselves for reappointment. During the year under review Shri K.S. Purohit, Director resigned from the Board of Directors of the Company on his personal reasons and the same was approved by the Board at their meeting held on 10.11.2012.

IDBI Bank Ltd., has withdrawn its nominee, Shri Anil Ratanpal, from the Board of Directors of the Company consequent to his superannuation and appointed Shri H. Biswas, as it''s Nominee Director w.e.f. 17.06.2013. This was approved by the Board at their meeting held on 14.08.2013.

11. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that –

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b. that 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 or loss of the Company for that period;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that they have prepared the annual accounts on a going concern basis.

12. Disclosures under Section 217(1)(d) of the Companies Act, 1956:

Material changes and commitments which can affect the financial position of the Company occurred between the end of the financial year of the Company and date of this report:

Change S.No. Particulars

(Yes/No)

(a) The purchase, sale or destruction of a plant or the destruction of inventories. No

(b) A material decline in the market value of inventories or investments No

(c) the expiration of a patent which had given the Company a virtual monopoly in the No sale of its principal products.

(d) The settlement of tax liabilities of prior period and the settlement of any legal No or other proceedings either favourably or adversely, if they were pending at the balance-sheet date.

(e) The institution of importance proceedings against the Company. No

(f) Material change in the capital structure in the resulting from the issuance, retirement No or conversion of share capital or stock .

(g) the disposal of a substantial part of the undertaking or the profits or loss whether No of a capital or revenue nature.

(h) Alteration in the wage structure arising out of Union Negotiations. No

(i) Incurring or any reduction of long-term indebtedness. No

(j) Entering into or cancellation of contracts and. No

(k) Refund of taxes or completion of assessments No

13. Code of conduct

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the Company''s website. Board Members and Senior Management personnel have affirmed compliance with the Code for the financial year 2012-13. A separate declaration to this effect is made out in the Corporate Governance Report.

14. Statutory Auditors

It is proposed to reappoint the existing Statutory Auditors of the Company M/s Venugopal & Chenoy, Chartered Accountants, Hyderabad for the financial year 2013-2014 also at a remuneration as may be fixed by the Board of Directors.

The Company has received letter from M/s. Venugopal & Chenoy, Chartered Accountants, Hyderabad to the effect that their appointment as Statutory Auditors, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and they are not disqualified for such appointment.

15. Personnel

There are no such employees in the Company, who are drawing remuneration more than Rs.6 lakhs per month during the financial period under review in accordance with Section 217(2A) of the Companies Act, 1956.

16. Human Resource Management

One of the key resources of Company is it''s employees. Your Company has been able to create a favorable work environment that encourages innovation and meritocracy. Your Company has put in place a scalable recruitment and human resource management systems.

The efforts of your Company in the area of employee management and HR practices have been proved effective in Human Resource Management.

The number of employees as on 31.03.2013 is 182.

17. Quality

Your Company accord to high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.

18. Insurance

All the properties and insurable assets of the Company, including Building, Plant and Machinery, stocks etc., wherever necessary and to the extent required, have been adequately the covered.

19. Listing of Company''s Securities

Your Company''s shares are currently listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai and the Global Depository Receipts are currently listed at the Luxembourg Stock Exchange.

20. Dematerialization of Shares

Your Company''s shares have been made available for dematerialization through the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

21. Fixed Deposits

The Company has not accepted any fixed deposits and the provisions of Section 58A of the Companies Act, 1956 are not applicable.

22. Cost Auditors

In pursuance of Section 233B of the Companies Act, 1956 read with circular no. 52/26/CAB – 2010 the Company has appointed M/s Nageswara Rao & Co., Cost Accountants, Secunderabad as the Cost Auditors for conducting audit of Cost Accounting Records in respect of steel products manufactured by the Company for the year 2012-13. The approval of the Central Government for the appointment has been received. The Company has reappointed them as Cost Auditors for the financial year 2013- 2014.

Cost accounting records for the year ended 31st March, 2013 were maintained as per the Companies (Cost Audit Report) Rules, 2011. The Cost Auditor shall submit the report along with their observations and suggestions, and Annexure to the Central Government within stipulated time period.

23. Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo

The details regarding Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given in the Annexure 1 and forms part of this report.

24. Corporate Governance

A detailed report on Corporate Governance has been included separately in the Annual Report. A report on Management Discussion and Analysis prepared and attached to the Directors'' Report also forms part of this Annual Report.

25. Explanations to any qualifications in Auditors'' Report

There are no adverse remarks in the Auditors'' Report dated 28th May, 2013. However, the status on the disputed statutory dues is mentioned in Point No.2.1 of Notes on Financial Statements.

26. Management Discussion and Analysis Report is also attached and forms part of this Report.

27. Acknowledgements

The Board of Directors of the Company extends their sincere appreciation to the Government, Bankers, Financial Institutions and others for their kind support. On behalf of the Company the Board of Directors thank the employees for their valuable efforts and the shareholders for their undaunted faith in the Company.

BY ORDER OF THE BOARD

S. HANUMANTH RAO Y. KAMESH

DIRECTOR MANAGING DIRECTOR

Place: Hyderabad

Date: 14.08.2013


Mar 31, 2012

The Directors have pleasure in presenting you the Fifth Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March, 2012.

1. Company's Performance

Your Directors hereby report that the Company has achieved a turnover of Rs. 203425.14 lakhs upto 31.03.2012 consisting of Twelve (12) months, as against the turnover of Rs. 174912.69 lakhs during the previous financial period ended 31.03.2011 consisting of Eighteen (18) months.

The highlights of the financial results are as follows:

(Rupees in lakhs)

Financial Year Financial Period ended 31st ended 31st March, 2012 March, 2011

Particulars consisting of 12 consisting of 18 months (From months (From 01-04-2011 to 01-10-2009 to 31-03-2012) 31-03-2011)

Profit before 24,920.82 24,025.51 Depreciation and Interest

Interest 13,224.17 9,953.81

Depreciation 1,952.74 2,679.11

Profit before tax 9,743.90 11,392.59

Provision for - -

Current tax 2,610.23 3,244.83

Deferred tax 1,025.91 287.51

Profit after tax 6,107.77 7,860.61

Dividend on 3.47 5.21 CRPS

Profit carried to 6,104.30 7,855.40 Balance Sheet

2. Review of Operations

The Company achieved a turnover of Rs.203425.14 lakhs and earned profit after tax of Rs.6107.77 lakhs. The Gross Block as on 31.03.2012 stood at Rs. 48688.21 lakhs and the Net Block as on 31.03.2012 stood at Rs.38656.82 Lakhs.

3. Subsidiaries of the Company

a. Digitech Business Systems Limited

The operations of M/s. Digitech Business Systems Limited have progressed in a small way. It earned revenue of Rs.11937.11 lakhs.

b. Telesuprecon Limited

M/s Telesuprecon Limited has branches in three countries, providing telecom infrastructure services to Telecom operators.

The telecom business in Africa has slowed down and many contracts were kept pending due to market conditions. The business is showing signs of positive growth and the contracts are being revived.

c. STL Africa Limited

STL Africa Limited, has achieved a turnover of Rs. 18901.17 Lakhs, and earned a profit of Rs. 4936.11 lakhs. The Company is concentrating to expand the business in the area of EPC Contract Segment.

d. Sujana Transmissions Limited

During the year under review, Sujana Transmissions Limited has been closed under Fast Track as per the Scheme introduced by the Ministry of Corporate Affairs, New Delhi.

4. Consolidated Financial Statements

Your Company has availed the general exemption from attaching a copy of the Balance Sheet, Profit and Loss Account, Directors' Report and Auditors' Report of the subsidiary Companies and other documents required to be attached under Section 212(1) of the Companies Act, 1956, to the Balance Sheet of your Company. The said exemption is granted vide circular issued by Ministry of Corporate Affairs dated 08.02.2011.

Accordingly, the said documents of subsidiary Companies are not being attached with the Balance sheet of the Company. A gist of the financial performance of the subsidiary Companies is contained in the report. The annual accounts of the subsidiary Companies are open for inspection by any member/ investor at the Company's registered office and the Company will make available these documents and the related detailed information upon request by any investor of the Company or any investor of its subsidiary Companies who may be interested in obtaining the same. A statement containing brief financial details of the Company's subsidiaries for the financial year ended March 31, 2012 is annexed to this Report.

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges and as prescribed by Accounting Standard 21 notified by the Government of India under Section 211(3C) of the Companies Act, 1956, the Audited Consolidated Financial Statements are annexed.

5. Industrial Relations

Your Directors are happy to report that the Industrial Relations have been very cordial at all levels throughout the year.

6. Future Plans

The Company is making all efforts to enhance the share of the market of both telecom and transmissions sector on it's own as well as through it's subsidiary Companies viz., M/s. Digitech Business Systems Limited, Hong Kong, M/s. Telesuprecon Limited, Mauritius and M/s STL Africa Limited, Mauritius. The present trend in the market and the opportunities available in market are analytically narrated elsewhere in this report.

7. Prospects

Indian GDP is estimated at 7.6% in F.Y. 2012- 13 as per Prime Minister's Economic Advisory Council (PMEAC). Indian steel demand is also expected to track GDP growth supported by easing interest rate cycle and resultant revival in infrastructure, construction, industrial and manufacturing sectors. Prediction of good monsoon in the current year, declining commodity prices globally, lower interest rates are positive to spur economic activity in the country. Notwithstanding, fragile recovery in US, sovereign debt crisis in Europe and slow down in china, domestic demand/ consumption is one of the primary drivers of Indian Economy, to be optimistic to show a GDP growth of above 7%.

8. Directors

Shri S. Hanumantha Rao and Shri L.V. Rao, Directors of the Company, are liable to retire by rotation in the ensuing Annual General Meeting of the Members of the Company and being eligible offers themselves for re- appointment. During the year under review Shri S. Venkatachalam, Director resigned from the Board of Directors of the Company and the same was approved by the Board at their meeting held on 14.11.2011.

Shri K. Raghavaiah has submitted his Resignation and the same was approved by the Board at thier meeting held on 28.05.2012 Shri Y. Kamesh was reappointed by the Board at their meeting held on 28.05.2012, subject to the approval of the members of the Company.

9. Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b. that 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 or loss of the Company for that period;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that they have prepared the annual accounts on a going concern basis.

10. Disclosures under Section 217(1)(d) of the Companies Act, 1956:

There are no material changes and commitments which can affect the financial position of the Company, occurred between the end of the financial year of the Company and the date of this report, which are to be disclosed under Section 271 (1 )(d) of the Companies Act, 1956.

11. Code of conduct

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the Company's website. Board Members and Senior Management personnel have affirmed compliance with the Code for the financial year 2011-12. A separate declaration to this effect is made out in the Corporate Governance Report.

12. Statutory Auditors

The term of office of the Company's existing Statutory Auditors M/s. R. Subramanian and Company, Chartered Accountants, Chennai, will come to an end at the conclusion of the ensuing Annual General Meeting of the Company. It is proposed to appoint M/s Venugopal & Chenoy, Chartered Accountants, Hyderabad as Statutory Auditors of the Company for the financial year 2012-13 at such remuneration as may be fixed by the Board of Directors.

Your Board of Directors recommended the appointment of M/s Venugopal & Chenoy, Chartered Accountants, Hyderabad, as Statutory Auditors of your Company. Your approval for such appointment is solicited. Your Company has received a letter from M/s Venugopal & Chenoy, Chartered Accountants, Hyderabad, to the effect that their appointment as Statutory Auditors, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and they are not disqualified for such appointment.

13. Personnel

There are no such employees in the Company, who are drawing remuneration more than Rs.6 lakhs per month during the financial year under review in accordance with Section 217(2A) of the Companies Act, 1956.

14. Human Resource Management

One of the key resources of Company is its employees. Your Company has been able to create a favorable work environment that encourages innovation and meritocracy. Your Company has put in place a scalable recruitment and human resource management systems.

The efforts of your Company in the area of employee management and HR practices have been proved effective in Human Resource Management.

The number of employees as on 31.03.2012 is 253.

15. Quality

Your Company gives high priority to quality, safety, training, development, health and environment. The Company endeavours to ensure continuous compliance and improvement in this regard.

16. Insurance

All the properties and insurable assets of the Company, including Buildings, Plant and Machinery, stocks etc., wherever necessary and to the extent required, have been adequately covered.

17. Listing of Company's Securities

Your Company's shares are currently listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai and the Global Depository Receipts are listed at the Luxembourg Stock Exchange.

18. Dematerialization of Shares

Your Company's shares have been made available for dematerialization through the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

19. Fixed Deposits

The Company has not accepted any fixed deposits and the provisions of Section 58A of the Companies Act, 1956 are not applicable.

20. Cost Auditors

In pursuance of Section 233B of the Companies Act, 1956 read with Circular No. 52/26/CAB-2010 the Company has appointed M/s Nageswara Rao & Company, Cost Accountants, Secunderabad as the Cost Auditors for conducting audit of Cost Accounting Records in respect of steel products manufactured by the Company for the year 2011-12. The approval of the Central Government for the appointment has been received. The Company has reappointed them as Cost Auditors for the financial year 2012- 2013.

Cost accounting records for the year ended 31st March, 2012 were maintained as per the Companies (Cost Audit Report) Rules, 2011. The Cost Auditors shall submit the report along with their observations and suggestions, and Annexure to the Central Government within stipulated time period.

21. Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo

The details regarding Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given in the Annexure 1 and forms part of this report.

22. Corporate Governance

A detailed report on Corporate Governance has been included separately and forms part of this Report.

23. Explanations to observations made in Annexure to Auditors' Report

(i) Explanation to Point No. ix

The Company is taking steps to pay all the dues in respect of income tax, TDS, WCT and Dividend Distribution Tax, in a phased manner. The claims of the authorities have been referred to experts, for their opinion and counsel. The Company will ensure payment of all statutory dues in the course of next financial year.

(ii) Explanation to Point No. xi

The Company also owes Rs. 28.47 Crores to M/s L& T Infrastructure and Finance Company Ltd and M/s. SICOM. The entire accounts reconcilation is going on as on date of this report and we are awaiting the outcome of the reconciliation and discussions we have had with above Financial Institutions. Company is exploring the possibilities of squaring up the account dues, by assigning a portion of Cash Flows.

24. Management Discussion and Analysis Report

A separate Management Discussion and Analysis Report is attached and forms part of this Report.

25. Acknowledgements

The Board of Directors of the Company extends their sincere appreciation to the Government, Bankers, Financial Institutions and others for their kind support. On behalf of the Company the Board of Directors thank the employees for their valuable efforts and the shareholders for their undaunted faith in the Company.

By order of the Board

S.Hanumanth Rao Y. Kamesh

Director Managing Director

Place : Hyderabad

Date : 11.08.2012


Sep 30, 2009

The Directors are pleased to place before you the Third Annual Report together with the Audited Accounts for the financial year ended 30th September, 2009.

1. Companys Performance

Your Directors hereby report that the Company has achieved a turnover of Rs. 69886.15 Lakhs upto 30.09.2009.

The highlights of the financial results are as follows:

(Rupees in Lakhs)

Particulars Financial Year ended Financial Period ended 30ft September, 2009 30ft September, 2008 consisting of consisting of 12 months 15 months (From01.10.2008 (From 01-07-2007) to 30.09.2009} to30-09-2008)

Profit before 9341.31 11553.51*

Depreciation and Interest

Interest 3066.41 2181.99

Depreciation 1343.89 1416.48

Profit before tax 4931.01 7955.04

Provision for

- Current tax 1437.11 1152.70

- Deferred tax 295.65 2671.09

- Fringe Benefit tax 2.56 8.14

Profit after tax 3195.69 4123.11

Dividend on CRPS 3.47 7.17

Profit carried to 3192.22 4115.94

Balance Sheet

* includes previous year income of Rs. 125.39 lakhs. " includes Rs. 615.36 lakhs of shortfall for earlier year.

2. Operations

The Company achieved a turnover of Rs. 69886.15 lakhs and earned profit after tax of Rs. 3195.69 lakhs. The Gross Block as on 30.09.2009 stood at Rs. 31203.31 lakhs and the Net Block as on 30.09.2009 stood at Rs. 25231.18 lakhs.

During the financial year, your Company had taken up several expansion programmes for its business growth both in India and abroad.

3. Subsidiaries

Digitech Business Systems

The operations of M/s. Digitech Business Systems Ltd. have commenced in a small way. It clocked a revenue of Rs. 1549.12 lakhs. The Unaudited Financial Statement upto 30.09.2009 are annexed from Page Nos. 63 to 64 and forming part of this Annual Report. Telesuprecon Limited

M/s Telesuprecon Limited has branches in three countries, providing telecom infrastructure services to Telecom operators. The Telecom Business in Africa was slowdown and many contracts were kept pending due to Global recession. The business is on positive growth and the contracts are being revived. But the recession effect on the Company would continue in the first half year.

Presently Telesuprecon is executing telecom works in three countries; Malawi, Zambia and Kenya and plans to expand its operations into other neighboring African countries. As per the law prevailing in Mauritius, financial statements of M/s Telesuprecon Limited are not required to be audited. Therefore, the Financial Statements upto 30.09.2009 are annexed from Page Nos. 53 to 61 and forming part of this Annual Report.

Sujana Transmissions Limited

Your Company has incorporated Sujana Transmissions Limited at Hyderabad. The operations of the subsidiary company are yet to commence. Therefore, audited accounts, Directors Report, Auditors Report and other related information of M/s. Sujana Transmissions Limited are not annexed.

The statement pursuant to Section 212 of the Companies Act, 1956 on the subsidiary Companies as on 30.09.2009 is given on Page No. 65

4. Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its subsidiaries, prepared and presented in accordance with Accounting Standard (AS) 21, are attached to and form part of the Annual Report.

5. Industrial Relations

Your Directors are happy to report that the Industrial Relations have been extremely cordial at all levels throughout the year.

6. Future Plans

The Company is striving hard to capture the major share in the market of both telecom and Transmissions sector on its own as well as through its subsidiary companies viz., M/s. Digitech Business Systems Limited, Hong Kong, M/s. Telesuprecon Limited, Mauritius and M/s. Sujana Transmissions Limited, Hyderabad. The present trend in the market and the opportunities available in market are analytically narrated elsewhere in this report.

7. Directors

Shri G.Srinivasa Raju, Shri K.S. Purohit, Shri A.S Anand Kumar, Directors of the Company, are liable to retire by rotation in the forthcoming Annual General Meeting of the Members of the Company and being eligible offers themselves for reappointment.

Change in Composition of Board of Directors Since the date of last AGM held on 27.02.2009.

Shri L.V. Rao has been appointed as an Additional Director of the Company at the meeting of the Board of Directors of the Company held on 29th July, 2009, who holds office up to the date of the ensuing Annual General Meeting of the Company. Notice has been received from a Member, under section 257 of the Companies Act, 1956, proposing the name of Shri L.V. Rao for appointment as Director liable to retire by rotation.

Shri V.S.R. Murthy, Director (Finance) has resigned from the Board of Directors of the Company with effect from 29.01.2009 and the same was approved by the Board at its Meeting held on 29.01.2009.

Shri R.K. Birla, Director of the Company had resigned from the Board of Directors of the Company with effect from 25.04.2009 and the same was approved by the Board at its Meeting held on 29.04.2009.

Shri K. Raghavaiah, Director has been appointed and redesignated as Director (Technical) on whole-time basis for a period of 2 (two) years w.e.f. 29-04-2009.

Shri Y.Kamesh has been appointed as Additional Director with effect from 29th July, 2009 on the Board of Directors of the Company, and also appointed as Managing Director of the Company for a period of 3 (three) years w.e.f .29th July, 2009.

8. Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating management, confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

b. that 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 or loss of the Company for that period;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That they have prepared the annual accounts on a going concern basis.

9. Promoter Group Companies

Pursuant to an intimation from promoters, names of promoters and companies comprising the "group" as defined in the Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969, have been disclosed in the Annual Report of the Company.

10. Code of Conduct

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on Companies website Board Members and Senior Management personnel have affirmed Compliance with the Code for the financial year 2008-09. A separate declaration to this effect is made out in the Corporate Governance Report.

11. Auditors

It is proposed to re-appoint the existing Statutory Auditors of the Company M/s. R. Subramanian & Company, Chartered Accountants, Chennai for the Financial Year 2008-2009 at a remuneration as fixed by the Board of Directors.

The Company has received a letter from M/s. R. Subramanian & Company, Chartered Accountants, Chennai to the effect that their appointment as Statutory Auditors, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and they are not disqualified for such appointment.

12. Personnel

Information in accordance with Section 217(2A) of the Companies Act, 1956 read with the Companies.

13. Human Resource Management

One of the key resources of Company is its employees. Your Company has been able to create a favourable work environment that encourages innovation and meritocracy. Your Company has put in place a scalable recruitment and human resource management systems.

The efforts of your Company in the area of employee management and HR practices have been proved effective in Human Resource Management.

The number of employees as on 30-09-2009 are 260.

14. Further issue of securities of the Company

a. Issue of Equity Shares on Preferential Basis

Pursuant to the special resolution passed by the members of the Company at the Extraordinary General Meeting held on 24th October, 2009, your Company had successfully completed the issue and allotment of 11,11,111 equity shares of Rs.5/- each at a premium of Rs. 31.00 per share to Non- Promoters.

b. Issue of Equity Shares through Global Depository Receipts (GDRs)

Pursuant to the special resolution passed by the members of the Company at the Extraordinary General Meeting held on 24th October, 2009, your Company had successfully completed the issue and allotment of 2,67,85,700 equity shares of Rs.5/- each at a premium of Rs. 47.416 per share underlying 53,75,140 Global Depository Receipts (GDRs) representing 5 equity shares per GDR, aggregating US$ 30.00 Millions.

The Global Depository Receipts have been listed on the Luxembourg Stock Exchange. The listing applications for listing of underlying equity shares are under consideration of BSE and NSE.

c. Issue of Equity Shares and Convertible Warrants by way of Preferential Allotment

Pursuant to the special resolution passed by the members of the Company through Postal Ballot on 19.11.2009, your Company had successfully completed the issue and allotment of 32,00,000 equity shares of Rs.5/- each at a premium of Rs.50/- per share and 3,13,00,000 convertible warrants of Rs. 5/- each at a premium of Rs. 50/- per warrant. Out of the above 3,13,00,000 convertible warrants, 1,00,00,000 convertible warrants were also converted into 1,00,00,000 equity shares of Rs.5/- each on 23rd December, 2009 and listing process at BSE and NSE is under progress.

15. Listing of Companys Securities

Your Companys shares are currently listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai and the Global Depository Receipts are currently listed at the Luxembourg Stock Exchange.

16. Dematerialization of Shares

Your Companys shares have been made available for dematerialization through the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

17. Fixed Deposits

The Company has not accepted any fixed deposits and the provisions of Section 58A of the Companies Act, 1956 are not applicable.

18. Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo

The details regarding Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo as required by section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the particulars in the report of the Board of Directors) Rules, 1988 are given in the Annexure 1 and forms part of this report.

19 Corporate Governance

A detailed report on Corporate Governance has been included separately in the Annual Report. A report on Management Discussion and Analysis prepared and attached to the Directors Report also forms part of this Annual Report.

20. Explanations to any qualifications in Auditors Report

The following are the adverse remarks in the Auditors Report dated 30.12.2009 and the Companys replies

21. Acknowledgements

The Board of Directors of the Company extends their sincere appreciation to the Government, Bankers, Financial Institutions and others for their kind support. On behalf of the Company the Board of Directors thank the employees for their valuable efforts and the shareholders for their undaunted faith in the Company

BY ORDER OF THE BOARD Y.S.CHOWDARY

PLACE : HYDERABAD CHAIRMAN

DATE: 30.01.2010



 
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