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Directors Report of Ortel Communications Ltd.

Mar 31, 2016

To the esteemed Members,

The Directors have pleasure in presenting their 21st Annual Report on the business and operations along with the Audited Accounts of your Company for the Financial Year ended March 31, 2016.

Financial Highlights

A summary of your Company’s financial performance is given below:

Rs. In Crores.

Particulars

2015-16

2014-15

Total Operating and other Revenue

196.29

161.12

Operating Expenses

126.00

102.20

Earnings Before Interest, Depreciation, Tax & Amortization (EBIDTA)

70.29

58.92

Interest and Financial Charges

23.56

22.45

Earnings before Depreciation, Tax & Amortization (EBDTA)

46.73

36.47

Depreciation, Amortization & other exceptional expenses

31.74

29.41

Earnings before Tax (EBT)

14.99

7.06

Tax

3.06

1.46

Earnings after tax (EAT)

11.93

5.60

State of Company’s affairs and Operational Results

The highlights of the Company’s performance are as under:

- Total revenue was Rs.196.29 Cr compared to the previous year’s total revenue of Rs.161.12 Cr.

- EBITDA stood at Rs.70.29 Crs compared to Rs.58.92 Cr of corresponding previous financial year.

- Earning before Tax (EBT) for the period was Rs. 14.99 Cr in compared to Rs.7.06 Cr of last fiscal.

- Earning after Tax (EAT) stood at Rs.11.93 Cr as compared to Rs.5.60 Cr of last fiscal.

- EPS stood at Rs.3.93 as compared to Rs.2.30 of last financial year.

The Financial Year 2015-16 has been another successful year

in terms of overall prospective. The Company has achieved better result in terms of Market expansion, Customer base as well as financial numbers.

Business/ Operational Review

The year 2015-16 has been a remarkable year for the Company as the Company has managed to expand aggressively not only in its existing markets but also in many new markets. In addition to the existing states of Odisha, Chhattisgarh, Andhra Pradesh and West Bengal, your company also started its Operations in two new states; Madhya Pradesh and Telangana. By way of proactive plans and aggressive buying out of local cable operators, the Company has been able to increase its operational locations to seventy (70) from Thirty nine (39) during the previous financial year and hope to add further going forward.

The contribution of each income stream to the total revenue is as below:-

Cable TV services

48 %

Data Services :

17 %

Infra-structure leasing

11 %

Carriage fees :

18 %

Others

6%.

Segment wise Analysis i) Cable TV Operation of the cable TV customer base has been digitized as on the end of year under review (previous Year: 22.7 %). We will continue to digitize the remaining analog subscriber base and also expand in select geographies to consolidate our presence further.

With internationally acceptable “Last Mile” model implemented by your Company and digitization of entire CATV subscribers, the Company is hopeful of remarkable growth in the revenue in the future.

Total Income, EBITDA, EBT and EAT for the period under review increased by 21.83%, 18.07%, 112.39% and 113.04% over Total Income, EBITDA, EBT and EAT of last financial year respectively.


During the year under review, your Company continued to be a dominant player in the Cable TV market in Odisha and has continued to consolidate its position in the states of Chhattisgarh and Andhra Pradesh.

Members will be happy to know that, your Company has expanded its operation in to the State of Madhya Pradesh and Telangana.

As on 31.03.2016, the total Cable TV customer base (Analog and Digital) has been increased to 628,710 (Previous Year: 471,592) which is a whopping 33% growth over previous year.

The Digital Subscriber base has grown by 117% to 233,012 as on 31st March 2016 (Previous year: 107,175). A total of 37.1 %

ii) Broadband Services Operation

In spite of stiff competition from national telecom players, your Company continued to be a significant Data service provider in its operational market.

Your Company has successfully implemented DOCSIS 3.0 high speed broadband service during the year under review and is currently offering data service up to a speed of 50 Mbps. The Company has also identified new markets as a part of expanding the Data operation and has planned to expand further in the coming financial year. Your Company is using HFC network architecture, which can easily be upgraded to FTTH topology in future. Your Company is currently undertaking trial run with FTTH for pure data usage. With the implementation of new technology, high speed data service and aggressive marketing strategy, the Company is well placed to cater to the growing demand.

The total Broadband subscriber base as on 31.03.2016 is 72,482 (Previous Year: 58,519), a growth of 23.86% over previous year''s subscriber base. As the Company is committed to expansion of network and development of data service, the Company is hopeful of increasing the growth trend of customer base in the coming years.

In total, your Company has achieved total RGU base (Analog, Digital and Data) of 701,192 during the year (previous year 530,111), a growth of 32.27 %. It is important to note here that in line with your Company’s philosophy of operating on "Last Mile Model", 92% company''s RGUs are on its own last mile network.

iii) Infrastructure leasing

Over last few years, your Company has aggressively pursued as another major revenue generating stream by leasing out its own infrastructure to corporate clients for their communication requirement and has leased out to various corporate a total of 1568.82 kms (Previous Year: 761.42kms) as on 31 March, 2016, a growth of 106% over the previous year.

Dividend

Though the Company has reported profits for the year, no dividend is being recommended due to accumulated losses for the past Financial Years.

Transfer to Reserves

As no dividend is proposed, so no amount is recommended to be transferred to General Reserve.

Share Capital

During the year under review, there were no change in the Share Capital of your Company.

Holding, Subsidiaries & Associates

Your Company does not have any holding, subsidiary or associate during the period under review.

Change in the Nature of Business, if any

During the year under review, there were no changes in the nature of the business of the Company.

Revision of financial statement

There was no revision of the financial statements for the year under review.

Extract of Annual Return

The extract of the Annual Return of your Company as on March 31, 2016 as provided under sub-section (3) of Section 92 of the Companies Act, 2013 in the Form MGT 9 is enclosed as ''Annexure-1'' forming part of this Report.

Statutory Auditors

M/s. Haribhakti & Co. LLP, Chartered Accountants Kolkata, were appointed as Statutory Auditors of your Company for a period of five years with effect from 19th Annual General Meeting till the conclusion of 24th Annual General Meeting of the Company subject to ratification of their appointment by the shareholders in the Annual General meeting of the Company every year, if eligible.

Now Board has recommended members for ratification of said appointment of M/s. Haribhakti & Co. LLP, Chartered Accountants, Kolkata, being eligible, as the Statutory Auditors of the Company at the ensuing Annual General Meeting.

Observations of the Auditors

Observations of the Auditors on the Annual Accounts of the Company forms part of "Auditors'' Report". The observations made in their report when read together with the relevant notes to the accounts are self-explanatory.

Secretarial Auditor

Pursuant to the provisions of Section 179 and 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Kumar Suresh & Associates, Gurgaon, a firm of Practicing Company Secretaries was appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Year 2015-16.

CS. Suresh Yadav, Secretarial Auditor has given the Secretarial Audit Report in Form No. MR-3 and the same has been annexed to the Board''s Report and marked as ''Annexure - 2''. There is no qualification in the Report of Secretarial Auditor which is self-explanatory.

Your Board has also appointed M/s. Kumar Suresh & Associates, Gurgaon, as Secretarial Auditor for FY 2016-17 who is eligible for such reappointment to conduct Secretarial Audit of your Company.

Cost Auditor

Terms of M/s. NIRAN & CO., Cost Accountants, Bhubaneswar, Odisha who were reappointed as Cost Auditor of the Company for Financial Year 2015-16 expired on 31 March, 2016.

Your Directors have approved their reappointment for FY 2016-17 and their remuneration shall be ratified by the members in the ensuing Annual General meeting.

Internal Auditor

Terms of M/s. SCM & Associates, Chartered Accountants, Bhubaneswar, Odisha who were reappointed as Internal Auditor of the Company for Financial Year 2015-16 expired on 31 March, 2016.

Your Directors have approved their reappointment for FY 2016-17.

Directors'' Responsibility Statement Yours Directors hereby certify

a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) that the directors had selected such accounting policies and applied them consistently and made judgment and estimates that they 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 the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and preventing and detecting fraud and other irregularities.

d) that the directors had prepared the annual accounts on a going concern basis.

e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Utilization of IPO Proceeds

Against Rs.100.79 Cr of IPO proceeds (net of issue expenses) Rs. 75.78 Cr was utilized for the object set out in the offer document and balance amount pending utilization was kept in the Bank and fixed deposit. There was no deviation in the utilization of issue proceeds during the year under review.

Particulars of loans, guarantees or investments under section 186

Your Company has not given any loans or guarantee or made any investments under Section 186 of the Companies Act, 2013.

Particulars of loans/ advances or investments outstanding during the financial year

Disclosure on particulars relating to loans, advances and investments outstanding during the financial year is disclosed in Note No. 4 of "Notes on Accounts" forming part of the financial statement of the Company.

Particulars of contracts or arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm''s length basis and were reviewed and approved by the Audit Committee and Board. During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Company''s Policy on Materiality of Related Party Transactions. All the transactions made on arm''s length basis are being reported in Form No. AOC - 2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 and is annexed as ''Annexure-3''.

The policy on dealing with Related Party Transactions can be viewed at http://www.ortelcom.com

Performance Evaluation of Board, Committees and Individual Directors including Managing Director

In compliance with the Companies Act, 2013, and Regulation 17 of the Listing Regulations, the performance evaluation of the Board, its Committees and individual Directors including Managing Director were carried out during the year under review.

Independent Directors in their separate meeting evaluated performance of Board as a whole, non-independent Director and Chairperson of the Board.

Further, based on the appraisal report of the individual Directors both for self and other Directors, Board carried out evaluation of Independent Directors, Managing Director and all its Committees.

The evaluation framework for assessing the performance of Directors were comprised of parameters such as; Attendance of Board and Committee Meetings, Contribution at meetings, Guidance/ support to Management, Relationship with Board and Committees, Degree of participation etc.

Risk Management

Risk management has always been an integral part of the corporate strategy which complements the organizational capabilities with business opportunities, robust planning and execution. The Company through a process of management mechanism covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation practice, manages the potential risks. A detailed regular exercise is being carried out to identify, evaluate, manage and monitor both business and non-business risks. A Risk Management Committee of the Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same.

Deposits

Your Company has not accepted any deposit from public during the period under review.

Declaration given by Independent Directors

All the Independent Directors have given declaration of their independence in terms of Section 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015.

Number of meetings of Board of Directors

For the Financial Year 2015-16, the Company held five (05) meetings of the Board of Directors, details of which form part of the Corporate Governance Report.

Material changes and commitments, if any

There were no significant material changes and commitments, affecting the financial position of the Company which has occurred between the end of the Financial Year of the Company to which the Financial Statement relate and the date of the report

Employee Stock Option Scheme

During the year under review, the Company has neither offered/granted nor allotted any new Stock Option either under ''Ortel Employee Stock Option Scheme, 2015'' ("ESOS 2015") or under old Scheme ESOS 2010. As per ESOS 2015, a Ortel Employee Welfare Trust (herein after referred as "Trust") was executed by the Company to acquire shares of the Company from Secondary market for transferring them to the eligible employees in future as per the direction of Nomination & Remuneration Committee of the Board. During the period under review, the Trust has acquired 3095 shares of the

Company. The details of disclosure form part of the Corporate Governance.

Directors and Key Managerial Personnel

Mr. Subhrakant Panda, Non-Executive Director of the Company is retiring at the ensuing Annual General Meeting. Your Directors have recommended his reappointment in the next AGM. The detailed resume of Mr. Panda who has offered for re-appointment is annexed to the notice of the Annual General Meeting.

There are no other changes in the constitutions of the Board of Directors and key managerial personnel.

Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future

No such significant and material order have been passed by any regulator/ court/ tribunal against the Company which will impact the going concern status and Company''s operation in future. In those matters which are pending before various regulators or courts or tribunal, your Company has strong reasons to succeed in all the said disputed matters.

Particulars of Employees

Information as per section 197 and Rule 5(1) & 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rule, 2014 is provided as ''Annexure-4''.

Corporate Governance

Pursuant to SEBI Listing Regulations, a report on the Corporate Governance, Management Discussion and Analysis, Certificate regarding Compliance of conditions of Corporate Governance and Certificate by CEO & CFO have been made part of the Annual Report as Annexure.

Conservation of energy, technology, foreign exchange earnings and outgo

The Company is a Multi System Operator (MSO) and is carrying on business of, inter alia, providing cable TV and broadband service along with other value added services. Since this does not involve any manufacturing activity, most of the Information required to be provided under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are nil / not applicable.

Further, your Company, being a service provider, requires minimal energy consumption and Company takes all possible measures to ensure optimal use of energy, avoid wastages and conserve energy as far as possible. Following are the energy conservation measures being taken by Company over a period of time to ensure minimum energy consumption and technology absorption.

Foreign Exchange Earnings & Outgo

Conservation of Energy:

1. The steps taken or impact or conservation of energy.

2. The steps taken by the Company for utilizing alternate sources of energy.

3. The capital investment on energy conservation equipment.

- Conservation of RF, Optical, Electrical and fuel energy is being accomplished by your company in economically responsible and beneficial ways by using power efficient equipment, broadband HFC network, provisioning system, ergonomics in the cable layout, cleanest and state of art technologies.

- Increasing more deeper fiber by using Broadband HFC network in star structure has resulted less power consumption.

- Applying the strongest feasible energy efficiency standards to network onto electronics, RF products and signal quality.

Technology Absorption:

1. The efforts made towards technology absorption.

2. The benefits derived like product improvement, cost reduction, product development or import substitution.

3. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):-

a. the details of technology imported;

b. the year of import;

c. whether the technology been fully absorbed;

d. if not fully absorbed, areas where absorption has not taken place, and the reasons thereof;

e. The expenditure incurred on Research and Development

- Your Company is one of the MSOs in India which has started Triple Play services over Broadband HFC network. It has chosen best, economical and state of art technologies.

- Your Company uses Cable Modem technology for high speed Internet access. The Company is also using Metro Ethernet (“MEN”) and Ethernet over Cable (EoC) technology which engages different network topology for providing high speed data service at a lower cost.

- Your Company has also adopted digital video technology to deliver qualitative video and audio using MPEG-2 and MPEG-4 Technology. Your Company has also started HD TV services and offers HD channels to its subscribers in select markets.

- Your Company has also introduced high speed broadband technologies such as DOCSIS 3.0 to cater to subscribers who have increased Video led Internet Consumption. HD video content viewings as well as increased download speeds are the main benefits of DOCSIS 3.0 technology. DOCSIS 3.0 allows for a much higher through put compared to the earlier versions by using multi-channel bonding simultaneously for download/upload. This technology has been widely used in Europe and USA by leading ISPs.

- Your Company is also using HFC architecture, which can easily be converted or upgraded to FTTH. Your Company is currently undertaking trial with FTTH for pure data usage.

Details of foreign exchange earnings and outgo are disclosed in Notes No. 33 to 35 of “Notes on Accounts” forming part of the financial statement of the Company.

Certifications

Your Company has been certified and recertified by Bureau Veritas Certification (India) Pvt. Ltd. (BVQI) to confirm with ISO 9001:2008 standardization for both cable and data services for Bhubaneswar, Cuttack, Rourkela and Sambalpur operational sites.

Your Company has also received certification from BECIL (TRAI appointed Certifying Agency) for its digital Encryption and Subscriber Management System of digital services.

Your Company is the first of its kind in India to receive such certification.

Corporate Social Responsibility

Being a responsible Corporate Citizen, your company is committed to contribute towards social wellbeing of the communities through various corporate social responsibility (“CSR”) initiatives and has been undertaking various social works as part of its CSR over a period of time. It invests in Social programs for the under privileged girl child, contributes towards their overall learning and personal growth, opens employment avenues and also it attempts to bring about significant and sustainable improvements in their standard of living. Your Company’s flagship CSR activity known as ‘Ortel

Dayitwa’ provides financial support to girl children for college education. Ortel Dayitwa encourages girls to pursue education after secondary education with an objective to reduce dropouts after secondary education and also conducts various education awareness programs from time to time.

After mandatory applicability of provisions of Section 135 of the Companies Act, 2013 to the Company in FY. 2015-16, the Company has constituted a Corporate Social Responsibility Committee of the Board (“CSR Committee”).

The Board of Directors of the Company has approved CSR Policy based on the recommendation of the CSR Committee. The CSR Policy of the Company is available on the Company’s web-site and can be accessed in the link www.ortelcom.com

Though as per the criteria specified under Section 135 of the Companies Act, 2013 (“Act”), the Company was not required to mandatorily contribute towards CSR activities, but your Company has contributed Rs.1,00,000/- towards education of poor and under privileged girl child through ‘Ortel Dayitwa’ Charitable Trust. As required under Section 134 of the Act and Companies (Corporate Social Responsibility Policy) Rules,

2014, statement containing the details of CSR expenditure is disclosed as ‘Annexure -5’.

The Company continues and shall continue to contribute towards social well being in future.

Internal Financial Control

The Company has a well-placed, proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

The Board of Directors has appointed M/s. SCM & Associates, Chartered Accountants as the Internal Auditor of the Company. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Auditors to the Audit Committee of the Board. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Internal Auditors findings are discussed at quarterly basis and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

The Company has also its own internal audit department commensurate with the size of the Company. Internal Audit team under the guidance of Head of Internal Audit conduct various check and audit and submit their report to the management and is responsible for ensuring adequacy of internal control both in terms of financial and operational control.

Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy which aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2015-16.

Personnel & Industrial Relations

Personnel & industrial relations during the year were cordial & harmonious.

Acknowledgement

Your Directors place on record their sincere appreciation for the continued support from shareholders, customers, suppliers, government authorities, banks and financial institutions and other business associates. A particular note of thanks to all employees of your Company, without whose contribution, your Company could not have achieved the year’s results.

On behalf of the Board of Directors

For Ortel Communications Ltd

Sd/- Sd/-

Jagi Mangat Panda Jyoti Bhusan Pany

Managing Director Director

Place: Bhubaneswar

Date: 30 April, 2016


Mar 31, 2015

Dear Members,

We, on behalf of the Board of Directors of your company, take plea- sure in presenting before you the 20th Annual Report on the business and operations of your Company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2015.

1. Financial Highlights

A summary of your Company's financial performance is given below:

(Rs. in Crore)

Particulars Year ending Year ending 31 March 31 March 2015 2014

Total Operating and other Income 161.12 132.62

Operating Expenses 102.07 89.92

Earnings before Interest,Depreciation, 59.05 42.70

Tax & Amortization (EBIDTA)

Interest and Financial Charges 22.59 23.42

Foreign Exchange Fluctuation - 1.18

Earnings before Depreciation, 36.46 18.10

Tax & Amortization (EBDTA)

Depreciation, Amortization & other 29.41 27.71

exceptional expenses.

Earning before Tax (EBT) 7.06 (13.93)

Tax 1.46 (13.78)

Earning after tax (EAT) 5.60 (13.78)

2. State of Company's affairs and Operational Results.

The highlights of the Company's performance are as under:

* Total Income increased by 21% to Rs. 1,61.12 cr from Rs. 1,32.62 cr of last financial year.

* EBITDA grew by 44%o to Rs. 59.05 Crs from Rs. 42.70 cr of last financial year

* EBITDA margins stood at 37%o in FY15 as compared to 31%o in FY14.,

* Profit After Tax stood at Rs. 5.60 cr as compared to a Loss of Rs. 13.8 cr of last fiscal

* EPS amounted to Rs. 2.30 as compared to negative EPS of Rs. 6.5 of last financial year.

The Financial year 2014-15 has been a very successful and remarkable year as the Company has achieved EAT positive after a continuous loss for six years. The overall performance of the Company both in terms of Turnover and Earning after tax has significantly improved for the period under review due to over all growth of cable TV, Data, carriage fee and infrastructure leasing income.

The contribution of each income stream to the total revenue is as below:-

Cable TV services has contributed 51 % to the total revenue during the year 2014-15. Data Services has attributed 18 % to the total revenue of the Company for the year. Infra-structure leasing has contributed 9% where as Carriage fees and other incomes have shared 16 % and 6 % respectively to the total revenue for FY. 2014-15.

During the year, Andhra Pradesh has turned EBIDTA positive and West Bengal is expected to be positive EBITDA in FY.2015-16. The company has also taken several initiatives in Chhattisgarh to reduce losses and we expect a marked improvement in EBIDTA performance in Chhattisgarh in the year 2015-16.

Review of Operations

ii) Cable TV Operation:

During the year under review, your company continued to be a dominant player in the Cable TV market in Odisha and has continued to consolidate its position in the other emerging markets too where operations were launched in last few years (Chhattisgarh, Andhra Pradesh & West Bengal). The total Cable TV customer base (Analog and Digital) has been increased to 471,592 (Previous Year: 461,408 ) as on 31.03.2015.

With digitalization mandated by the Government of India for mandatory digitization of cable TV signal across India, your company has already started converting more subscribers to digital cable tv platform. As your Company's distribution network is 100% digitally ready and possess the capability to further digitize customers already in analog platform, your company is contemplating to complete the same in its major markets ahead of timelines announced by the government. Further by deploying funds raised in IPO which has been allocated for network expansion and development of digital cable services, the Company is expecting to improve substantial Subscriber Base and revenue in FY 2015-16 and your company is taking aggressive steps in this direction.

ii) Data Operation:

During the year under review, your company continued to be a significant Data Services provider in the market it operates in spite of severe competition from wireless service providers notably the national telecom companies. The total subscriber base as on 31.03.2015 is 58,519 (Previous Year: 54,427). Though the growth in subscriber numbers during the year has been tough owing to lack of capital, but with better quality services, improved customer care and with aggressive marketing campaign plan and by deploying IPO proceeds set aside for expansion of network and development of data service, the Company is hopeful of increasing the growth trend of customer base in the coming years.

Further, the Company is in the process of upgrading present technologies of DOCSIS 2.0 standard used in cable modem for providing data services to DOCSIS 3.0 which once implemented will enable provision of broadband services at a higher speed which will result in more customer base and better service to the customers.

In total, your company has achieved total RGU base of 530,111 during the year (previous year 515,835), out of which 88 % are on its own last mile network.

Your Company also provides high bandwidth dedicated leased line service to various corporate subscribers. As on 31 March, 2015, your Company has provided 784.50 Mbps (Previous year 718.50 Mbps) bandwidth to various corporate customers, a 9.18% growth over previous year.

iii) Infrastructure leasing:

During the year, the Company has aggressively pursued as another major revenue generating stream by leasing out its own infrastructure to corporate clients for their communication requirement and has leased out to various corporates a total of 761.42 kms as on 31 March, 2015. With rapid industrialization in our target market, Company expects continued growth from providing these services.

3. Dividend

Though the Company has reported profits for the year, no dividend is being recommended due to accumulated losses for the past Financial Years.

4. Particulars of Employees

Information as per section rule 5 (2) of Companies (Appointment & Remuneration of Managerial Personnel) Rule, 2014 read with Compa- nies (Particulars of Employees) Rules, 1975, is not applicable.

5. Observations of the Auditors

Observations of the Auditors on the Annual Accounts of the Company are annexed as part of "Auditors' Report". The observations made in their report have been dealt elsewhere within the Notes to the Ac- counts which are self-explanatory.

6. Directors' Responsibility Statement

Yours Directors hereby certify:-

a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper expla- nation relating to material departures.

b) that the directors had selected such accounting policies and ap- plied them consistently and made judgment and estimates that they 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 the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and preventing and detecting fraud and other irregularities.

d) that the directors had prepared the annual accounts on a going concern basis.

e) The directors had laid down internal financial controls to be fol- lowed by the company and that such internal financial controls are adequate and were operating effectively.

f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

IPO

Your Board is pleased to inform you all that, the Company has success- fully completed the Initial Public Offer (IPO) of the Company and got listed on both National Stock Exchanges of India Limited (NSE), being the designated Stock Excahnge and BSE Limited (BSE) on 19 March, 2015. The issue was open for subscription on 03 March 2015 and closed on 05 March 2015. Out of 1200 lakh shares issued for subscrip- tion, 96,52, 500 shares including offer for sale by the selling share holder, NSR PE Mauritius, LLC was subscribed by the investors at a price band of Rs. 181-200 per share. The final price per share was finalized as Rs. 181/- per share by IPO Committee of the Board. After final rejection of the applications for various reasons out of 96,52,500 shares subscribed by public, 95,93,850 Nos of total shares consisting of 60,00,000 nos. of fresh shares and 35,93,850 nos shares out of offer for sale (OFS) were allotted based on the basis of allotment approved by NSE (Designated Stock Exchange) and also IPO Commit- tee on 12 March, 2015. Further,Company got final listing permission of both BSE and NSE on 17March, 2015 and trading has been started w.e.f. 19 March, 2015.

8. Directors and Key Managerial Personnel.

During the year under review, Mr. Shantanu Yeshwant Nalavadi, the Nominee Director from NSR-PE Mauritius, LLC (NSR) has resigned from the Board w.e.f. 20 March, 2015 in compliance with the termination agreement executed between Company and NSR on 14 February, 2015 and the corresponding disclosure in the Prospectus as per SEBI (ICD) Regulation for IPO. The Board expressed its sincere thanks to Mr. Nalavadi for long standing association with the Company and guiding the Company for its success.

Further, Dr. Gautam Sehgal, Non-Executive Director of the Company is retiring at the ensuing Annual General Meeting. Your Directors have recommended his reappointment as Independent Director in the next AGM. The detailed resume of Dr. Sehgal who has offered for re-appointment is provided in the explanatory statement annexed to the notice of the Annual General Meeting.Further, Company has complied with the requirement of new Companies Act, 2013 relating to appoint ment of independent Directors and key managerial personnel. There are no other changes in the constitutions of the Board of Directors and key managerial personnel.

The Company has obtained declaration from Independent Directors as required under Section 149 of the Companies Act, 2013.

9. Share Capital

During the year under review, the Company had allotted 1,44,97,774 nos of 0.001% compulsorily convertible preference shares which got converted into 10,35,555 nos of equity shares.

During the same period, the Company has also allotted 35,500 equity shares under Employee Stock Option Scheme (ESOS 2010).

Further, as you know, during the year under review, the Company has allotted 60,00,000 nos of equity shares on 12 March, 2015 pursuant to the Initial Public Offer (IPO) of the Company under book building process.

10. Auditors:

a) Statutory Auditors

M/s. Haribhakti and Co. LLP, Chartered Accountants Kolkata, was ap- pointed as Statutory Auditors of the Company at the last Annual General Meeting for a period of five years subject to ratification of their appointment by the shareholders in the Annual General meeting of the Company every year if eligible.

Your Directors have recommended M/s. Haribhakti and Co. LLP, Char- tered Accountants Kolkata, being eligible, for ratification by the mem- bers of the Company in the next Annual General Meeting.

b) Cost Auditor

Terms of M/s. NIRAN & CO., Cost Accountants, Bhubaneswar, Odisha who was reappointed as Cost Auditor of the Company for Financial Year 2014-15 expired on 31 March, 2015.

Your Directors have approved their reappointment for FY. 2015-16 and their remuneration shall be ratified by the members in the ensuing Annual General Meeting.

c) Internal Auditor

Terms of M/s. SCM & Associates, Chartered Accountants, Bhubaneswar, Odisha who was reappointed as Internal Auditor of the Company for Financial Year 2014-15 expired on 31 March, 2015.

Your Directors have approved their reappointment.

d) Secretarial Auditor

Your Board has also appointed M/s. Kumar Suresh & Associates, Gurgaon, a firm of Practicing Company Secretaries as Secretarial Audi- tor for FY 2015-16.

11. Public Deposits

During the period under review, your company has not taken any public deposit.

12. Corporate Governance:

Pursuant to clause 49 of the Listing agreement, a report on the corporate governance, Management Discussion and Analysis, Certificate regarding Compliance of conditions of Corporate Governance, Secre- tarial Audit Report and Managing Director & CFO certification have been made part of the Annual Report

13. Conservation of Energy, technology, foreign exchange earnings and outgo

13.1 Conservation of energy

Conservation of RF ,Optical, Electrical and fuel energy is being accomplished by your company in economically responsible and beneficial ways by using power efficient equipment, broadband HFC network, provisioning system, ergonomics in the cable layout, cleanest and state of art technologies. Recent salient steps that are taken towards these methods in improving Conservation of Energy in efficient manner in your company are as under Increasing more deeper fiber by using Broadband HFC network in star structure has resulted less power consumption. Applying the strongest feasible energy efficiency standards to network opto electronics, RF products and signal quality.

13.2. Technology

Your company is one of the MSOs in India which has started Triple lay services over Broadband HFC network. It has chosen best, economical and state of art technologies.

Your company is using Cable Modem technology for high speed Internet access. The Company is also using Metro Ethernet ("MEN") and Ethernet over Cable (EoC) technology which engages different network topology for providing high speed data service at a lower cost.

Your company has adopted digital video technology to deliver qualita- tive video and audio using MPEG-2 and MPEG-4 Technology. Your com- pany has also started HD TV services and offers HD channels to its subscribers in select markets.

Further, your company deployed Home Wireless Cable modems in the market and also conducted trials of Voice over Internet Protocol.

We have completed Trials and running pilot projects on other new technologies such as DOCSIS 3.0 Cable Modem and expect commer- cial deployment soon.

13.3. Foreign Exchange Earnings & Outgo

Disclosure of foreign exchange earnings and outgo as required under Rule 2(C) is given in Note No. 38 "Notes on Accounts" forming part of the Audited Annual Accounts.

Foreign Exchange Earning: Nil

Foreign Exchange Outgo : Rs. 1607.67 lakhs.

14. Certifications

Your company has been certified and recertified by Bureau Veritas Certification (India) Pvt. Ltd. (BVQI) to confirm with ISO 9001:2008 standardization for both cable and data services for Bhubaneswar, Cuttack, Rourkella and Sambalpur operational sites.

Your company has also received certification from BECIL (TRAI ap pointed Certifying Agency) for its digital Encryption and Subscriber Management System of digital services. Your company is the first of its kind in India to receive such certification.

15. Corporate Social Responsibility:

Your company has undertaken various social works as part of corporate social responsibility. It invests in Social programs for the underprivileged girl child, contributes towards their overall learning and personal growth, opens employment avenues and also it attempts to bring about significant and sustainable improvements in their standard of living. Your company's flagship CSR activity known as 'Ortel Dayitwa' provides financial support to girl children for college education. Ortel Dayitwa encourages girls to pursue education after secondary education with an objective to reduce dropouts after secondary education and also conducts various education awareness programs from time to time.

Further, as a part of its CSR initiatives, Ortel Dayitwa has tied up with "Gram Tarang Employibility Training Services Pvt. Ltd. a social enterpreneurial outreach of Centurion University, Odisha" in partnership with National Skill Developement Corporation to promote and provide vocational education to underprivileged youth therby providing employment after successfull completion of training and to encourage students to pursue higher education through University diploma/ degree programs.

The Company continues and shall continue to contribute towards social well being in future.

Further, as Company has made net profit of Rs. 5.59 Cr in FY 14-15, Section 135 of the Companies Act, 2013 and Listing agreement of the Stock Exchanges has become applicable which specifies constitution of a Corporate Social Responsibility Committee of the Board ("CSR Committee"). Accordingly, the Company will constitute ("CSR Committee") in F.Y. 2015-16.

16. Personnel & Industrial Relations

Personnel & industrial relations during the year were cordial & harmo- nious.

17. Acknowledgement

Your Directors place on record their sincere appreciation for the contin- ued support from share holders, customers, suppliers, government authorities, banks and financial institutions and other business associ- ates. A particular note of thanks to all employees of your company, without whose contribution, your company could not have achieved the year's results.

On behalf of the Board of Directors For Ortel Communications Ltd

Jagi Mangat Panda Jyoti Bhusan Pany Managing Director Director

Place: Bhubaneswar Date: 20 April, 2015