Directors Report of Shyam Telecom Ltd.

Mar 31, 2016

DIRECTORS'' REPORT

Dear Members,

The Directors have pleasure in presenting their Twenty Third Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016.

FINANCIAL SUMMARY

The Company''s financial performance for the year under review alongwith previous year figures are given hereunder:

FINANCIAL PERFORMANCE

(Rupees in Lacs)

PARTICULARS	Financial Year 2015-2016	Financial Year 2014-2015
Sales and Services	24,416.40	33,653.35
Loss before Tax	842.08	1,501.84
Exceptional Items	-	2,199.66
Loss Before Tax	842.08	3,701.50
Provisions for Income Tax
- Current tax	-	-
- Deferred tax	(0.17)	(104.15)
Income tax/ Deferred Tax for earlier year	(42.59)	4.51
Loss After Tax	799.32	3,601.86

OVERVIEW OF COMPANY''S FINANCIAL PERFORMANCE

During the year under review your company has on standalone basis registered a turnover of 24,416 Lacs. A net loss of 799 Lacs has been made during this year as compared to net loss of 3,601 Lacs in the previous year. The year to year decrease in the turnover is 27.45%. The losses incurred are due to lower turnover causing insufficient margins to service the fixed costs.

The Company has been the National Distributor and Service Provider of Sistema Shyam Teleservices (Sistema) and were earning revenues since January 2014. But Sistema is under a Scheme of Arrangement demerging and vesting its Telecom business segment as Transferred Undertaking by rolling out spectrum licenses and related infrastructure to Reliance group, the contract of services and telecom products with your company have been withdrawn in view thereof. Your company is exploring other avenues for business with other operators and other ancillary Industry operators.

No other material changes and commitments affecting the financial position of the Company has occurred between April 1, 2016 and the date of signing of this Report.

DIVIDEND

No Dividend was declared for the current financial year due to consistent losses incurred by the Company.

TELECOM INDUSTRY IN INDIA

India is currently the world''s second-largest telecommunications market and has registered strong growth in the past decade and half. The Indian mobile economy is growing rapidly and will contribute substantially to India''s Gross Domestic Product (GDP), The liberal and reformist policies of the Government of India have been instrumental along with strong consumer demand in the rapid growth in the Indian telecom sector. The government has enabled easy market access to telecom equipment and a fair and proactive regulatory framework that has ensured availability of telecom services to consumer at affordable prices. The deregulation of foreign direct investment (FDI) norms has made the sector one of the fastest growing and a top five employment opportunity generator in the country.

MARKET SIZE

Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India is expected to touch US$ 37 billion in 2017, registering a Compound Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017.

According to a study by GSMA, smart phones are expected to account for two out of every three mobile connections globally by 2020 making India the fourth largest Smartphone market. The broadband services user-base in India is expected to grow to 250 million connections by 2017, It is expected that India to overtake US as the second-largest Smartphone market globally by 2017 and to maintain high growth rate over the next few years as people switch to smart phones and gradually upgrade to 4G.

The Indian telecom sector is expected to generate four million direct and indirect jobs over the next five years. The employment opportunities are expected to be created due to combination of government''s efforts to increase penetration in rural areas and the rapid increase in Smartphone sales and rising internet usage.

GOVERNMENT INITIATIVES

The government has fast-tracked reforms in the telecom sector and continues to be proactive in providing room for growth for telecom companies. Some of the other major initiatives taken by the government are as follows:

- The Telecom Regulatory Authority of India (TRAI) has directed the telecom companies or mobile operators to compensate the consumers in the event of dropped calls with a view to reduce the increasing number of dropped calls.

- With a view to encourage consolidation in the telecom sector, the Government of India has approved the rules for spectrum trading that will allow telecom companies to buy and sell rights to unused spectrum among themselves. The guidelines on spectrum sharing, aimed to improve spectral efficiency and quality of service, based on the recommendations of the Telecom Regulatory Authority of India (TRAI) has also been approved.

- The Central Government''s several initiatives to promote manufacturing in the country, such as ''Make in India'' campaign appears to have had a positive impact on mobile handsets manufacturing in the country. Companies like Samsung, Micromax and Spice had been assembling handsets in the country already. Xiaomi and Motorola, along with Lenovo have also started assembly of smart phones in India. Firms like HTC, Asus and Gionee too have shown interest in setting up a manufacturing base in the country.

- The Government of India plans to roll out free high-speed Wi-Fi in 2,500 cities and towns across the country over the next three years. The program entails an investment of up to Rs 7,000 crore (US$ 1.06 billion) and will be implemented soon.

ROAD AHEAD

India will emerge as a leading player in the virtual world by having 700 million internet users of the 4.7 billion global users by 2025. With the government''s favorable regulation policies and 4G services hitting the market, the Indian telecommunication sector is expected to witness fast growth in the next few years.

SUBSIDIARY COMPANY

The Company had only one foreign subsidiary of the Company i.e. Shyam Telecom Inc incorporated under the laws of State of Delaware has been dissolved due to its non viability, regular losses and lack of orders in US markets. The dissolution has been made effective from 22^ndDecember, 2015. Hence the consolidated Accounts have not been prepared and annexed as subsidiary has no assets.

PUBLIC DEPOSIT

During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS AND KEY MANAGERIAL PERSONS

In accordance with the provisions of section 152 of the Companies Act, 2013 and Article of Association of the company, Mr. Alok Tandon, Director of the company, retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. His brief profile has been stated in the Corporate Governance Report.

Your directors recommend his re-appointment. All the directors of the Company have confirmed that they are not disqualified from staying on the Board of directors in terms of Section 164(2) of the Companies Act, 2013.

The Company has received declaration from all the Independent directors, they meet the criteria of Independence as prescribed both under the Companies Act, 2013 and Sebi(Listing Obligations and Disclosure Requirements) Regulation, 2015.

FORMAL ANNUAL EVALUATION

Your Company in the meeting of its Board held on 8th February 2016, discussed and evaluated the performance of the Board.

Pursuant to the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Board Committees. A structured questionnaire was prepared after circulating the drafts forms, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was done by the entire Board excluding the Directors being evaluated. The performance evaluation of the Chairman, Board as a whole and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

FAMILIARISATION PROGRAMME MODULE

The Familiarization Program Module for Independent Directors of the Company has been adopted by the Board of Directors. The Independent Directors were intimated and informed about the operational, financial, legal and secretarial aspects of the company. The familiarization programme has been posted on the Company''s website.

VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has established a vigil mechanism programme for overseeing the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of the employees.

Your company believes in the conduct of the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. To develop a culture where it is safe for all Directors and Employees to raise genuine concerns or grievances the company established vigil mechanism for Directors and Employees in pursuance of Regulation 22 of Sebi (LODR) 2015 and Section 177(9) of the Companies Act, 2013 and Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 (posted on companies website).

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has adopted under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 a policy for prevention of Sexual Harassment of

Women at workplace and has set up Committee for implementation of said policy. Details of constitution of the committee forms part of the policy and have been posted on the website of the Company (www.shya.mtelecom.com). During the year Company has not received any complaint of harassment.

RISK MANAGEMENT POLICY

As per the requirements of Regulation 21 of Sebi (LODR) 2015, your Company has constituted a Risk Management Committee to oversee the risk management efforts in the Company under the Chairmanship of Mr. N. Kumbhat, Independent Director. The details of the Committee along with its charter are set out in the Corporate Governance Report forming part of this Report.

The Company has adopted the procedures in its Risk Management policy concerning the development and implementation of a Risk Management after identifying the elements of risks which in the opinion of the Board may threaten the very existence of the Company itself.

To ensure that all current and future material risk exposure of company is identified and mitigated the company has formulated Risk Management Policy. The policy explains the risk pertaining to financing activities, dependence on distribution network, and their mitigation. The policy is available on the company website (www.shyamtelecom.com) and can be read from there.

RISK FACTORS & MITIGATION

The risks associated with the Company were mostly related to expansion/modernization plan along with utilizing distribution network with current financing activities. The Company is trying to create more avenues for sale of handsets to various other buyers. The company also follows conservative finance and accounting policy and keeps regular check on various financial health parameter. Every quarter the risk analysis is reviewed by the Board of Directors.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provision of section I34(3)(c) of the Companies Act, 2013, your directors confirm that::

i) In the preparation of the Annual Accounts for the year ended 31^st March 2016, the applicable Accounting Standards had been followed and there are no material departure from the same.

ii) the Directors 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 the affairs of the company at the end of financial year 2015-2016 and of the profit/ loss of the company for the year ended as on that date;

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in the accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) Annual accounts have been prepared on a going concern basis.

v) the directors had laid down internal financial controls which are followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) Proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

AUDITORS

In the Annual General Meeting held on 30.09.2014, M/s Mehra Goel & Company, Chartered Accountants, were appointed as Statutory Auditors to hold office till the conclusion of 24th AGM, to be held for the financial year ending 2017. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting through ratification. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

AUDITORS REPORT

The Auditor''s Report presented by M/s. Mehra Goel & Company, Chartered Accountants, the Statutory Auditors on the accounts of the Company for the financial year ended 31st March, 2016 is unqualified.

COST AUDITOR

Your Board in view of cessation of manufacturing activity of the company resolved and noted the non- applicability of Cost Audit provisions of the company and hence decided not to recommend the appointment of cost auditor for the financial year 2016-2017. The contribution and enlightening experience with M/s K G Goel & Associate, Cost Accountants was appreciated.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s A.N. Kukreja, Practicing Company Secretary to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure - I" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as "Annexure - II" to this Report.

RELATED PARTY TRANSACTIONS

The details of the related party transactions as required under Accounting Standard - 18 are set out in Notes to the standalone financial statements forming part of this Annual Report. The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as "Annexure-III" to this Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has set up CSR committee to facilitate its CSR related operations. The company made various donations during the year.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Our Company has put in place adequate internal financial controls with reference to the financial statements. A note on the same has been provided in the Management Discussion and Analysis Report.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, as required under section 134 (3) (m) of the Companies Act, 2013 read with the Rule8 of The Companies (Accounts) Rules, 2014 , is enclosed as Annexure - IV and forms part of this Report.

PARTICULARS OF EMPLOYEES

The disclosure of remuneration of Directors is in compliance with Section 197(12) in accordance with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Section 134 of the 2013 Act.

INDUSTRIAL RELATIONS

The Company remains regularly in touch with each employee for the redressal of their grievances and maintains high quality standards for them. The industrial relations of your Company are normal.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

In accordance with Section I78 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued there under and Regulation 19 of Sebi (LODR) 2015, the Company is having Nomination and Remuneration Policy framed on the recommendations of the Nomination and Remuneration Committee for determining qualifications, positive attributes, independence of a director etc.

The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report.

The Managing Director and CEO of your Company does not receive remuneration from the subsidiary of your Company.

The information required under Section I97 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/employees of your Company is provided in this Report as "Annexure - V".

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The company has proper composition of the Board and has following KMP''s

Mr. Ajay Khanna - Managing Director

Mr. Gursharan Singh - CEO Mr.Vinod Raina - CFO

Mr. Dharmender Dhingra - Company Secretary & Compliance Officer

NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of the number of Board and Audit Committee meetings of your company are set out in the Corporate Governance Report which forms part of this Report.

CORPORATE GOVERNANCE

In compliance with the provisions of Sebi(Lodr) Regulation 2015 a separate report on Corporate Governance along with a certificate from the Auditors on its compliance forms an integral part of this Report.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(5) of Companies Act, 2013 read with the Schedules and Rules issued there under as well as Sebi(Lodr) Regulation 2015.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis as stipulated under Sebi(Lodr) Regulation 2015, as applicable, forms the part of this report as Annexure - VI.

CONSOLIDATED FINANCIAL STATEMENT

Shyam Telecom Inc. (Corporation) was a subsidiary of Shyam Telecom Limited (STL) an Indian company. The stockholders had authorized the Dissolution of the corporation by unanimous consent on 22 December 2015. The corporation has been Dissolved as per the Certificate of Dissolution issued by the State of Delaware (USA) pursuant to Section 275 and 391 (a) (b) (c). The said Corporation had no assets and ceased to transact business as of 22 December 2015. In View of above as on 31-3-2016 there was no subsidiary, the consolidation of accounts has not been done.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Loans, guarantees and investment covered under Sec 186 of the Companies Act, 2013 forms part of the notes to the financial statements provided in this Annual Report.

COMPOSITION OF AUDIT COMMITTEE

Disclosure pursuant to the provisions of section 177 of the Companies Act, 2013, the Audit & Finance Committee of the company consists of:

Mr. Achintya Karati - Independent Director & Chairman

Mr. Vinod Juneja - Independent Director & Member

Mr. C.S.Malhotra - Independent Director & Member

Mr. Narendra Kumbhat - Independent Director & Member

Mr. Arun Khanna - Non Executive Director & Member

Mr. Dharmender Dhingra - Company Secretary & Vice President (Legal)

ACKNOWLEDGEMENT

The Board wishes to place on records its-sincere appreciation for the continued assistance and support extended to the Company by its Bankers, Vendors, Government Authorities and Employees.

Your directors acknowledge with gratitude the encouragement and support extended by our valued Shareholders.

On Behalf of the Board of Directors of

SHYAM TELECOM LIMITED

Sd/- Sd/-

AJAY KHANNA ALOK TANDON

Managing Director Director

PLACE: NEW DELHI

DATE: 9^th August, 2016

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Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their Twenty Second Annual Report on the business and operations of the Company and the accounts for the financial year ended March 31st, 2015.

FINANCIAL SUMMARY OF THE COMPANY

The Company's financial performance for the year under review alongwith previous year figures are given hereunder:

FINANCIAL PERFORMANCE

(Rupees in Lacs)

Financial Financial PARTICULARS Year Year

2014-2015 2013-2014

Sales and Services 33,653.35 34,915.41

Loss before Tax and 1,501.84 142.54

Exceptional Items

Exceptional Items 2199.66 -

Loss Before Tax 3701.50 142.54

Provisions for Income Tax

- Current tax - 42.50

- Deferred tax (104.15) (61.57)

Income tax/ Deferred 4.51 11.46

Ta x for earlier year

Loss After Tax 3601.86 134.93

OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE

During the year under review your Company has on standalone basis registered a turnover of Rs. 33653.35 Lacs. A net loss of Rs. 3601.86 Lacs has been made during this year as compared to net loss of Rs 134.93 Lacs in the previous year. The year to year decrease in the turnover is 3.61%. The increase in the net loss is due to reduction in turnover. The amounts of continuing and dis-continued operation of the Company have been considered.

On a consolidated basis, your Company achieved revenue of Rs. 33665.45 lacs in this year as against Rs. 35196.09 lacs in the previous year. A net loss of Rs. 2740.38 Lacs has been made during this year as compared to net loss of Rs 198.94 Lacs in the previous year.

Another factor for increase in losses is attributed to the exceptional items. The Company has made provision for writing

off loans and advances given to the subsidiary Company. Additionally provision has also been made for diminution in the value of investments.

No other material changes and commitments affecting the financial position of the Company has occurred between April 1, 2015 and the date of signing of this Report.

DIVIDEND

No Dividend was declared for the current financial year due to consistent losses incurred by the Company.

TELECOM INDUSTRY IN INDIA

AN OVERVIEW

In today's information age, the telecommunication industry has a vital role to play. It is considered as the backbone of industrial and economic development. The industry has been aiding delivery of voice and services at rapidly increasing speeds, and thus has been revolutionizing human connection.

Telecom Industry in 2014-2015 was in the value destructing phase based on hyper competition. Outside of the US, Indians became the biggest followers of Facebook, Whatsapp and Twitter and specifically on mobile. Indian enterprises and SMEs are adopting cloud-based services to increase the quality and reach of their offerings. E-tailors became the first large business segment to exploit consumer analytics. Telecom services have been acknowledged globally as an essential tool for the socio- economic development of a nation. India is currently the world's second-largest telecommunications market and has registered exceptional growth in the past few years.

MARKET SIZE

Snapshot

Description Numbers*

Total no. of phone subscriptions 1 billion

Mobiles 974 million

Landlines 26 million

Total no. of PCs 100 million

Internet users 300 million

Mobile internet Users 180 million

Sharing of fixed line internet 2-4 users

connection

Broadband 100 million (wired

16 million; wireless: 84 million)**

* The data stands as on March 2015

**Govt now defines broadband as 512 KBPS

Information about Mobiles – Users and Technology

Total duration of phone calls 17 bn mins made every day

No. of text msgs sent every day 1.7 bn on average

Average number of minutes 47.6 spent per day on smartphones

Share of users accessing social 56% media via mobiles

Commonly used mobile terms

Call drop The abrupt ending of a phone conversation because of so called "network-failure"

Generation Stages of mobile service technology; a 2, 3, 4G higher number denotes greater speed and efficiency

Number System that allows a subscribers to portability retain his or her number while changing cities or operators

Spectrum Radiowaves that carry voice and other telecom data; its alleged arbitrary allocation was at the heart of 2G scandal.

Telecommunications is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India will reach US$ 32.5 billion in 2015 and is expected to touch US$ 37 billion in 2017, registering a compound annual growth rate of 5.2 per cent.

It has been expected that smartphones will account for two out of every three mobile connections globally by 2020 and India is all set to become the fourth largest smartphone market.

The broadband services user-base in India is expected to grow to 250 million connections by 2017.

India saw the fastest growth in new mobile-phone connections with 18 million net additions almost in each quarter, followed by China with 12 million new additions, according to a report by a reputed Swedish mobile network equipment maker.

EXPORTS

The Company has been exporter of Telecommunication products and related systems to various countries worldwide.

The export revenue of the Company for the financial year 2014-2015 is Rs. 2.82 crores (F.O.B). The Company has been involved in the turnkey projects which are inclusive of survey, planning, installation, commissioning etc. We are already having various agents/distributors/value added resellers worldwide.

FUTURE OF TELECOM INDUSTRY

In 2015-2016, we will witness multiple Indian players launching 4G on a more efficient 1800 MHz spectrum. Indian subscribers will adopt 4G wholeheartedly to satiate their need for mobile data. We expect 4G LTE subscribers to reach 10 million to 15 million by December 2015 driven by competitive pricing, superior network experience and affordable smartphones.

India will see a significant spurt in Wi-Fi hotspots driven by both the government 'smart cities' and 'digital India' as well as private sector initiatives. However, wired broadband for retail consumers is likely to remain work-in-progress by the end of 2015.

BUSINESS SNAPSHOT

Your Company is a complete telecom solution provider offering suite of both in-building and outdoor repeaters and DAS Products. The company is a leading global telecom manufacturer supplying indoor and outdoor wireless signal enhancement solution. Your Company also deals in In-building solutions and state of the art Turnkey projects. Service providers are going big way in "In-Building solution" where your Company is one of the leading solution provider. In addition to revenue from manufacturing, handsets and accessories contribute to the turnover of the Company.

The Company imports mobile handsets and accessories from world renowned suppliers like ZTE and HUAWEI. Your Company has its presence in Asia Pacific, USA, Europe, North & South America and Russia.

OUTSOURCING OF MANUFACTURING ACTIVITIES CARRIED AT PLANT SITUATED AT UV-246, PHASE - IV, UDYOG VIHAR, GURGAON

The Company carried out its manufacturing operations from the plant situated at UV-246, Phase-IV, Udyog Vihar, Gurgaon. The Company initiated the process of Discontinuing/ outsourcing the manufacturing operations in pursuance to the resolution passed in the meeting of Board of Directors held on 9th Feberuary, 2015 and thereby vacated the premises by 15th April, 2015 and disposed off all tangible assets except

vehicles, discharged/provided for contractual obligations of manpower/worker and resolved to outsource the operations henceforth. Consequently there is only one reportable segment as on 31st March, 2015.

SUBSIDIARY COMPANY

The Company has only one subsidiary viz. Shyam Telecom Inc, USA. During the year, Board of Directors reviewed the affairs of the subsidiary. Sec 129(3) of the Companies Act 2013 states that where a Company has one or more subsidiaries, a consolidated financial statement of the Company and of all subsidiaries shall be laid before annual general meeting of the Company in the same form and manner. In accordance with the section we have prepared consolidated financial statements of the Company and its subsidiary, which forms part of the Annual Report.

Further a statement containing the salient features of the financial statements of the subsidiary in the prescribed format AOC-1 is appended as Annexure-I to the Board's Report. The statement also provides the details of performance, financial position of the subsidiary.

The financial statements including the consolidated financial statements, financial statements of subsidiary and all other documents required to be attached to this report have been uploaded on the website of your Company. (www.shyamtelecom.com)

The financial year of the subsidiary is from 1st January 2014 to 31st March 2015. Accordingly, accounts enclosed are for the afore-stated period

PUBLIC DEPOSIT

During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013 and Article of Association of the company, Mr. Arun Khanna, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. His brief profile has been stated in the Corporate Governance Report.

Your directors recommend his re-appointment. All the Directors of the Company have confirmed that they are

not disqualified from being staying on the Board of Directors in terms of Section 164(2) of the Companies Act, 2013 and they have also filed their consent for such appointment.

SEBI vide its circular dated 17th April, 2014 had made it mandatory for all the listed companies to appoint atleast one Woman Director on the Board of Company by 31st March, 2015 in alignment with the requirement of Section 149 of the Companies Act, 2013, under corporate governance norms. Mrs. Nishi Arora Sabharwal was appointed as Women Independent Director w.e.f. 30.09.2014 and is part of the Board.

Furthermore to comply with requirement of Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following persons were designated as KMPs

Mr. Ajay Khanna – KMP (Managing Director)

Mr. Dharmender Dhingra – KMP (Company Secretary & Compliance Officer)

Mr. Gursharan Singh – CFO

Mr. B S Yadav – CEO

The Board in its meeting held on May 30, 2015 appointed Mr. Vinod Raina as CFO of the Company. Mr. Gursharan Singh was re-designated as CEO of the Company in place of Mr. B S Yadav, who resigned from the Company.

FORMAL ANNUAL EVALUATION

Your Company in the meeting of its Board held on 8th February 2015, discussed and evaluated the performance of the Board as per below mentioned 3 tier basis:

1. Work of Chairperson evaluated by all the other Directors.

2. Work of Executive, Non-Executive Directors evaluated by all the Non – Executive Independent Directors.

3. Independent Directors contribution evaluated by the Executive & Non – Executive Directors.

The parameter for evaluation was based on following points:

1. Leadership initiative

2. Initiative in terms of new ideas and planning for the Company

3. Professional skills, problem solving, and decision-making.

4. Compliance with policies of the Company, ethics, code of conduct, etc.

5. Reporting of frauds, violation etc.

6. Safeguarding of interest of whistle blowers under vigil mechanism.

7. Timely inputs on the minutes of the meetings of the Board and Committee, if any.

8. Consideration of the independent audit plan and provides recommendations

9. Is the board as a whole up to date with latest developments in the regulatory environment and the market?

FAMILIARISATION PROGRAMME MODULE

The Familiarization Program Module ("the Program") for Independent Directors ("ID") of the Company has been adopted by the Board of Directors pursuant to Securities and Exchange Board of India vide Circular no. CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014

The Independent Directors were intimated and informed about the operational, financial, legal and secretarial aspects of the company. The familiarization programme has been posted on the Company's website www.shyamtelecom.com.

VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has established a vigil mechanism programme for overseeing the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of the employees.

Your Company believes in the conduct of the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. To develop a culture where it is safe for all Directors and Employees to raise genuine concerns or grievances the Company established vigil mechanism for Directors and Employees in pursuance of Clause 49 of the Listing Agreement between the Company and the Stock Exchanges and Section 177(9) of the Companies Act, 2013 and Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In order to prevent sexual harassment of women at work place The Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. Details of constitution of the committee forms part of the policy and have been posted on the website of the Company (www.shyamtelecom.com). During the year under review, there were no cases filed pursuant to the said act.

RISK MANAGEMENT POLICY

As per the requirements of Clause 49 of the Listing Agreement, your Company has constituted a Risk Management Committee to oversee the risk management efforts in the Company under the Chairmanship of Mr. N. Kumbhat, Independent Director. The details of the Committee along with its charter are set out in the Corporate Governance Report forming part of this Report.

During the financial year 2014-15, the Board of Directors have approved the risk management policy and the risk appetite for your Company as proposed by the Management and recommended by the Risk Management Committee.

To ensure that all current and future material risk exposure of company is identified and mitigated the Company has formulated Risk Management Policy. The policy explains the risk pertaining to financing activities, dependence on distribution network, and their mitigation. The policy is available on the company website (www.shyamtelecom.com) and can be read from there.

RISK FACTORS & MITIGATION

The risks associated with the Company were mostly related to expansion/modernization plan along with utilizing distribution network with current financing activities. The Company is trying to create more avenues for sale of handsets to various other buyers so that dependence on one buyer could be reduced. The Company also follows conservative finance and accounting policy and keeps regular check on various financial health parameter.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provision of section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

i) in the preparation of the Annual Accounts for the year ended 31st March 2015, the applicable Accounting Standards had been followed and there are no material departure from the same.

ii) the Directors 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 the affairs of the Company at the end of financial year 2014-2015 and of the profit/ loss of the Company for the year ended as on that date;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in the accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) Annual Accounts have been prepared on a going concern basis.

v) the Directors had laid down internal financial controls which are followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

AUDITORS

In the Annual General Meeting held on 30.09.2014, M/s Mehra Goel & Company, Chartered Accountants, were appointed as Statutory Auditors to hold office till the conclusion of 24th AGM, to be held for the financial year ending 2017. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the Twenty Second Annual General Meeting through ratification. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of the Companies Act, 2013.

AUDITORS REPORT

The Auditor's Report presented by M/s. Mehra Goel & Company, Chartered Accountants, the Statutory Auditors

on the accounts of the Company for the financial year ended 31st March, 2015 is unqualified. They have in the report drawn attention to the ongoing matter with the ARM Limited for which Company has filed an application under section 34 of the Arbitration and Conciliation Act, 1996. The matter is presently sub-judice.

COST AUDITOR

As per Section 148 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company has appointed M/s. K. G Goyal & Associates, Cost Accountants as the Cost Auditor for the financial year 2015-16 on the recommendations made by the Audit Committee. The remuneration of Rs. 40,000/- (Rupees Forty Thousand only) per annum is proposed to be paid to the Cost Auditor, subject to the ratification by the members at the ensuing AGM, excluding taxes and out of pocket expenses, if any.

Your Company has received consent from M/s. K. G Goyal & Associates, Cost Accountants, to act as the Cost Auditor for the financial year 2015-16 along with a certificate confirming their independence.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s A.N. Kukreja, Practicing Company Secretary to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure - II" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as "Annexure – III" to this Report.

RELATED PARTY TRANSACTIONS

The details of the related party transactions as required under Accounting Standard - 18 are set out in Notes to the standalone financial statements forming part of this Annual Report. AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as "Annexure-IV" to this Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has set up CSR committee to facilitate its CSR related operations. The Company donated medicines worth Rs. 2.47 lakhs for the people who were affected by the J&K Flood Disaster. In addition to this Company supports following organizations towards well-being of the society:

1. Shrimati Pushpawati Loomba Memorial Foundation for the purposes of Widows Empowerment Project in India

2. Centre for Empowerment and Initiatives

3. Bhartiya Handicapped Cricket Association

4. Shri Maharshi Dayanand Saraswati Samarak Trust Tankara.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements. A note on the same has been provided in the Management Discussion and Analysis Report.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, as required under section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of The Companies (Accounts) Rules, 2014, is enclosed as Annexure – V and forms part of this report.

PARTICULARS OF EMPLOYEES

The disclosure of remuneration of Directors is in compliance with Section 197(12) in accordance with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Section 134 of the 2013 Act.

INDUSTRIAL RELATIONS

The Company remains regularly in touch with each employee for the redressal of their grievances and maintains high quality standards for them. The industrial relations of your Company are normal.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder and Clause 49 of the Listing Agreement, the Company is having Nomination and Remuneration Policy framed on the recommendations of the Nomination and Remuneration Committee for determining qualifications, positive attributes, independence of a Director etc.

The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this report.

The Managing Director and CEO of your Company does not receive remuneration from the subsidiary of your Company.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/employees of your Company is provided in this Report as "Annexure - VI".

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the financial year 2014-15, Mrs. Nishi Arora Sabharwal was appointed as Women Independent Directors of your Company on 30.09.2014. Mr. Praveen Kumar Bhatia, Independent Director expressed his desire for not continuing as an Independent Director on the Board of Directors of your Company and stepped down on 06.06.2014. The Board in its meeting held on May 30, 2015 appointed Mr. Vinod Raina as CFO of the Company. Mr. Gursharan Singh was re-designated as CEO of the Company in place of Mr B S Yadav, who resigned from the Company.

ANNUAL EVALUATION OF BOARD'S PERFORMANCE

In terms of the provisions of the Companies Act, 2013 read with Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board/Director(s) for the financial year 2014-15.

NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of the number of Board and Audit Committee meetings of your Company are set out in the Corporate Governance Report which forms part of this report.

CORPORATE GOVERNANCE

In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance forms an integral part of this report.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis as stipulated under clause 49 of the Listing Agreement, as applicable, forms the part of this report as Annexure - VII.

CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements of your Company for the financial year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI).

The consolidated financial statements have been prepared on the basis of Audited Financial Statements of the Company and its subsidiary.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Loans, guarantees and investment covered under Sec 186 of the Companies Act, 2013 forms part of the notes to the financial statements provided in this Annual Report.

COMPOSITION OF AUDIT COMMITTEE

Disclosure pursuant to the provisions of section 177 of the Companies Act, 2013, the Audit & Finance Committee of the Company consists of:

Mr. Achintya Karati - Independent Director & Chairman

Mr. Vinod Juneja - Independent Director & Member

Mr. C.S.Malhotra - Independent Director & Member

Mr. Narendra Kumbhat - Independent Director & Member

Mr. Arun Khanna - Non Executive Director & Member

Mr. Dharmender Dhingra - CS & Vice President (Legal)

ACKNOWLEDGEMENT

The Board wishes to place on records its-sincere appreciation for the continued assistance and support extended to the Company by its Bankers, Vendors, Government Authorities and Employees.

Your Directors acknowledge with gratitude the encouragement and support extended by our valued Shareholders.

On Behalf of the Board of Directors of

SHYAM TELECOM LIMITED

Sd/- Sd/-

PLACE: NEW DELHI AJAY KHANNA N Kumbhat

DATE: 30th May,2015 Managing Director Director

---

Mar 31, 2014

Dear Members,

The Director''s are delighted to present the Twenty First Annual Report on the Business and Operations of the Company together with the Audited Financial statements for the year ended 31st March, 2014.

TELECOM INDUSTRY IN INDIA

AN OVERVIEW

Globally the Telecom Industry is in the midst of a transformational shift, driven by a huge surge in data traffic on telecom networks. A number of mobile operators are rolling out 4G networks across the globe. A number of wire line operators are rolling out "Fiber to the home", providing enormous bandwidth up to 100 Mbps to the subscribers. Users will be able to gravitate to fastest, most reliable and best priced wireless networks available. The migration of speed seeking data users to 4G may be accompanied by a rise in volume of voice calls on legacy 2G and 3G networks. Operators are offering very competitive tariffs to encourage more of their subscriber base to use mobile data services. 4G customers are likely to generate higher Average Revenue Per User (ARPU) than 3G customers.

Globally, the governments are making more spectrums available to exacerbate the spectrum shortage. More and more mobile operators are deploying emerging technologies such as HetNets to overcome the spectrum exhaustion.

India, the second largest telecom market by subscriber base after China, witnessed phenomenal growth in last decade. The 2G scam leading to cancellation of a spate of licenses, high competition, heavy debt and flip-flops on regulatory and other policy issues in recent years, have taken a heavy toll on the sector, hurting the profitability of companies.

India becomes one of the fastest growing telecom markets in the world. The unprecedented increase in teledensity and sharp decline in tariffs in the Indian telecom sector have contributed significantly to the country''s economic growth. Besides contributing about 5.3% to India''s GDP, Telecommunications alongwith Information Technology has greatly accelerated the growth of the economic and social sectors.

DRIVING BROADBAND GROWTH

Department of Telecommunication in India has planned to increase rural teledensity from 40 to 60 by year 2017 and 100 by year 2020. Moreover, the National Broadband Plan envisages 160 million broadband connections including 60 million wireless broadband connections by the year 2014. There are plenty of opportunities for the communication service providers in India to address this growth path.

Government of India has approved building of National Optical Fiber Network (NOFN) to provide connectivity to 250,000 Gram Panchayats of the country. The project envisages providing high-speed and high-quality broadband access to all village panchayats through optic fiber by year 2014 and progressively to all villages and habitations.

ADDRESSING AND RURAL CHALLENGE

India''s mobile service providers (MSP''s) have yet to tap the full potential of rural India, as large parts of rural India are in dire need of telecom service. Bridging the rural-urban digital divide is critical for India''s inclusive growth in financial, healthcare and education sector, among others. The challenge, however, is to deliver a mobile service to rural users, that is viable and profitable at the current low levels of ARPU.

Notwithstanding the economic progress over the last decade, the digital divide in the country continues to be significant. Expansion of telecommunication in the rural areas has been slow as compared to urban areas, with the former accounting for only 39.6% of the total connections. In addition to this, there is wide variation in teledensity from one state to the other. States such as Punjab, Kerala, Karnataka, Tamil Nadu, Gujarat and Maharashtra have higher teledensity in the range of 87% to 109% vis-a-vis states such as Bihar, Uttar Pradesh, Madhya Pradesh and Assam having teledensity in the range of 44% to 55%.

EXPORTS

Your Company is exporting Telecommunication products and system to various countries worldwide.

The export revenue of the Company for the financial year 2013-14 is of Rs 12.38 crores (F.O.B). The Company has taken turnkey projects worldwide, which includes the survey, planning, installation, commissioning etc. We already have various agents/distributors/value added resellers worldwide

FOREIGN DIRECT INVESTMENT

The consolidated foreign direct investment (FDI) policy of India 2014 has been announced by India and it has brought many far reaching changes and reforms. FDI in the licensee company/ India promoters/investment companies including their holding companies shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall ceiling of 100 %. The investment up to 49% is through Automatic Entry

Route but beyond it, the approval of FIPB is required. While approving the investment proposals, FIPB takes note that investment is not coming from countries of concern and/or unfriendly entities.

Telecom is considered to be highly potential for investments and upcoming industries. The Investments in telecom equipment manufacturing is allowed up to 100% and entry route is fully automatic but subject to sectoral caps.

FUTURE OF TELECOM

The Indian telecom sector has proved to be an international success story. The success has witnessed a commendable growth over the past couple of years within overall subscriber base 951.34 million and teledensity of 78.66. the sector continues to leapfrog from strength to strength with the urban teledensity reaching 169.55. The market has been showing signs of maturity.

The telecom industry is geared up to drive the next round of growth particularly with voice based services. It is envisaged that the 3G and BWA are expected to reinvigorate the maturing urban market and would help in bringing balance growth of the economy.

The phenomenal growth observed in mobile services is yet to be replicated in broadband and other related services where the subscriber base is quiet low. Other areas on which majority of players in this industry are concentrating is the rural India where enormous untapped potential exists.

With the advent of new generation technologies & products, operators are looking out aggressively to roll out 3G & broadband wireless access services. The demand for telecom equipments has contemplated increased to cease such surfacing opportunities. Even government is also coming out with such conducive policies to support and give impetus manufacturing industries. With all around efforts from being an import centric industry, it is becoming a global telecom manufacturing hub. The road map of its growth is being travelled by setting up domestic manufacturing facilities by Indian Companies along with multinational companies.All the big players- Multinational Companies like Nokia, Alcatel, Motorola, LG Electronics, Samsung etc. have already set up their production facilities in the country and many more are planning to set up.

COMPANY''S OVERVIEW

Your company is a leading global telecom manufacturer supplying indoor and outdoor wireless signal enhancement solution for more than 100 networks in 5 continents. Your company designs and manufactures cost effective RF Repeaters , Optical distributive antenna solutions, IP Cellular backhauls systems and signals enhancement accessories that enable mobile operators, real estate developers, neutral host providers and business provide seamless, wireless coverage within their network. Besides manufacturing we are also in trading of CDMA handsets, data cards and accessories. Substantial turnover from these handsets and accessories contributes to the top line of the company.

The company import these mobile handsets and accessories from world renowned suppliers like LG, Samsung, ZTE, and HUAWEI. The company is also planning to add a range of new handsets and accessories in the market in the coming years.

Despite of concern and cautious approach prevailing in the telecom industry, post cancellation of licenses, your company has still been trading handsets and accessories with encouraging growth levels. There is a freeze of Capital Expenditure being observed by Telecom Industry as a whole but your company has products which can help operators to enhance their existing networks to achieve optimum efficiency with very low costs.

The company got FCC certification for its 43dBm Repeater and also launched its IP based software feature which will fasten the application of products and make it more user friendly.

Your company has been instrumental in translating the requirements of the operators by using the products of the company like RF Repeaters, Optical Das, IP Backhaul, etc. with minimum capital expenditure and maximum network optimization.

FINANCIAL PERFORMANCE

(Rupees in Lacs)

Financial Financial PARTICULARS Year Year 2013-2014 2012-2013

Sales and Services 34,915.41 42,579.51

Profit/(Loss) before Tax and

Exceptional Items (142.54) 148.45

Exceptional Items - 118.31

Profit/(Loss) Before Tax (142.54) 30.14

Provisions for Income Tax

- Current tax 42.50 133.00

- Deferred tax (61.57) (107.92)

Income tax/ Deferred

Tax for earlier year 11.46 -

Profit/(Loss) After Tax (134.93) 5.06

OPERATIONS

During the Year under review your company has registered a turnover of Rs. 34915.94 Lacs against Rs. 42,579.51 Lacs in year 2012- 2013. A net loss of Rs. 134.93 Lacs has been made during this year as against a profit of Rs 5.06 Lacs in the previous year. This year to year decrease in the turnover is 18 %. The reduction in the net profit is due to reduction in turnover.

DIVIDEND

In view of losses incurred during the year under review, the Board of Directors of the Company has not recommended any divided to the shareholders for this financial year.

SUBSIDIARY

The Company has only one subsidiary viz. Shyam Telecom Inc, USA and therefore as per section 212 of the Companies Act, 1956, the report and Audited Accounts of the subsidiary company along with the statement from the part of Annual Report. Subsidiary also provides the logistic benefits which helps in quick delivery of products at the customer end.

The financial year of the subsidiary is from 1st January to 31st December, accordingly, Accounts enclosed are for the period of whole year i.e. from 1st January 2013 to 31st December 2013.

PUBLIC FIXED DEPOSIT

During the year under review the company has not accepted any deposits from public under section 58A of the Companies Act, 1956 and rules made there under.

DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013 and Article of Association of the company, Mr. Rajiv Mehrotra and Mr. Ajay Khanna, Directors of the company, retire by rotation at the ensuing Annual General Meeting and be eligible, offer themselves for re-appointment. Their brief profile has been stated in the Corporate Governance Report.

Necessary resolutions for the appointment/re-appointment of the aforesaid directors have been included in the notice convening the ensuing AGM and details of the proposal for appointment/re-appointment are mentioned in the explanatory statement of the notice.

Your directors recommend their appointment/re-appointment. All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 164(2) of the Companies Act, 2013 and they have also filed their consent for such appointment.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provision of section 217(2AA) of the Companies Act, 1956, your directors confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with the proper explanation relating to material departure wherever necessary;

ii) The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the company at the end of financial year 2013-2014 and of the profit/ loss of the company for the year ended as on that date;

iii) The Directors had taken proper and sufficient care for the maintenance of adequate Accounting Records in the accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the Annual Accounts on a going concern basis.

AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014 and pursuant to the recommendations of the Audit Committee of the Board of Directors, M/s. Mehra Goel & Company, Chartered Accountants (Registration No. 000517N), re- appointed as auditors of the Company, to hold office from the conclusion of this AGM to the conclusion of the 24th AGM, for the financial year ending 2017 (subject to ratification of the appointment by the members at every AGM held after this AGM) at the remuneration to be determined by the Board of Directors of the Company.

AUDITOR''S REPORT AND CLARIFICATION

The auditor''s report presented by M/s. Mehra Goel & Company, Chartered Accountants, Statutory Auditors on the accounts of the Company for the financial year ended 31sr March, 2014 is self explanatory and requires no comments.

COST AUDITOR

The Board, on the recommendation of the Audit Committee, has approved the appointment of M/s K. G Goyal & Associates and remuneration of Cost Auditors to conduct the audit of the cost records of the Company for the financial year ending 31 March, 2015.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company.

CORPORATE SOCIAL RESPONSIBILITY

Your Company endeavours to grow its business in a socially and environmentally responsible way, while upholding the interest of the stakeholders. the company also believes in taking an active role and responsibility in helping NGO''s and other charitable institutions.

The company shows an exceptional caution in use of paper (as duplex printing is the standard setting for printer and copiers). No paper is trashed unless it has been used both the sides. The company is conscious and committed towards its social responsibility.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, as required under section 217 (1) (e) of the Companies Act, 1956 read with the companies (Disclosure of Particulars in the report of Board of Directors) Rule, 1988, is annexed and form the part of this Report.

PARTICULARS OF EMPLOYEES

In compliance with provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rule 1975, statement of particulars of employees has not been given as none of employee during the financial year drew remuneration more than Rs. 5 Lacs per month or Rs. 60 Lacs per annum.

INDUSTRIAL RELATIONS

Relation with the Employees remain cordial and your Directors wish to place on record their appreciation of the co-operation and contribution made by the employees at all levels.

CORPORATE GOVERNANCE

The Company is regularly complying with the regulatory norms of Corporate Governance as stipulated under clause 49 of the listing agreement. A Report on Corporate Governance as required under Clause 49 of the Listing Agreement, as applicable, form the part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis as required under clause 49 of the Listing Agreement, as applicable, form the part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21, Audited Consolidated Financial statements have been attached which form the part of this report and accounts.

COMPOSITION OF AUDIT & FINANCE COMMITTEE

Disclosure pursuant to the provisions of section 292A of the Companies Act, 1956, the Audit & Finance Committee of the company consists of:

Mr. Achintya Karati - Independent Director & Chairman

Mr. Vinod Juneja - Independent Director & Chairman

Mr. Narendra Kumbhat - Independent Director & Member

Mr. Praveen Kumar Bhatia - Independent Director & Member

Mr. C.S.Malhotra - Independent Director & Member

Mr. Arun Khanna - Non Executive Director & Member

Mr. Dharmender Dhingra - Vice President (Legal) & Company Secretary.

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude the co-operation received from bankers , Central and State Government Departments, Local Authorities and Customer for their continued guidance and support.

Your Directors also convey their gratitude to the Shareholders, Statutory Auditors and Employees of the company for their commit and support which has contributed to the growth and success of the company.

On Behalf of the Board of Directors of

SHYAM TELECOM LIMITED

Sd/- Sd/-

PLACE: NEW DELHI AJAY KHANNA ALOK TANDON DATE: 30th May,2014 Managing Director Director

---

Mar 31, 2013

Dear Members,

The Director''s are pleased to present the Twentieth Annual Report on the business and operations of the company together with the Audited Financial statements and Accounts for the year ended 31st March, 2013.

TELECOM INDUSTRY IN INDIA

AN OVERVIEW

India''s telecommunication network is the second largest in the world based on the total number of telephone users (both fixed and mobile phone). It has one of the lowest call tariffs in the world enabled by the mega telephone networks and hyper-competition among them. It has the world''s third- largest Internet user-base with over 137 millions. Major sectors of the Indian telecommunication industry are telephony, internet and television broadcasting.

The central paradox inherent in the business of telecommunications over the past several years was at its most vivid in 2013. Having finally recovered fully from the global economic downturn and come to terms with the challenge of mass broadband and digitization, the industry had to contend with the ongoing issues of how to grow and become more profitable. We define digitization as the mass adoption of connected digital technologies and applications by consumers, enterprises, and governments—a revolutionary movement that is reshaping the sector.

The Indian telecommunication industry is one of the fastest growing in the world. Government policies and regulatory framework implementation by Telecom Regulatory Authority of India (TRAI) have provided conducive environment for service providers. This has made the sector more competitive, while enhancing the accessibility of telecommunication service at affordable tariffs to the consumers. In the last two decades, the Indian Telecom Sector and mobile telephony in particular has caught the imagination of Indian by revolutionizing the way we communicate, share information; and through its staggering growth helped millions stay connected.

The Telecom industry has witnessed significant growth in subscriber''s base over the last decade, with increasing network coverage and a competition- induced decline in tariffs acting as catalysts for the growth in subscriber''s base. The growth story and the potential have also served to attract newer players in the industry, with the result that the intensity of competition has kept increasing.

According to Telecom Regulatory Authority of India (TRAI), the number of telephone subscriber base in the country reached 898.02 million as on March 31, 2013, thereby showing a monthly growth rate of 0.67% resulting to overall teledensity of 73.32 million. The share of urban subscriber database is 548.80 million whereas share of rural subscriber base reached to 349.22 million resulting in teledensity of 146.96 million in Urban & 41.02 million in Rural.

The wireless subscriber base reached to 867.80 million at the end of March 2013 having teledensity of 140.67 million in urban & 40.23 in rural which results in a total wireless teledensity as 70.85 million.

The wireline subscriber base reached to 30.21 million at the end of March 2013 having teledensity of 6.29 million in urban & 0.79 in rural which results in a total wireline teledensity as 2.47 million.

Mobile Number Portability requests increased to 89.70 million at the end of March 2013. In the month of March 2013 alone, 2.87 million requests have been made for MNP.

The controversies surrounding the telecom sector, notwithstanding, Industry still present a positive picture of this area, saying the telephone density has increased and call prices have dropped to the lowest level in the world.

Telephone density in rural areas has increased 25 times, while India now has one of the lowest telecom rates in the world making phones accessible to the poor.

With an aim to provide connectivity to the farthest corner of the country, the government is also connecting around 2.5 lakh gram panchayats through optical fibre by 2014.

The telecom sector, which has been hit by controversies and court judgements in the last few years, has also witnessed regulatory uncertainty and hurt the investor sentiment.

NATIONAL TELECOM POLICY, 2012

The National Telecom Policy 2012 was encapsulated to adopt such telecommunication technologies which would offer viable options in subjugating developmental challenges in the field of education, health and employment generation. NTP 2012 strives to ensure an investor friendly environment thereby attracting domestic as well as foreign investors. Currently, there is 74% FDI in the Indian telecom sector. The core objective of this policy is to provide affordable and effective communication facilities to all the citizens.

The key objectives of NTP 2012 are as follows:

- To provide broadband on demand by 2015 to all citizens and businesses in both rural and urban areas, and participate in internet and web economy. It also aims to achieve 175 million broadband connections by the year 2017 and 600 million by the year 2020 at minimum 2 Mbps download speed and making available higher speeds of at least 100 Mbps on demand.

- To support platform neutral services in e-governance and m-governance in key social sectors such as health, education and agriculture.

- To address and enable the coordinated action to respond to the dynamic needs resulting from confluence of telecom, broadcasting and IT sectors.

- To incorporate framework for enhancing spectrum availability, comprising of triple play services (voice, video and data) using broadband technology.

- Common Service Centers, AADHAR based electronic authentication framework and Cloud computing enabled.

- To provide clear cut strategies to overcome challenges in network and communication security and communication assistance to law enforcement agencies.

- To recognize and reinforce the role of PSUs in proving telecom services in rural areas and broadband penetration in the country.

- To further empower the Telecom Regulatory Authority of India (TRAI) as a backbone of policy implementation.

- To recognize the need of robust and resilient telecom networks for mitigating any kind of natural or manmade calamities.

- To recognize the futuristic role of Internet Protocol Version 6 (IPv6) and its application in different sectors of Indian economy.

- Increase rural teledensity from the current level of around 39 to 70 by the year 2017 and 100 by the year 2020.

- Create a corpus to promote indigenous R&D, IPR creation, entrepreneurship, manufacturing, commercialization and deployment of state-of-the-art telecom products and services during the 12th five year plan period.

- To meet Indian telecom sector demand to the extent of 60% and 80% with a minimum value addition of 45% and 65% by the year 2017 and 2020 respectively.

- To simplify the licensing framework and create a one nation – one license policy across service and service areas.

- To achieve full mobile portability throughout India work towards free roaming.

- To reinvent mobile communication so as to provide proof of identity, full financial security, multi-lingual services, high quality seamless voice, data, multimedia and broadcasting services, fixed- mobile convergence.

- To make available additional 300 MHz spectrum for IMT services by the year 2017 and another 200 MHz by 2020.

- To provide for regular audit of spectrum usage, de-licensing additional frequency bands for public use, address the Right of Way (RoW) issues in setting up of telecom infrastructure, setting up of a common platform for interconnection of various networks for providing non-exclusive and non-discriminatory access.

- To enhance and continue adoption of green policy in telecom and incentivize use of renewable energy sources for sustainability.

TELECOM SECTOR: STRAREGIC REVIEW

In 2012, the telecom sector in India came under intense scrutiny due to a number of reasons ranging from cancellation of 2G licenses, ambiguity in implementation of key policy measures and dip in wireless subscriber net additions. Topping them all was the spectrum auction debacle. In February 2012, the Supreme Court of India cancelled 122 telecom licenses issued in 2008. The cancellation of telecom licenses and muted response to their re-auction has resulted in consolidation in the telecom industry. These events have stolen the limelight from the National Telecom Policy (NTP), the draft of which is hailed as progressive and encouraging for the sector in the coming decade. The past year induced negative sentiment in the sector and affected investor confidence. As a result, international interest in the India telecom market is gradually waning.

EXPORTS

Your Company is exporting Telecommunication products and system to various countries.

Your Company has done some major exports is the New Markets which includes Dominican Republic, Jersey Island, Vietnam, Georgia, Mongolia, Mozambique, Zanzibar, Bolivia, etc. The Export revenue is growing on yearly basis. In the recent past the Company has completed some major in- building projects in different countries. The Company has taken Turnkey Projects in many countries, which includes the survey, planning, installation, commissioning etc. The products are being sold to more than 100 operators in 40 countries. We have also appointed many Agents/ Distributors/ Value Added Resellers in many countries. In the recent past

we have been short listed as a preferred supplier for many operators in Europe, Africa, and Latin America etc. We are expecting many big orders from the North and South America.

FOREIGN DIRECT INVESTMENT POLICY

The consolidated foreign direct investment (FDI) policy of India 2013 has been announced by India and it has brought many far reaching changes and reforms. FDI in the licensee company/ India promoters/investment companies including their holding companies shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall ceiling of 74 percent. The investment up to 49% is through Automatic Entry Route but beyond it, the approval of FIPB is required. While approving the investment proposals, FIPB takes note that investment is not coming from countries of concern and/or unfriendly entities.

Telecom is considered to be highly potential for investments and upcoming industries. The Investments in telecom equipment manufacturing is allowed up to 100% and entry route is fully automatic but subject to sectoral caps.

FUTURE IN TELECOM

The Indian telecommunication sector has registered a phenomenal growth during the past few years and has emerged as the second largest network in the world. On back of ongoing investments into infrastructure, the country is projected to witness high penetration of Internet, broadband, and mobile subscribers in the near future.

India''s mobile services market will touch Rs.1,200 billion (US$20.24 billion) in 2013, registering a growth of 8 percent from Rs.1,100 billion (US$18.55 billion) in 2012, according to a report by Gartner Inc. Mobile connections are expected to grow to 770 million in 2013, an 11 percent increase from 712 million connections in 2012.

Internet traffic in India is expected to reach from 393 retabytes per month in 2012 to 2.5 exabytes per month in 2017, as highlighted that the "Internet traffic growth in India is the fastest globally."

Key Statistics

India is expected to have 130.6 million mobile internet users by March 2014, as per a joint study by the Internet and Mobile Association of India (IAMAI) and Indian Market Research Bureau (IMRB).

The mobile value-added services (MVAS) market is expected to reach US$9.5 billion in 2015, from US$4.9 billion in 2012, stated a joint research report by Wipro Technologies and the Internet and Mobile Association of India (IAMAI).

The telecommunications industry attracted foreign direct investments (FDI) worth US$12,856 million between April 2000 to March 2013, an increase of 7 percent to the total FDI inflows in terms of US$, according to data published by Department of Industrial Policy and Promotion (DIPP).

Market Dynamics

The Indian mobile phone market is highly competitive with more than 150 device manufacturers trying to woo the consumers with their offerings. Most of these producers focus their efforts on the low-cost feature phone market, which constitutes over 91 percent of overall mobile phone sales, offering a huge scope for growth.

"India will add more Internet users than any country in the world over the next three years, as average penetration rises from 10 percent to 28 percent," as per McKinsey and Co report. Besides, with increased Internet penetration, 22 million jobs would be created by 2015.

The number of mobile banking transactions in India doubled to 5.6 million worth US$114.72 million in January 2013 from 2.8 million transactions worth US$35.06 million in January 2012.

COMPANY''S OVERVIEW

Your company is a leading global telecom manufacturer supplying indoor and outdoor wireless signal enhancement solution for various networks. Your company designs and manufactures cost effective RF Repeaters , Optical distributive antenna solutions, IP Cellular backhauls systems and signals enhancement accessories that enable mobile operators, real estate developers, neutral host providers and business providers, seamless, wireless coverage within their network. Besides manufacturing we are also in trading of CDMA handsets, data cards and accessories. Substantial turnover from these handsets and accessories contributes to the top line of the company.

The company import these mobile handsets and accessories from world renowned suppliers like Alcatel, ZTE, and HUAWEI. The company is also planning to add a range of new handsets and accessories in the market in the coming years.

The present Telecom Environment post cancellation of the Telecom Licenses, Industry is looming under immense pressure from all fronts. Uncertainty and Insecurity in the sector has compelled the companies to hold on all expansions & capital expendituresactivities. Financial Institutions and other lenders have also shown indifferent lending terms for the present state of industry and have shown cold feet in funding few big projects. Your Company believes the sector goes through a next level change on all fronts like regulatory, Legal, Policy, etc…

FINANCIAL PERFORMANCE

(Rupees in Lacs) Financial Financial PARTICULARS Year Year 2012-2013 2011-2012

Sales and Services 42,579.51 79,975.15

Profit before Tax & Exceptional Items 148.45 825.55

Exceptional Items 118.31 339.75

Profit before Tax 30.14 485.80

Provision for Income Tax

- Current Tax 133.00 240.00

- Deferred Tax (107.92) (69.49)

- Income Tax/ Deferred Tax

for earlier year 40.92

Profit after Tax 5.06 274.37

OPERATIONS

During the Year under review your company has registered a turnover of Rs. 42,579.51 Lacs against Rs. 79,975.15 Lacs in year 2011- 2012. A net profit of Rs. 5.06 Lacs has been made during this year as against a profit of Rs 274.37 Lacs in the previous year. This year to year decrease in the turnover is 46.76 %. The reduction in the net profit is due to reduction in turnover.

The fall in turnover is on account of cancellation of Telecom operator''s licenses, which has reduced the circles of various operators including Sistema Shyam Teleservices Ltd. (SSTL). Your company is the national distributer of handsets for SSTL and accordingly the hit to our top line was imperative along with them. The full potential of the Repeater business could also not fructify due to capital expenditure freeze, squeezed liquidity in the industry and on the planned rollouts by operators.

The company during the year restructured its working capital requirements and reconfigured the consortium partners as full working capital credit limits were not optimally utilized, hence your company surrendered the limits extended by the State Bank of India.

DIVIDEND

The Board considering prudent to conserve resources for investment in business regrets its inability to recommend any dividend for the year ended 31st March 2013.

SUBSIDIARY

The Company has only one subsidiary viz. Shyam Telecom Inc, USA and therefore as per section 212 of the Companies Act, 1956, the report and Audited Accounts of the subsidiary company along with the statement from the part of Annual Report. The subsidiary being near to the customer is able to provide the end to the end support to the customers. The subsidiary has appointed to the local manpower so that it can fully understand the customer requirement and can provide the best solutions. Your Subsidiary also provides the logistic benefits which helps in quick delivery of products at the customer end.

The financial year of the subsidiary is from 1st January to 31st December, accordingly Accounts enclosed are only for the full year i.e. from 1st Jan 2012 to 31st December 2012.

PUBLIC FIXED DEPOSIT

During the financial year, the company has not accepted any deposits from Public under section 58A of the Companies Act, 1956.

DIRECTORS

Inaccordance with the provisions of section 256 of the Companies Act, 1956 and Article of Association of the company, Mr. Rajiv Mehrotra, Mr. Alok Tandon and Mr. Arun Kumar, Directors of the company, retire by rotation at the ensuing Annual General Meeting and be eligible, offer themselves for re-appointment. Their brief profile has been provided in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provision of section 217(2AA) of the Companies Act, 1956, your directors confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with the proper explanation relating to material departure wherever necessary;

ii) The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the company at the end of financial year 2012-2013 and of the profit/ loss of the company for the year ended as on that date;

iii) The Directors had taken proper and sufficient care for the maintenance of adequate Accounting Records in the accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the Annual Accounts on a going concern basis.

AUDITORS

M/S Mehra Goel and Co. Chartered Accountants, the retiring Auditors of your company expressed their willingness to continue as Auditors, if re- appointed at the Annual General Meeting to hold the office until the conclusion of the next Annual General Meeting. The company has received from the Auditors a certificate to this effect that their appointment, if made, would be within the prescribed limit under section 224(1-B) of the Companies Act, 1956.

AUDITOR''S REPORT AND CLARIFICATION

The notes to the accounts in Auditors'' Report are self explanatory.

COST AUDITOR

The Company has appointed M/s K.G Goyal and Associates as Cost accountants on the recommendations of the Audit and Finance committee. M/s K.G Goyal and Associates has confirmed their independence and arms length relation with the company and their eligibility under section 224 (1B), 233B and 226 of the Companies act 1956 for the year 2013-2014.

CORPORATE SOCIAL RESPONSIBILITY Your Company endeavours to grow its business in a socially and environmentally responsible way, while upholding the interest of the stakeholders. The company also believes in taking an active role and responsibility in helping NGO''s and other charitable institutions.

In the tragedy caused by the catastrophic flood which devastated the whole Uttarakhand state, Your Company participated in the Rescue Operations whole heartedly and vigorously. Besides Financial help, Members of Shyam family came forward and strove physically with material like blankets, bottled water, biscuits, candles, milk powder, woolen clothes (collected from Shyam family and Associates) to distribute and deliver personally. An Ashram in Rishikesh, where thousands of people got stranded, your company extended physical and financial help to them. The sole endeavor was to reach to needy and aggrieved with help. Your company places its condolences for those who lost their lives and properties in the unfortunate abysmal happening. Your company is cautious, participating, committed and responsible corporate citizen of the society. The company shows an exceptional caution in use of paper (as duplex printing is the standard setting for all printer and copiers). No paper is trashed unless it has been used both the sides. The company is conscious and committed towards its social responsibility.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to conservation of energy, as required under section 217 (1) (e) of the Companies Act, 1956 read with the companies (Disclosure of Particulars in the report of Board of Directors) Rule, 1988, is annexed and form the part of this Report.

PARTICULARS OF THE EMPLOYEES In compliance with provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rule 1975, statement of particulars of employees has not been given as none of employee during the financial year drew remuneration more than Rs. 5 Lacs per month or Rs. 60 Lacs per annum.

INDUSTRIAL RELATIONS

Relation with the Employees remain cordial and your Directors wish to place on record their appreciation of the co-operation and contribution made by the employees at all levels.

CORPORATE GOVERNANCE

A Report on Corporate Governance as required under Clause 49 of the Listing Agreement, as applicable, form the part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis as required under clause 49 of the Listing Agreement, as applicable, form the part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21, Audited Consolidated Financial statements have been attached which form the part of this report and accounts.

COMPOSITION OF AUDIT & FINANCE COMMITTEE

Disclosure pursuant to the provisions of section 292A of the Companies Act, 1956, the Audit & Finance Committee of the company consists of:

Mr. Achintya Karati - Independent Director & Chairman

Mr. Vinod Juneja - Independent Director & Member

Mr. Narendra Kumbhat - Independent Director & Member

Mr. Praveen Kumar Bhatia - Independent Director & Member

Mr. C.S.Malhotra - Independent Director & Member

Mr. Arun Khanna - Non Executive Director & Member

Mr. Dharmender Dhingra - Vice President (Legal) & Company Secretary.

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude the co-operation received from bankers, Centeral and State Government Departments, Local Authorities and Customer for their continued guidance and support.

Your Directors also convey their gratitude to the Shareholders, Statutory Auditors, Cost Auditors and Employees of the company for their commitment and support which has contributed to the growth and success of the company.

On Behalf of the Board of Directors of

SHYAM TELECOM LIMITED

Sd/-

PLACE : New Delhi RAJIV MEHROTRA

DATE : 25th May, 2013 Chairman & Managing Director

---

Mar 31, 2012

The Directors have immense pleasure in presenting their Nineteenth Annual Report on the business and operations of the company together with the Audited Financial statements and Accounts for the year ended 31st March, 2012.

TELECOM INDUSTRY - AN OVERVIEW

India is the world's second largest telecom market in terms of subscribers. There are more than a dozen players in GSM/CDMA industry entailing a fierce competition thereby causing lowest call rates not only in India but in world.

The telecom industry was bludgeoned by the verdict of Honorable Supreme Court-122 licenses were cancelled. This verdict shook up India fragmented telecom market necessitating consolidation in this industry. It is also estimated that 75 million mobile users across the countries would be affected henceforth.

Strategic and structural changes like Spectrum linked to the market prices and being auctioned again which effectually would increase the call rates and post cancellation as ordered by Honorable Supreme Court, the existing operators seem to benefit.

The Indian Telecom Industry is one of the fastest growing industry in the world but the current teledensity is still low in rural areas.

The total telephone subscribers (including wireless and wire line) are 951.34 million at the end of financial year 2012, the overall density in India has reached to 78.66. The urban teledensity is 169.55 and rural teledensity is 39.22. As evident from above its important to note that there is a huge untapped potential in rural India.

The one billion mark also appears to be achievable. The penetration of internet and broadband has also improved with 20.99 million internet subscribers and 13.30 million broadband subscribers across the country. The future progress of telecommunication in our country is very encouraging as operators have started rolling out the wireless broadband networks in the country and soon the services are expected to be available in the entire country.

Broadband connectivity is increasingly being seen as an integral driver of improved socio-economic performance. The Indian Government strongly believes that all citizens of the country should have access to broadband and the transformative opportunities. Broadband services empower masses. They allow individuals to access new career and educational opportunities, they help businesses reach new markets and improve efficiency and they enhance the Government's capacity to deliver critical services like health, banking and commerce to all of its citizens.

Provision of Broadband in rural and remote areas will also help in bridging the "digital divide" and the widespread adoption of broadband in rural areas will have a multiplier effect over the long-term. It will help improve productivity in rural areas, help overcome the constraints of an inadequate transport infrastructure and overall improve the quality of life in rural areas. Given the significant economic and social benefits, expanding affordable access to broadband has become a high priority for the Government. The development of a robust broadband ecosystem will be the key to meet Government's objectives. It is a known fact that wireless is the quickest and most efficient medium to provide broadband services in the access network. To ensure broadband coverage, the Government has approved a project for creation of a National Optical Fiber Network (NOFN) for providing broadband connectivity to 2.5 lakh Village Panchayats. The 3G and BWA auctions that took place last year are expected to act as catalysts for enabling internet access to even the remotest parts of India. Indian Telecom market is on the cusp of an "Information Revolution".

The changing demographic profile of India has also played an important role in subscriber growth. The changed profile is characterized by a large young population, a burgeoning middle class with growing disposable income, urbanization, increasing literacy levels and higher adaptability to technology. These new features have multiplied the need to be connected always and to own a wireless phone and therefore, in present times mobiles are perceived as a utility rather than a luxury.

EXPORTS

Your Company is exporting telecommunication products and system to various countries worldwide.

Your Company has done some major exports to the New Markets which includes Lebanon, Mozambique, Zanzibar, Costa Rica, Bolivia, Australia, Sri Lanka etc. The Export revenue is growing on yearly basis. In the recent past the Company has completed some major in- building projects in different countries. The Company has taken Turnkey Projects in many countries, which includes the survey, planning, installation, commissioning etc. The products are being sold to more than 100 operators in 40 countries. We have also appointed more than 50 Agents/Distributors/Value Added Resellers in many countries. In the recent past we have been short listed as a preferred supplier for many operators in Europe, Africa, and Latin America etc. The product was recently approved by one of the biggest operators in USA i.e. Verizon. We are expecting many orders from the North and South America.

FOREIGN DIRECT INVESTMENT

The consolidated foreign direct investment (FDI) policy of India 2012 has been announced and it has brought many far reaching changes and reforms. FDI in the licensee company/Indian promoters/investment companies including their holding

companies shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall ceiling of 74 percent. The investment up to 49% is through Automatic Entry Route but beyond it, the approval of FIPB is required, While approving the investment proposals, FIPB takes note that investment is not coming from countries of concern and/or unfriendly entities.

Telecom is considered to be highly potential for investments and upcoming industries. The Investments in telecom equipment manufacturing is allowed up to 100% and entry route is fully automatic but subject to sectoral caps.

FUTURE OF TELECOM

The Indian telecom sector has proved to be an international success story. The success has witnessed a commendable growth over the past couple of years within overall subscriber base 951.34 million and teledensity of 78.66. The sector continues to leapfrog from strength to strength with the urban teledensity reaching 169.55. The market has been showing signs of maturity.

The telecom industry is geared up to drive the next round of growth particularly with voice based services. It is envisaged that the 3G and BWA are expected to reinvigorate the maturing urban market and would help in bringing balance growth of the economy.

The phenomenal growth observed in mobile services is yet to be replicated in broadband and other related services where the subscriber base is quiet low. Other area on which majority of players in this industry are concentrating is the rural India where enormous untapped potential exists.

With the advent of new generation technologies & products, operators are looking out aggressively to roll out 3G & broadband wireless access services. The demand for telecom equipments has contemplated increased to cease such surfacing opportunities. Even government is also coming out with such conducive policies to support and give impetus manufacturing industries. With all around efforts from being an import centric industry, it is becoming a global telecom manufacturing hub. The road map of its growth is being travelled by setting up domestic manufacturing facilities by Indian Companies along with Multinational Companies. All the big players-Multinational Companies like Nokia, Alcatel, Motorola, LG Electronics, Samsung etc. have already set up their production facilities in the country and many more are planning to set up.

COMPANY'S OVERVIEW

Your company is a leading global telecom manufacturer supplying indoor and outdoor wireless signal enhancement solution for more than 100 networks in 5 continents. Your company designs and manufactures cost effective RF Repeaters, Optical distributive antenna solutions, IP Cellular backhauls systems

and signals enhancement accessories that enable mobile operators, real estate developers, neutral host providers and provide seamless wireless coverage within their network. Besides manufacturing we are also in trading of CDMA handsets, data cards and accessories. Substantial turnover from these handsets and accessories contributes to the top line of the company.

The company import these mobile handsets and accessories from world renowned suppliers like LG, Samsung, ZTE, and HUAWEI. The company is also planning to add a range of new handsets and accessories in the market in the coming years.

Despite of concern and cautious approach prevailing in the telecom industry, post cancellation of licenses, your company has still been trading handsets and accessories with growth levels. There is a freeze of capital expenditure being observed by Telecom Industry as a whole but your company has products which can help operators to enhance their existing networks to achieve optimum efficiency with very low costs. But if the licenses are not restored the business of the company may get severely affected.

The company got FCC certification for its 43dBm Repeater and also launched its IP based software feature which will fasten the application of products and make it more user friendly.

The company is currently working on Ethernet based RF & Optical Repeaters products and will be launching the same in the FY 2012-13.

Your company has been instrumental in translating the requirements of the operators by using the products of the company like RF Repeaters, Optical Das, IP Backhaul, etc. with minimum capital expenditure and maximum network optimization.

FINANCIAL PERFORMANCE

(Rupees in Lacs)

Financial Financial PARTICULARS Year Year 2011-2012 2010-2011

Sales and Services 79975.15 68315.02

Profit before Tax and Exceptional Items 825.55 376.20

Exceptional Items 339.75 -

Profit before Tax 485.80 376.20

Provisions for Income Tax :

- Current Tax 240.00 90.12

- Deferred Tax (69.49) (48.60)

MAT Credit available for set off - 12.92

Income Tax/Deferred Tax for earlier year 40.92 (60.14)

Profit After Tax 274.37 381.90

OPERATIONS

During the period under review your company has registered a turnover of Rs. 799.75 crore against Rs. 683.15 crore in the year 2010-2011. A net profit of Rs. 2.74 Crore has been made during this period as against a profit of Rs. 3.82 crore in the previous year. The year to year increase in the turnover is 17.07 percent. The reduction in the net profit is due to an exceptional expenses of Rs. 3.40 crore (explained in the Other Notes to Accounts) has been charged to the revenue.

DIVIDEND

The Board considering prudent to conserve resources for investment in business regrets its inability to recommend any dividend for the year ended 31st March, 2012.

SUBSIDIARY

The Company has only one subsidiary viz. Shyam Telecom Inc, USA and therefore as per section 212 of the Companies Act, 1956, the report and Audited Accounts of the subsidiary company along with the statement from the part of Annual Report. The subsidiary being near to the customer is able to provide the end to end support to the customers. The subsidiary has appointed the local manpower so that it can fully understand the customer requirement and can provide the best solutions. Subsidiary also provides the logistic benefits which helps in quick delivery of products at the customer end.

There has been a change in the financial year of the subsidiary as it observed financial year commencing from 1st January to 31st December. Accordingly, accounts enclosed are for the period from 1st Jan 2011 to 31st December, 2011.

PUBLIC FIXED DEPOSIT

The company has not accepted deposits from Public under section 58A of the Companies Act, 1956.

DIRECTORS

In accordance with the provisions of section 256 of the Companies Act, 1956 and Article of Association of the company, Mr. Ajay Khanna, Mr. Achintya Karati and Mr. Praveen Kumar Bhatia, Directors of the company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Their brief profile has been stated in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provision of section 217(2AA) of the Companies Act, 1956, your directors confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with the proper explanation relating to material departure wherever necessary;

ii) The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the company at the end of financial year 2011-2012 and of the profit/loss of the company for the year ended as on that date;

iii) The Directors had taken proper and sufficient care for the maintenance of adequate Accounting Records in the accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the Annual Accounts on a going concern basis.

AUDITORS

M/S. Mehra Goel and Co. Chartered Accountants, the retiring Auditors of your company expressed their willingness to continue as Auditors, if re-appointed at the Annual General Meeting to hold the office until the conclusion of the next Annual General Meeting. The company has received from the Auditors a certificate to this effect that their appointment, if made, would be within the prescribed limit under section 224(1-B) of the Companies Act, 1956.

AUDITORS' REPORT AND CERTIFICATION

The notes to the accounts in Auditors' Report are self explanatory except the following whereby management response to qualification/observations made in Annexure to the Auditors' Report is stated as under.

Point 9 of Annexure to Auditors Report The delays are very nominal and were due to delay in assimilation and compilations of data from some branches. However delays were regularised at the earliest.

COST AUDITOR

The Company has appointed M/s. K.G. Goyal and Associates as Cost Accountants on the recommendations of the Audit and Finance Committee. M/s. K.G. Goyal and Associates has confirmed their independence and arms length relation with the company and their eligibility under section 224 (1B), 233 B and 226 of the Companies Act, 1956 for the year 2012-13.

CORPORATE SOCIAL RESPONSIBILITY Your Company endeavours to grow its business in a socially and environmentally responsible way, while upholding the interest of the stakeholders. The company also believes in taking an active role and responsibility in helping NGO's and other Charitable Institutions.

The Company shows an exceptional caution in use of paper (as duplex printing is the standard setting for all printers and copiers). No paper is trashed unless it has been used both sides. The Company is conscious and committed towards its social responsibility.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to conservation of energy, as required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rule, 1988, is annexed and form the part of this Report.

PARTICULARS OF EMPLOYEES

In compliance with provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rule 1975, statement of particulars of employees has not been given as none of employee during the financial year drew remuneration more than Rs. 5 Lacs per month or Rs. 60 Lacs per annum.

INDUSTRIAL RELATIONS

Relation with the Employees remain cordial and your Directors wish to place on record their appreciation of the co-operation and contribution made by the employees at all levels.

CORPORATE GOVERNANCE

A Report on Corporate Governance as required under Clause 49 of the Listing Agreement, as applicable, form the part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on Management Discussion and Analysis as required under clause 49 of the Listing Agreement, as applicable, form the part of this report.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the Accounting Standard 21, Audited Consolidated Financial statements have been attached which form the part of this report and accounts.

COMPOSITION OF AUDIT & FINANCE COMMITTEE

Disclosure pursuant to the provisions of section 292A of the Companies Act, 1956, the Audit & Finance Committee of the company consists of:

Mr. Achintya Karati - Independent Director & Chairman

Mr. Vinod Juneja - Independent Director & Member

Mr. Narendra Kumbhat - Independent Director & Member

Mr. Praveen Kumar Bhatia - Independent Director & Member

Mr. C. S. Malhotra - Independent Director & Member

Mr. Arun Khanna - Non Executive Director & Member

Mr. Dharmender Dhingra - Vice President (Legal) & Company Secretary.

ACKNOWLEDGEMENT

Your Directors acknowledge with gratitude the co-operation received from bankers, Central and State Government Departments, Local Authorities and Customer for their continued guidance and support.

Your Directors also convey their gratitude to the Shareholders, Statutory Auditors and Employees of the company for their commitment and support which has contributed to the growth and success of the company.

On Behalf of the Board of Directors of SHYAM TELECOM LIMITED

Sd/- Sd/-

AJAY KHANNA ALOK TANDON Managing Director Managing Director

PLACE: NEW DELHI DATE : 9th August, 2012

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Mar 31, 2010

The Directors have immense pleasure in presenting their Seventeenth Annual Report together with the Audited Accounts for the year ended 31st March, 2010.

TELECOM INDUSTRY IN INDIA

AN OVERVIEW

The telecom services have been recognized the world-over as an important tool for socioeconomic development of a nation. Telecommunication is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. It has become especially important in recent years because of enormous growth of information technology and its significant potential for the impact on the rest of the economy. The Telecom Sector, which has the multiplier effect on the economy, has a vital role to play in economy by way of contributing to the increased efficiency. The available studies suggest that income of business entities and households increases by the use of telecom services. Thus it contributes to the growth in GDP.

Indian Telecom is more than 168 years old, beginning with the commissioning of the first telegraph line between Kolkata and Diamond Harbour in 1839. In 1948, India had only 0.10 million telephone connections with a telephone density of about 0.02 telephones per hundred population. In recent times, country has emerged as one of the fastest growing telecom markets in the world. Indian telecom still continues to register a significant growth in the current fiscal year. Indian telecom network has about 562.21 million connections as on 31st December, 2009. With 525.15 million wireless connections, Indian telecom has become the second largest wireless network in the world after China. Overall teledensity has reached around 47.88%. Urban teledensity crossed 100% mark whereas rural teledensity is at 21.19% which is also steadily increasing. Broadband connections have increased to 7.98 million by December 31, 2009.

The future progress of telecom in our country is very encouraging. The current addition of about 15 million connections per month puts the telecom sector on strong footing. The target of 500 million connections by 2010 has been achieved in September 2009 itself. Approximately 94% of the eleventh plan target of 600 million connections has already been achieved at the half-way point.

This boom in the telecom sector has slowly and steadily paved the way for another industry: the telecom equipment manufacturing industry. Indian telecom industry manufactures a complete range of telecom equipment using state of art technology. Considering the growth of telecom, there are excellent opportunities for domestic and foreign investors in manufacturing sector. The last five years saw many renowned telecom companies setting up their manufacturing base in India. The production of telecom equipments in value terms has increased from Rs. 412700 million (2007-08) to Rs.488000 million during 2008-09 and expected to increase to Rs. 575840 million during 2009-10.

The total number of telephones stands at 562.21 million as on 31st December, 2009 showing addition of 132.49 million during the period from March to December of 2009. Wireless Telephone connections have contributed to this growth as the number of wireless connections rose from 3.57 million in March 2001 to 13.29 million in 2003, 101.86 million in March 2006, 391.76 million in March 2009 and 525.15 million as on 31st December, 2009. The wireline has shown increase from 32.70 million in 2001 to 41.42 million in March 2005 but then started declining to 40.22 million in March 2006, 37.96 million in March 2009 and 37.06 million as on 31st December, 2009. Therefore, the share of wireless telephones as on 31st December, 2009 is above 93% of the total phones. The share of private sector in total telephone is about 82.33%.

The Department of Telecommunications has set a target of 1.1 billion subscribers by 2015. To meet this target by 2015 and to meet the demand created by the telecom services sector, it is said telecom equipment worth Rs. 3,500,000 million – Rs. 5,000,000 million will be required by 2015.

India is without question one of the most compelling emerging telecom markets in the world. Due to its low-cost, high-quality networks and innovative marketing, the country is a model of efficiency in global telecom. Vendors working in India believe that their presence there and relationship with Indian companies will eventually benefit all of their customers globally. Multinationals are increasingly taking notice of India beyond just its talent pool and viewing it as a key proving and development ground for their R&D efforts.

* Exports

Exports increased from Rs. 4020 million in 2002-03 to Rs. 1,10,000 million in 2008-09 accounting for 21 per cent of the total equipment produced in the country and further expected to increase to Rs. 132,500 million during 2009-10.

* Foreign Direct Investment

The liberalization in financial sector has also given beneficial results in telecom sector. Liberalization with allowing entry to the private firms has resulted in unprecedented growth in telecom sector. Allowing greater participation of foreign investor has helped in growth of the sector. Today, telecom is the third major sector attracting FDI inflows after services and computer software sector. At present 74% to 100% FDI is permitted for various telecom services. This investment has helped telecom sector to grow. The total FDI equity inflows in telecom sector have been US$ 2223 million during April-November 2009-10.

* Research & Development

C-DoT, an autonomous society under DoT, is carrying out Research & Development for areas of national importance in Telecommunication. C-DoT is working on various developmental projects like Shared Global System of Mobile Communication Radio Access Network (SG-RAN) for rural India, upgradation of legacy switches to Next Generation services for North Eastern region, communication monitoring systems, secure dedicated communication networks, broadband service delivery platforms like Gigabit Passive Optical (GPON) systems.

The projects like SGRAN & GPON are expected to give an impetus to indigenous manufacturing. A large number of companies like Alcatel, Cisco etc. have also set up their research & development (R&D) centers in India.

STRENGHTS OF INDUSTRY

India has all the makings of a globally competitive telecom manufacturing and R&D destination. This is evident from:

* A large and booming domestic market with Indian operators reaching out to the global market providing wider access to Indian telecom companies.

* Strong management experience in critical functions such as SCM, high tech manufacturing systems, working capital management, value chain with EMS companies, captive facilities of MNCs (willing to invest further in India), auxiliary component manufacturing base (e.g., for cables, cabinets, shelves, power electronics, tooling, bare PCBs, etc.).

* Strong technical and R&D workforce having experience in R&D centers of MNC companies, IT service companies doing telecom projects, strong academic and research labs and an increasing number of Indians who are returning back from USA/Europe.

* Skilled & trained shop floor workforce for electronics circuit assembly, testing and integration from widely available resources from Industrial Training Institutes and Polytechnics.

* Cost advantage arising from lower manufacturing plant establishment cost and competitive labor costs.

* Availability of capital from a well established financing industry as well as private equity network.

* Exports growth at 25 percent CAGR over next 5 years, reaching over USD 10 Billion.

* Domestic telecom products growth of 18 percent CAGR over next 5 years.

* Employment generation (direct and in-direct) of 20 million

* At least 70 percent of Indian domestic telecom needs are met by products manufactured in India.

* Handset and other Data Products imports and manufacturing has become a very big market in India. India is the largest importer of Handsets & Data Products in the world.

COMPANY’S OVERVIEW

Your company is a complete telecom solution provider. Your company offers an entire suite of both in-build and outdoor Repeater and DAS Products. Your company offers a wide range of band selective repeaters from low power up to very high power available in a single and dual band version allowing any frequency combination in GSM/DCS, GSM/CDMA, DCS/CDMA with support up to 6 sub bands.

Your company also deals in In- building solutions & state of the art Turnkey projects. The company has penetrated the GSM & CDMA markets. The company is first one to get the products TEC Certified.

Your company has been a proven supplier of the Telecom Equipment to Telecom Equipment Manufacturers like Huawei, Ericsson, Nokia, ZTE, etc. and Telecom Service Providers like Vodafone, MTS, Idea, etc. Service providers are going big way in In-Building solution where your company is one of the leading solution providers.

In International Market, your Company has marked its presence in Asia Pacific, USA, Europe and Russia. The Company has also been successful in procuring big orders from Latin America for repeaters. Your Company also got the product approved from operators in North & South America and is also testing various products with major operators in Europe. The future plans of your company include development of new Repeaters with advanced technologies and Repeaters with Single Chip Solution. The company is currently working on the advance software feature which will help the products to become user friendly.

The major contribution to the top line is from dealing in CDMA Handsets and Accessories. We are the single supplier of Handsets and Accessories for the retail market for MTS and are actively working with other Service Providers on the same line. The company is importing these from the top handset manufactures of the world like LG, Samsung, ZTE, etc. The company would be introducing a range of new handsets and accessories in the market for MTS in the coming years.

FINANCIAL PERFORMANCE

(Rupees in Lacs) Financial Financial

PARTICULARS Year Year

2009-2010 2008-2009

Sales and Services 29329.75 18943.74 Profit before Tax &

Extraordinary Items (655.90) 80.73

Provision for Income Tax

Current Tax - 12.92

Deferred Tax (209.18) 0.78

MAT Credit available for set-off - (12.92)

Wealth Tax 1.07 0.93

Fringe Benefit Tax - 35.90

Income Tax for earlier year - 23.48

Extraordinary Item -

Profit on sale of Land (Net of Taxes) - 56.27

Profit after Tax &

Extraordinary Items (447.79) 75.91

OPERATIONS

During the period under review your company has registered a turnover of Rs. 29329.75 Lacs against Rs. 18943.74 Lacs in the year 2008-09. A net loss of Rs. 447.79 Lacs was incurred during this period as against a net profit of Rs.75.91 Lacs in the previous period. The loss has been incurred on the grounds of business promotion expenses and write-off’s.

EXPORTS

Your Company is exporting Telecommunication products and system to various countries worldwide.

The Export revenue is growing on yearly basis. In the recent past the company has completed some major In-building projects in different countries. The Company has taken Turnkey Projects worldwide, which include the survey, planning, installation, commissioning etc. The products are being sold to more than 100 operators in 40 countries. We have appointed more than 50 Agents/ Distributors/ Value Added Resellers worldwide. In the recent past we have been short listed as a preferred supplier for many operators in Europe, Africa, Latin America, etc.

The product was approved and the company has got the big order by one of the biggest operator in USA i.e. Verizon Wireless.

DIVIDEND

The Board is considering prudent to conserve resources for investments in business, therefore regrets its inability to recommend any dividend for the year ended 31st March, 2010.

SUBSIDIARY

The Company has only one subsidiary viz., Shyam Telecom Inc, USA and therefore as per Section 212 of the Companies Act, 1956, the Reports and Audited Accounts of the subsidiary company along with the statement form the part of Annual Report.

PUBLIC FIXED DEPOSIT

The Company has not accepted deposits from Public under Section 58A of the Companies Act, 1956.

DIRECTORS

In accordance with the provisions of Section 256 of the Companies Act, 1956 and Article 86 of the Articles of Association of the Company, Mr. Rajiv Mehrotra, Mr. Alok Tandon and Mr. Arun Khanna, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Their brief profile has been stated in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provision of Section 217(2AA) of the Companies Act, 1956, your directors confirm that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures wherever necessary.

ii) The Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of financial year 2009-10 and of the profit of the company for the year ended on that date.

iii) The Directors had taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the Annual Accounts on a going concern basis.

AUDITORS

M/s Mehra Goel & Co., Chartered Accountants, the retiring Auditors of your company expressed their willingness to continue as auditors, if re- appointed at the Annual General Meeting to hold the office until the conclusion of the next Annual General Meeting. The Company has received from the Auditors a certificate to this effect that their appointment, if made, would be within the prescribed limit under Section 224(1-B) of the Companies Act, 1956.

AUDITORS REPORT AND CLARIFICATION The notes to the accounts in Auditor’s Report are self- explanatory and no further explanation is considered necessary.

PARTICULARS OF CONSERVATION OF ENERGY, ABSORPTION OF TECHNOLOGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to conservation of energy, as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed and form the part of this Report.

PARTICULARS OF THE EMPLOYEES

In compliance with the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, statement of particulars of employees is annexed hereto and forms the part of this report.

INDUSTRIAL RELATIONS

Relations with the Employees remain cordial and your Directors wish to place on record their appreciation of the co-operation and contribution made by the employees at all levels.

CORPORATE GOVERNANCE

A Report on Corporate Governance as required under Clause 49 of the Listing Agreement, as applicable, form the part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS A report on Management Discussion and Analysis as required under Clause 49 of the Listing Agreement, as applicable, form the part of this report.

CONSOLIDATED FINANCIAL STATEMENTS In accordance with Accounting Standard 21, Audited Consolidated Financial Statements have been attached which form the part of this report & accounts.

COMPOSITION OF AUDIT & FINANCE COMMITTEE

Disclosure pursuant to the provisions of Section 292A of the Companies Act, 1956, the Audit & Finance Committee of the Company consists of:

Mr. Achintya Karati - Independent Director & Chairman

Mr. Narendra Kumbhat - Independent Director & Member

M r. Ravikant Jaipuria - Independent Director & Member

Dr. Vinod Juneja - Independent Director & Member

Mr. Praveen K. Bhatia - Independent Director & Member

Mr. C.S. Malhotra - Independent Director & Member

Mr. Arun Khanna - Non Executive Director & Member

Mr. Dharmender Dhingra - Vice President (Legal) & Company Secretary

ACKNOWLEDGMENT

Your Directors acknowledge with gratitude the co-operation received from Bankers, Central and State Government Departments, Local Authorities and Customers abroad for their continued guidance and support.

Your Directors also convey their gratitude to the Shareholders, Statutory Auditors and Employees of the company for their commitment and support which has contributed to the growth and success of the company.



On Behalf of the Board of Directors of

SHYAM TELECOM LIMITED

PLACE: NEW DELHI

DATE : 30th July, 2010

Sd/-

RAJIV MEHROTRA

Chairman & Managing Director