s c tamil nadu telecommunications ltd.promoter shareholding 63.63 63.63 63.63 • no new equity...

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STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SECTOR: CABLES REPORTING DATE: 14TH AUGUST, 2017

TAMILNADU TELECOMMUNICATION LTD. www.ttlofc.in

Tamil Nadu Telecommunications Ltd. NSE Code - TNTELE TABLE 1 - MARKET DATA (STANDALONE) (AS ON 9TH AUGUST, 2017)

Sector - Cables NSE Market Price (`) 2.20 NSE Market Cap. (₹ Cr.) 10.05

Face Value (`) 10.00 Equity (` Cr.) 45.68

Business Group - Govt. of India 52 week High/Low (₹) 4.20/1.85 Net worth (₹ Cr.) * (62.45)

Year of Incorporation - 1988 TTM P/E (TTM) N.A. Traded Volume (Shares) 1,500

TTM P/BV N.A. Traded Volume (lacs) 0.03

Registered Office Source - Capitaline, TTM - Trailing Twelve Month, N.A. - Not Applicable *As on 30th September, 2016

No 16, 1st Floor, Aziz Mulk, COMPANY BACKGROUND

3rd Street, Thousand Lights, Tamil Nadu Telecommunications Ltd is a Government of India Enterprises. The Company is

engaged in the manufacture of telephone cables. The Company's products include

telecommunication grade optical fiber cables, ribbon cable, composite cables, self supporting

aerial optical fiber cable, armored optical fiber cable and metal free optical fiber cable. The

company is an ISO 9001 certified company, having their optical fibre cable manufacturing

facility at M.M. Nagar. Their clients include BSNL, Tata Teleservices, Indian Railways, Reliance

Infocom, AIRCEL, hathway and Power Grid Corporation of India Ltd.

Tamil Nadu Telecommunications Ltd was incorporated on May 13, 1988 as a public limited

company. The company was set up as a joint venture between Telecommunications

Consultants India Ltd, Tamilnadu Industrial Development Corporation Ltd and Fujikura Ltd of

Japan. In the year 1998, the company embarked upon diversification of their products range

with the manufacture of the state-of-art optical fiber cables, in technical collaboration with

Fujikura Ltd of Japan.

Chennai – 600 006,

Tamil Nadu

Company Website:

www.ttlofc.in

Revenue and Profit Performance

The revenue of the Company increased from ₹ 0.22 crores to ₹

0.61 crores from quarter ending Sep’15 to quarter ending Sep’16.

The Company made a loss of ₹ 4.40 crores in quarter ending

Sep’16 vis-a-vis making a loss of ₹ 3.58 crores in quarter ending

Sep’15.

Source: Moneycontrol

Performance vis-à-vis Market

TABLE 2- Returns

1-m 3-m 6-m 12-m

Tamil Nadu Tele. Ltd 0.00% -25.00% -34.33% -21.43%

Nifty 0.22% 3.99% 13.56% 14.89%

Source: Capitaline/ NSE

0.00

0.50

1.00

1.50

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

Tamil Nadu Telecommunications Ltd NIFTY

0.611.57

0.22

-4.40-5.14

-3.58

-6

-4

-2

0

2

Sep'16 Mar'16 Sep'15

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

http://www.ttlofc.in/




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TABLE 3 – FINANCIALS

(₹ Cr.) Sep’16 Mar’16 Sep’15 % Change

Sep ’16 vs Mar’16 Mar’16 vs Sep’15

Net Worth -62.45 -53.50 -44.75 N.A. N.A.

Current Assets 14.99 24.00 29.17 -37.56% -17.72%

Non-Current Assets 9.71 9.87 10.06 -1.59% -1.89%

Total Assets 24.70 33.87 39.23 -27.08% -13.66%

Investments - - - - -

Finance Cost 2.09 1.93 2.11 8.29% -8.53%

Long Term Liabilities 2.53 2.27 2.37 11.23% -4.22%

Current Liabilities 84.62 85.10 81.61 -0.56% 4.28%

Turnover 0.58 1.57 0.20 -63.06% 685.00%

Profit After Tax (PAT) -4.40 -5.14 -3.58 N.A. N.A.

EPS (₹) -0.96 -1.13 -0.78 N.A. N.A.

Source - Money Control/Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Auditors have not made any qualifications in last 3 years viz. FY 2015-16, FY 2014-15 &

FY 2013-14.

However, the Auditors have drawn attention to the following Emphasis of Matter in FY 2015-16:

“Without qualifying our conclusion, we draw, attention to S. No - 3– Note – 25 - Notes to Accounts. As at 31st March 2016, the

Company’s accumulated losses of ₹ 10,996.11 Lakhs has eroded the Net Worth of the Company, indicating the existence of

material uncertainty that may cast a doubt about the Company’s ability to continue as a Going Concern. The Company has

incurred a loss of ₹ 1,595.42 Lakhs for the year under audit. Based on the mitigating factors discussed in the said note, the

Management believes that the Going Concern assumption is appropriate.”

Management reply for the above Emphasis of Matter:

“As mentioned in Note no. 3, The requirement of OFC in the country is huge; however, the delay in procurement is due to various

procedural matters/issues in execution of big projects by the Government Clients. The Company is hoping to get continuous

orders from 2016-17 onwards regularly since the OFC market is picking up. The order booking position is expected to be

continuously good. Considering the scope during the immediate future and TCIL’s continuous financial support, the accounts

have been prepared on going concern basis.”

Other Matters:

• “The Deferred Tax Asset has not been provided for, in the books of account, considering the absence of virtual certainty of

earning profits and prudence concept.

• Item no (vii)(a) of the Annexure to the Independent Auditor’s Report the Company has been generally regular in depositing

with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of

Excise, Duty of Customs, Value added Tax, Cess and other statutory dues with the appropriate authorities during the year as

applicable to it except the Property Tax amounting to Rs.40,34,250/-. We are informed by the Company that efforts are

made to get exemption being a sick Company. We are also informed that there are no employees who are eligible to be

covered under Employees State Insurance scheme.”

Management reply:

• “The Company has disclosed the facts of non-provisioning for deferred tax assets / liabilities vide Note no. 6(b) under “25.

Notes to Accounts”.

• With reference to clause 11.5.3 of the Sanctioned Scheme issued to the company by BIFR, the company had requested and

continuously insisting the concerned authority for waiver of the Property Tax of the past and during the rehabilitation period.

No positive reply from the authority is received. However, provision has been made in the books of accounts every year and

part amount remitted during the year 2014-15. Continuously pursuing for waiver of the balance dues. On waiver, the liability




3 | P A G E



will be reversed accordingly.”

Response Comment

Frequency of Qualifications Not Applicable

Have the Auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? Not Applicable* -

Do the financial statements include material unaudited financial statements? Not Applicable* -

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

TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT 2015-16)

Regulatory Norms Company

% of Independent Directors on the Board 50% 14%

% of Promoter Directors on the Board - 86%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - Yes

Average attendance of Directors in the Board meetings (%) - 78.79%

Composition of Board: As per Regulation 17(1)(b) of the Listing Regulations, 2015, the Company should have at least 50%

Independent Directors as the Chairman of the Board is a Promoter/Executive Director. The Company has 14% of Independent

Directors and hence, it does not meet the regulatory requirement.

Management Reply with regards to Board Composition:

The Company is Joint Sector Govt. Company with 49% of its shares held by TCIL, a Govt. of India Enterprise and 14.63% held by

TIDCO, a Govt of Tamilnadu Enterprise. The Board as well as management control of the Company lies with TCIL. Being a Govt.

Company, action already taken for induction of Independent Directors in the Board of the Company through TCIL with the Dept.

of Telecommunications, Ministry of Telecommunications & IT. The same is being followed up through TCIL for early

appointment.

Board Diversity: The Company has 7 directors out of which 6 are male and 1 is female.




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TABLE 5 - FINANCIAL RATIOS

Ratios Sep’16 Mar’16 Sep’15

% Change

Sep ’16 vs

Mar’16

Mar’16 vs

Sep’15

Turn

ove

r

Rat

ios

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

Debtors Turnover 0.06 0.13 0.01 -56.35% 841.87%

Fixed asset Turnover 0.06 0.16 0.02 -62.46% 700.11%

Current Asset Turnover 0.04 0.07 0.01 -40.83% 854.10%

Ret

urn

Rat

ios Operating Profit Margin -384.48% -200.00% -690.00% N.A. N.A.

Net Profit Margin -758.62% -327.39% -1,790.00% N.A. N.A.

Return on Assets (ROA) N.A. N.A. N.A. N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

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

Liq

uid

ity

Rat

ios

Current Ratio 0.18 0.28 0.36 -37.21% -21.10%

Quick Ratio 0.14 0.24 0.28 -41.99% -14.49%

Cash Ratio 0.02 0.10 0.10 -81.11% -4.90%

Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A.

Solv

ency

Rat

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

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

Trad

ing

Rat

ios

Market Cap / Sales 23.24 8.73 74.25 166.34% -88.25%

Market Cap/ Net Worth N.A. N.A. N.A. N.A. N.A.

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A.

Source - Money Control

TABLE 6 - TRADING VOLUME Jun’17 Dec’16 Jun’16

% Change

Jun’17 vs

Dec’16 Dec’16 vs

Jun’16

Trading Volume (shares) (avg. of 1 qtr) 927 2,672 826 -65.29% 223.66%

Trading Volume (shares) (high in 1 qtr) 10,400 16,880 5,592 -38.39% 201.86%

Trading Volume (shares) (low in 1 qtr) 1 15 1 -93.33% 1,400%

Ratio - High/low trading volume 10,400 1,125.33 5,592 824.17% -79.88%

Ratio - High/average trading volume 11.21 6.32 6.77 77.50% -6.73%

Source: Capitaline

TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

Mar'17 Sep'16 Mar'16 Comments

Shar

eho

ldin

g (%

)

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

period from Mar’ 16 to Mar’ 17.

• Promoter shareholding remains unchanged

during the above period.

• No other changes were observed in the

shareholding pattern during the said period.

• Promoters have not pledged/ encumbered

any shares.

Public - Institutional shareholding 24.02 24.02 24.02

Public - Others shareholding 12.35 12.35 12.35

Non-Promoter Non-Public

Shareholding 0.00 0.00 0.00

Source: NSE




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MAJOR SHAREHOLDERS (AS ON 31st MARCH, 2017)

S. No. Promoters Shareholding

S. No. Public Shareholders Shareholding

1 Telecommunications Cons. India Ltd. 49.00% 1 State bank of India 9.30%

2 Tamilnadu Industrial Development Corp. Ltd 14.63% 2 Andhra Bank 4.53%

3 Punjab National Bank 2.77%

Source: NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters Promoters have not sold/bought any shares in last one year

Preferential issue to promoters No preferential issue was made to promoters in last one year

Preferential issue to others No preferential issue was made to other shareholders in last one year

GDRs issued by the Company The Company did not issue any GDRs in last one year

Issue of ESOPs/Issue of shares

other than Preferential allotment

The Company does not have any ESOP Scheme. Further, no new equity shares were issued

by the Company in last one year.

Source - Annual Report 2015-16

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1 Manufacturing of Optical Fiber Cables for Telecommunications 100

Source - Annual Report 2015-16




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Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

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

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

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

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

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

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

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover




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Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



8 | P A G E



𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

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

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




9 | P A G E



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