Dear Shareholders,

We have witnessed another year of continued growth in recently concluded FY16. We made good progress across all our key objectives as set out in the previous year. Turnkey and Optic Fibre Cable (OFC) businesses both have contributed to our Growth while we made encouraging progress in our newly added business dimensions of Railways and Defence. The Company has achieved highest ever revenue of ₹2570 Crore with EBIT Margin of 6.4% and our order book stands at ₹3300 Crore approx.

We continued to leverage our expanded capacity to grow the OFC business. Having expanded our OFC capacity at Goa facility in FY15, we expanded the OFC capacity of our subsidiary company, HTL Limited in the year gone by. You will be happy to note that the Chennai facility of HTL is fully operational. An impressive growth in exports of OFC remains the highlight of the year. Our export focus is going to intensify in coming times.

I am delighted to share that our turnkey business has been successful in bagging an Advance Purchase Order (APO) of about ₹1,245 Crore from BSNL for setting up of the prestigious countrywide Telecom Transmission Network. Your Company has also emerged as the lowest bidder in one more such tender. The order book position shall get a significant boost from such positive outcomes.

We are considering to expand our telecom product bouquet beyond GSM equipment with potential addition of WiFi Systems and Optical Broadband Access Equipment (FTTx). Our telecom product and turnkey solutions segments shall both continue to drive Company’s growth in view of the Government’s thrust on transforming the country into a ‘Digital India’ on the back of a robust OFC network that addresses fast multiplying data transmission requirements.

Schemes like ‘BharatNet’ and ‘Rural Wireline Broadband Scheme’ shall fuel the demand for OFC and network installations. Need for speed and quantum jump in data consumption shall emphasise continued investments in next generation infrastructure and networks by telecom service providers, which augurs well for your Company.

On the macro-economic front, the aims of Railway Modernization, Defence Self-sufficiency, Digital Security, Make in India, Smart Cities etc. could not have been better timed than now. All these initiatives spell a bountiful of opportunities for your company, which has expanded its capability of manufacturing telecom products and has assimilated a valuable reservoir of know-how on constructing formidable telecom network across all kinds of terrains and topographies.

Having envisaged dedicated divisions to cater to emerging opportunities in Railways and Defence in the previous year, we have made good progress in FY16. Network Modernisation of Indian Railways by way of dedicated freight corridors and port connectivity remains high on Government’s priority. Ensuing Metro Rail Projects would see a multiplier growth on the back of Smart City Program. All these provide a big opportunity of Design, Supply and Execution of Telecom Network on turnkey basis for our Company. The first success in form of a ₹ 92 Crore approx order from a leading MNC adds to our confidence of extracting better results in coming times.

The convergence of country’s policy direction of strengthening the manufacturing sector as well as modernising its framework of sovereign defence is likely to catapult India as a promising destination for defence related manufacturing and assemblies. Our in-time alignment with this emerging segment has helped us earn seven Defence Production licences. Our discussions on forging technology alliances with some renowned global defence suppliers are at advanced stages.

In another synergistic move aimed at strengthening our business interest in electronic surveillance and security, we have recently increased our stake in Polixel Security Systems Private Ltd. to 94%. Polixel, now a subsidiary company of HFCL, provides surveillance and security equipment and solutions and holds a promising prospect in light of increasing thrust on Homeland Security and Smart Cities.

With all these new developments and absolute readiness of our traditional business, order book of ₹3300 Crore with tender pipeline of another ₹5000 Crore, your Company is headed to further fortify its growth prospects as formidable player in the telecom products and infrastructure development.

Our growth has been fueled by unflinching dedication, passion and hard work of our people. On behalf of the Board of Directors, I appreciate their valued contribution. I extend my sincere thanks to all other stakeholders including you, our dear shareholders, for the continued trust and patronage that we, at HFCL have always received and valued.

In continued togetherness, our march forward on the path of value creation appears smoother and surer. Let us move ahead with our agenda of strengthening the telecom network and infrastructure in India and elsewhere in the world.