ELCOT

Adding Value Through IT

FORTIETH

ANNUAL REPORT 2016-17

ELECTRONICS CORPORATION OF TAMIL NADU LIMITED, 692, ANNA SALAI, MHU COMPLEX, II ND FLOOR, NANDANAM, CHENNAI 600 035 

CONTENTS

1. General Information ---- 01

2. Notice ---- 02

3. Directors’ Report ---- 03

4. Comments of the Comptroller & Auditors General of India ---- 24

5. Auditor's Report ---- 25

6. Annexure to Auditors Report ---- 31

7. Balance Sheet ---- 35

8. Statement of Profit & Loss ---- 37

9. Cash Flow Statement ---- 39

10. Notes ---- 51

11. Government Review on Annual Report (2016-17) ---- 69

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ELECTRONICS CORPORATION OF TAMIL NADU LIMITED (A Government of Tamil Nadu Undertaking)

MHU COMPLEX, II FLOOR, 692 ANNA SALAI, NANDANAM, CHENNAI – 600 035.

GENERAL INFORMATION

BOARD OF DIRECTORS 1. Thiru R. Sudalaikannan, I.A.S., Chairman & Managing Director 2. Thiru T.K. Ramachandran, I.A.S., Director 3. Thiru Atulya Misra, I.A.S., Director 4. Thiru M.A. Siddique, I.A.S., Director 5. Thiru Anandrao Vishnu Patil, I.A.S., Director 6. Tmt. R. Vasuki, I.A.S., Director 7. Tmt. Shilpa Prabhakar Satish, I.A.S., Director

GENERAL MANAGER (F&A) COMPANY SECRETARY (i/c) Selvi E. Nalini P.R. Nithiyanandan

AUDITORS Raghu & Murali

Chartered Accountants Old No. 59/1, New No. 14,

Dr. Ranga Road, Alwarpet,

Chennai – 600 018 BANKERS INDIAN BANK, ALLAHABAD BANK, Nandanam Branch, T.Nagar Branch, Chennai 600 035. Chennai 600 017 . STATE BANK OF INDIA, CANARA BANK, INDIAN OVERSEAS BANK, Saidapet Branch, Saidapet Branch, West CIT Nagar Branch, Chennai – 600 035. Chennai 600 015. Chennai – 600 035.

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Ref: ELCOT/SECL/6236/AGM/40/2017 Date: 05.09.2017

AGM NOTICE

Notice is hereby given that the Fortieth (40th)Annual General Meeting of

the Shareholders of the Company will be held on Wednesday 27th September

2017 at 11.30 A.M in the Conference Hall of Information Technology Department,

II Floor, NKM Building, Secretariat, Chennai – 600 009. to transact the following

Ordinary and Special Business:-

Ordinary Business:-

1. To receive, consider and adopt the enclosed Statement of Profit and

Loss for the year ended 31st March, 2017 and the Balance Sheet as

on that date together with the Directors’ and Auditors’ Reports thereon.

2. To declare a dividend of 30% on Net profit (After Tax ) of the Company for

the year ended 31st March 2017.

Special Business:- To authorise the Board of Directors to fix the remuneration of the Statutory

Auditors for the year 2017-18.

(By order of the Board of Directors)

P.R. Nithiyanandan

Company Secretary i/c

Chennai – 600 035

Note:

A Member entitled to attend and vote at the meeting is entitled to

appoint a proxy to attend and vote and the proxy need not be a

member of the Company.

Encl: As above

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ELECTRONICS CORPORATION OF TAMIL NADU LIMITED

DIRECTORS' REPORT TO SHAREHOLDERS Your Directors are pleased to present the Fortieth Annual Report of the

Company along with Financial Statement for the year ended 31st March 2017,

the thirty seventh year of its operations.

I. FINANCIAL PERFORMANCE Key Highlights of the Company's Financial Performance in comparison

with the performance during the previous Financial Year are tabulated below:

Particulars Year ended 31.03.2017

Year ended 31.03.2016

(Rs. in Lakhs)

Gross Profit before Interest / Depreciation including adjustments

4482.09 9163.18

Interest and Other Finance charges 953.44 1034.55

Cash Profit 3528.65 8128.63

Depreciation 553.30 552.27

Profit for the Financial Year 2975.35 7576.36

Bad Debts written off --- 52.38

Net Profit for the Financial Year 2975.35 7523.98

ADD: Profit brought forward from earlier years

8644.36 4869.90

LESS: Depreciation Adjustment --- ---

Total Funds available for Appropriation 11619.71 12393.88

Provision for Taxation 887.66 1561.43

Provision for Deferred Tax 36.01 55.06

Provision for Dividend 615.51 1772.24

Provision for Tax on Dividend 125.31 360.79

Balance Carried Forward 9955.22 8644.36

Earnings per share (Basic and diluted) 0.008 0.022

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II. DIVIDEND: The Directors have proposed to declare 30% dividend on the net profit

after tax. The dividend, if approved and declared in the forthcoming AGM, would

result in a dividend outflow of Rs. 615.51 lakhs and distribution of Dividend Tax of

Rs. 125.31 lakhs aggregating outflow of Rs. 740.82 lakhs.

The Net Profit after Tax and Dividend is transferred to Reserves and

Surplus.

III. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND UNDER SECTION 125 OF THE COMPANIES ACT, 2013: Dividend declared during the previous year has been fully paid. Hence,

there was no transfer to Investor Education and Protection Fund for the year

under report.

IV. STATUS OF AFFAIRS OF THE COMPANY – CORE ACTIVITIES 1. IT PARKS PROMOTION IN TIER II CITIES In compliance with the policy directives of Government of Tamil Nadu,

ELCOT has promoted 8 Information Technology Special Economic Zones

(ELCOTSEZs) in Tier I and Tier II Cities of Tamil Nadu viz., Sholinganallur in

Chennai, Vilankurichi in Coimbatore, Ilandhaikulam and Vadapalanji in Madurai,

Navalpattu in Trichy, Gangaikondan in Tirunelveli, Jagirammapalayam in Salem

and Viswanathapuram in Hosur. Approvals for the lands in the above SEZs have

been obtained from the Ministry of Commerce, Government of India, New Delhi

and Architects were engaged for the creation of common infrastructure in the

above ELCOSEZs. Presently, construction of 50,000 sq.ft. IT-cum-Administrative

buildings have been completed in Trichy, Madurai-Ilandhaikulam, Tirunelveli,

Salem and Hosur. Construction of 50,000 sq.ft IT-cum-Administrative building at

ELCOSEZ-Madurai-Vadapalanji is under progress.

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2. STUDENT PRICELESS LAPTOP SCHEME

The Government of Tamil Nadu is implementing the scheme of distribution

of priceless laptop computers to the students studying in Government and

Government-Aided schools and colleges in the state to facilitate them in acquiring

better computer skills. ELCOT is entrusted with the procurement of laptops

required under the scheme.

The scheme is being implemented by the Government in phases since

2011-12. In Phase I, 8,98,866 laptop computers were procured and supplied in

the year 2011-12. In Phase-II, 7,56,000 laptop computers were procured and

supplied in the year 2012-13. In Phase–III, 5,65,000 laptop computers were

procured and supplied in the year 2013-14.

During Phase –IV & V (2014-15 and 2015-16), 10,16,028 (Phase IV

4,96,999 nos. and Phase V 5,19,029 nos.) laptop computers were procured and

supplied.

Under Phase – VI, (2016-17), 20,210 laptop computers have been

supplied from the balance in the laptops procured for the year 2015-16. The

remaining 5.16 lakhs laptop computers would be supplied soon.

3. E-GOVERNANCE INITIATIVES OF ELCOT ELCOT's e-governance department provides end-to-end support to

Government departments in implementing e-governance projects in order to

deliver seamless, transparent and efficient services to the citizens and effect

significant reduction in the processing time. In addition to that, it also coordinates

with various Government departments and the selected vendors from the stage

of finalizing the System Requirement Study (SRS) till the successful

implementation of the projects. ELCOT also offers the Facility Management

Services (FMS) to the departments for the applications made operational through

the selected vendors.

Some of the prominent projects executed by the e-governance department

are listed below:

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1. On line Lift Licensing System and Generator Tax Collection System was

implemented for the Electrical Inspectorate.

2. A web portal and State Skill Registry System was implemented for the

Tamil Nadu Skill Development Corporation (TNSDC).

3. A web portal for issuing licenses was implemented for the Directorate of

Industrial Safety and Health (DISH).

4. Electronic solution for “Automated Building Plan Scrutiny and Approval

System” was implemented for Directorate of Town and Country Planning (DTCP).

Websites Created for Tamil Nadu Government Departments:

1. Conservation Authority of Pallikaranai Marshland

2. Tamil Nadu Forest Department

3. Tamil Nadu Horticulture Department

4. Finance (BC) Department

5. Tamil Nadu Infrastructure Development Board

6. Adi Dravidar Welfare Board

4. Tamil Nadu State Data Centre (TNSDC) :

TNSDC – 1 Tamil Nadu State Data Centre (TNSDC) is one of the core e-Governance

back bone infrastructure of the state in operation since 01.08.2011. Originally the

scheme was implemented as a shared scheme between State and Central

Governments. Phase-I of the scheme was implemented at a cost of Rs. 60.80

crores (GOI share at Rs. 55.80 crores and State share at Rs.5.00 crores).

TNSDC is a highly secured infrastructure in which the Government

departments can host their applications. Tamil Nadu is the first state in the

country to obtain ISO certification for the Data Centre operations and

management of information security, which is an important milestone in the

operation of TNSDC. TNSDC has now obtained upgraded ISO certifications

ISO/IEC 20000-1:2011 and ISO/IEC 27001:2013.

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TNSDC is housed at ELCOT, Perungudi complex and is being maintained

with a strict Service Level Agreement (SLA) for ensuring 24 X 7 operation. It has

been set up with 63 racks and is in the consecutive 6th successful year of

operation.

Tamil Nadu State Data Centre - 1

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Presently, 104 applications of 25 Government departments are live from

the TNSDC -1. Some of the key Government applications which are operational

from TNSDC-1 are:

1. HMS & HMIS of Tamil Nadu Health Systems Project

2. e-Governance and e-District applications of SSDG

3. Crime and Criminal Tracking Network Systems (CCTNS)

4. e-Payment Systém of IGR

5. ERP of Chennai Corporation

6. Document Management Systém of Chennai Metro Rail Project

7. College Management Systém of Dr. MGR Medical University

8. Enterprise Resource Planning (ERP) for Priceless Fan, Mixie,

Grinder and Priceless Laptop Scheme, etc.

9. IFHRMS of Treasuries and Accounts Department (under

implementation)

Server Farm :

In order to provide common test bed facilities like Load Balancer, Anti

virus, Firewall etc., to the departments while hosting applications at TNSDC, a

'Server Farm' has been created at TNSDC with necessary hardware, software

and testing tools. This allows the departments to comply with Vulnerability

Assessment and Penetration Tests before hosting applications at TNSDC.

TNSDC – 2

As TNSDC-1, serving the hosting requirements of various Government

departments, reached 100% of its maximum capacity in terms of space,

TNSDC-2 has been sanctioned by the Government as a state sponsored

programme to be implemented at an approved project outlay of Rs. 40.00 crores

in a new building at Perungudi to cater to the additional needs of Government

Departments. Construction of the building for this scheme is nearing completion

and selection of Data Centre Operator for establishment, supply, commissioning,

operation and management of the Data Centre is in progress. TNSDC-2 is

likely to become operational by January 2018.

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Tamil Nadu State Data Centre - 2

Disaster Recovery Centre (DRC) & Nearline DRC (NLDRC) : DRC-TRICHY TNSDC enables the State Government and the departments to host their

applications and services on a common, redundant, secured and controlled

environment and thereby eases the process of integration and resource

optimization. However, risk pertaining to natural disasters such as Tsunami,

Earthquakes, Floods, etc. pose a herculean challenge to any Data Centre and

hence to ensure the business continuity of the departments which are providing

e-services and to have a mirror image of their data, establishment of a Disaster

Recovery Centre has been sanctioned by the Government at Trichy and ELCOT

has been nominated as the implementing agency for setting up the Disaster

Recovery Centre (DRC) in a phased manner.

ELCOT has commenced work on establishment of the DRC and the

Operator for supply, installation, configuration, testing, operations and

management of the Disaster Recovery Centre (DRC) at ELCOSEZ, Trichy at a

cost of Rs. 53.28 crores has been selected through open tender process.

Commissioning of IT and non-IT equipments is in progress.

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DR – PUNE

Under National Disaster Recovery Scheme, TNSDC has been mapped

with National Data Centre (NDC), Pune which has been enabled as the DR

Centre through National Knowledge Network (NKN) connectivity. The DR at

NDC – Pune is operational and DR facilities of CCTNS and SHDRC have been

implemented at NDC – Pune.

NLDRC

To address the synchronous replication requirements and for providing

Nearline Disaster Recovery solutions, ELCOT has entered into a Memorandum

of Understanding (MoU) with BSNL Data Centre.

NLDR common IT infrastructure has been created by ELCOT at BSNL DC.

The requirements of the departments are being addressed on a case to case

basis on receipt of demands from the departments.

Cloud Infrastructure at TNSDC

Cloud technology facilitates optimal utilisation of IT infrastructure, enables

consolidation of IT resources and leads to power savings.

In keeping with the latest advancements in IT, Cloud set up has been

established in TNSDC through M/s. CDAC and M/s. Sify Technologies Ltd. As on

date, 22 applications have been deployed successfully in this Cloud environment

and public access enabled.

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Cloud Infrastructure at TNSDC 1

e-Mail Solutions :

Provisioning of e-Mail Services is an essential component of the

functioning of the Government. In order to provide seamless desktop connectivity

as well as to adhere to the regulations relating to storage and archival of emails

as official records of business processes, a full fledged e-Mail solution has been

launched and is in operation with the domain name “tn.gov.in”.

5 TRAINING INFRASTRUCTURE FACILITY

ELCOT has set up 25 user computer network with necessary UPS

and other infrastructure in each District Collectorate for training purposes. This

facility is being utilized by the district officials for imparting soft skills to the

officials of Government Departments.

6. TAMIL NADU STATE WIDE AREA NETWORK (TNSWAN)

State Wide Area Network is another core e-Governance infrastructure

created under the National e-Governance Plan (NeGP) as a shared scheme

between the State and the Central Governments. Phase-1 operations

(01.12.2007 to 30.11.2012) of TNSWAN were implemented at an estimated cost

of Rs.140.25 crores (GoI Rs.55.73 crores and State Rs.84.52 crores). Phase 2

operations (09.09.2013 to 08.09.2016) of TNSWAN have been wholly funded

(Rs. 74.69 crores) by the State Government.

Now, TNSWAN is under interim period operations for which sanction of

funds to the tune of Rs.36.90 crores is awaited from the Government.

TNSWAN Phase 3

Detailed Project Report (DPR) for a value of Rs.437.96 crores for

TNSWAN Phase-3 operations has been submitted to the Government for

administrative approval and sanction of funds. Orders of the Government are

awaited.

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I. (a) TNSWAN Vertical Connectivity

TNSWAN core network has 708 nodes (POPs - Point of Presence), which

were created at the Secretariat, Raj Bhavan, DGP Office, Commissioner of

Police, Corporation of Chennai, Government Complexes such as DPI, DMS,

Ezhilagam, Panagal Building and Kuralagam at Chennai and at the Collectorates,

Revenue Divisional Offices, Taluk offices and Block Development Offices in the

districts. This network provides a link to all the Government departments by

providing voice, data and video connectivity for improving the delivery of services

to the public, for improving the response time and transparency and to enable the

Government departments to access their servers hosted at TNSDC. This network

was established under Build, Own, Operate and Transfer (BOOT) mode and was

completed on 30.11.2012. The 3 year Phase-2 operations were completed on

08.09.2016 and the network is currently under interim operations. Strict Service

Level Agreement (SLA) is being adhered to in vertical connectivity on 24x7 basis.

The following services are provided to Government departments through

TNSWAN.

1. Secured Intranet Application Access

2. Secured Internet Access

3. Closed User Group Voice Services

4. Video Conferencing Services

TNSWAN and NKN have been integrated at the District Head

Quarters (DHQ) level as per the guidelines of the Ministry of Electronics and

Information Technology (MeitY), Government of India. With this integration, the

bandwidth at DHQ has been upgraded to 34 Mbps / 100 Mbps / 1Gbps as per the

requirements.

I. (b) Horizontal Connectivity

Government offices have been connected to TNSWAN POPs for availing

intranet facility for rolling out the department's applications that are hosted at

TNSDC. Intranet services such as voice, data, internet, video conferencing, etc.

are also provided to the offices. Horizontal Connectivity has also been made

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available through TNSWAN Points of Presence (PoPs) to Government

Departments.

So far, horizontal connectivity has been provided to more than 5000

offices of Government departments viz., Commercial Taxes, Tamil Nadu Water

Supply and Drainage Board (TWAD), Tamil Nadu Health Systems Project

(TNHSP), Treasuries & Accounts, Registration, Employment & Training, Forest,

Transport, Tamil Nadu e-Governance Agency (TNeGA), State Health Society,

Tamil Nadu Housing Board (TNHB), Survey and Settlement, Tamil Nadu Cement

Corporation Limited (TANCEM), Tamil Nadu Civil Supplies Corporation, etc.

I. (c) Redundant Connectivity

TNSWAN vertical connectivity is provided to all districts, taluks,

BDOs and RDOs using the bandwidth provided by NKN/BSNL. In order to

ensure uninterrupted connectivity at the districts, taluks, BDOs and RDOs, a

secondary 2 Mbps MPLS-VPN (1:1) redundant connectivity has been

established. Provisioning for 210 links has been established so far.

II. National Knowledge Network(NKN)

National Knowledge Network (NKN) is a national level high speed network

established by Government of India. NKN provides a common platform to the

scientists, researchers, doctors, scholars and students to work together for

advancing human development by connecting the academic institutions across

India and the global scientific community.

Bandwidth through NKN is being provided by Bharat Sanchar Nigam

Limited (BSNL), Power Grid Corporation of India Limited (PGCIL) and RailTel.

NKN also provides network platform for National e-Governance Plan (NeGP)

projects for their roll out at the national level. This consists of an ultra-high speed

core, starting with multiple 2.5/10 Gigabits per second and progressively moving

towards 40/100 Gigabits per second (Gbps) connectivity. Two links of 1 Gbps

speed from NKN have been terminated, one each at TNSWAN and TNSDC with

100 Mbps Internet connectivity.

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Through the NKN connectivity, all the TNSWAN and TNSDC users can also

access the applications that are hosted at the national level. The applications can

be accessed through NKN at a very high speed Internet bandwidth, which is

several times faster than the earlier speed.

III. Internet Leased Line and MPLS

Internet leased line connectivity is being offered at various speeds varying

from 1 Mbps to 45 Mbps speed to the departments dealing with large amount of

dynamic data. At present, leased line connectivity is being provided to

departments / organisations such as CMWSSB, Corporation of Chennai, Director

of Rural Development, Archaeology, Tamil Nadu Pollution Control Board, etc.,

MPLS connectivity is being offered at various speeds varying from 256 Kbps to 8

Mbps at spoke end and 2 Mbps to 100 Mbps as aggregation link as a redundant

connectivity to TNSWAN or direct link to the departments. This connectivity is

being provided to various departments such as TN Housing Board, Treasuries

and Accounts, Commercial Tax Department, etc.

7. PROCUREMENT ACTIVITIES

ELCOT has adopted an innovative procurement policy by encouraging

competition among the vendors coupled with an open and transparent

procurement process. ELCOT had achieved a price reduction of 20-30% of the

market value of the products, thus saving crores of rupees of Government

departments.

During the year 2016-17, ELCOT procured IT products for a value of

Rs.98.71 Crores and has a projected procurement of Rs.150 Crores for the year

2017-18.

8. PARTICIPATION IN NATIONAL EVENTS

To promote Tamil Nadu as a preferred destination of choice for IT and

ITES investments, ELCOT has participated in the following major national events:

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1. NASSCOM HR summit 2016 held at Chennai during July 2016.

2. CONNECT 2016 held at Chennai during September 2016.

3. ICTACT Bridge 2016 held at Chennai during February 2016.

4. India International Trade Fair (IITF) 2016 held at New Delhi during November 2016.

5. India Tourist and Industrial Fair 2017 held at Chennai during January 2017 to March 2017.

6. ELCINA 2017 held at Chennai during January 2017.

7. NASSCOM India Leadership Forum 2017 held at Mumbai during February

2017. 9. DRIVING LICENCE CARD:

Preparation and issue of Laminated Computerized Driving License has

been entrusted with ELCOT by the Transport Commissioner in all the 138

centres in the State. During the financial year (2016–2017) under report, this

activity fetched Rs. 8.68 crores of revenue to ELCOT. All the 138 centres are run

by ELCOT with part of the hardware and entire manpower outsourced by

M/s. Keltron.

V. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING

THE FINANCIAL POSITION OF THE COMPANY THAT HAD OCCURED

BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL

STATEMENT RELATES TO THE DATE OF THE REPORT

No material change / commitment affecting the Financial position of the

company occurred between the end of the financial year to which this financial

statement relates to the date of the report.

VI. CONSERVATION OF ENGERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS & OUTGO

The provisions of Section 134 (m) of the Companies Act, 2013 do not

apply to our Company. There were no foreign exchange earnings and outgo

during the year under review.

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VII. RISK MANAGEMENT:

The Company does not have any risk management policy as the elements

of risk threatening the Company’s existence is very minimal.

VIII.CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

In respect of CSR contribution by the company for the F.Y. 2016-17,

ELCOT has furnished the details of profits available with ELCOT to the

Government so as to get appropriate direction from the Government for payment

of CSR. IX. PARTICULARS OF LOANS AND GUARANTEES ON THE INVESTMENTS

MADE UNDER SECTION 186 OF THE COMPANIES ACT 2013:

There were no loans and guarantees on the investments made by the

Company under Section 186 of the Companies Act, 2013 during the year under

review and hence the said provision is not applicable.

X. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH REALTED PARTIES There was no contracts or arrangements as defined under Section 188 of

the Company's Act 2013 during the year under review.

XI. EXPLANATION OR COMMENTS ON QUALIFICATION, RESERVATION OR

ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN THE

REPORT

There was no qualification, reservation or adverse remarks or disclaimers

made by the auditors in the report. The provision relating to the submission of

Secretarial Audit report is not applicable to the Company.

XII. COMPANY’S POLICY RELATING TO DIRECTOR'S APPOINTMENT,

PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The provision of Section 178 (1) relating to constitution of nomination and

recommendation committee are not applicable to the Company and hence the

Company has not devised any policy relating thereto Director's appointment,

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payment of remuneration and discharge of their duties and provided under

section 178 (3) of the Company's Act 2013.

XIII. EXTRACTS OF ANNUAL RETURN

The extracts of Annual Return as per Section 92(3) of the Companies Act

2013 read with Rule 12(1) of the Companies (Management and Administration)

Rule 2014 is given in Annexure I.

XIV. MEETING OF THE BOARD OF DIRECTORS

During the Financial year ended 31st March 2016, the Company held

Meetings of the Board of Directors as per Section 173 of Companies Act, 2013

which is summarized below. The provisions of Companies Act, 2013 were

adhered to while considering the time gap between two meetings.

S. No. Date of meeting Board Strength No. of Directors present

1 200/31.05.2016 6 4

2 201/30.09.2016 7 3

3 202/13.10.2016 7 6

4 203/08.02.2017 7 6

5 204/20.03.2017 7 6

XV. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act 2013, the Board hereby

submits its responsibility statements:

i. In the preparation of the Annual Accounts, the applicable accounting

standards had been followed along with proper explanation relating to

material departures.

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 the financial year and of the profit of the Company

for that period.

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iii. The Directors had taken proper and sufficient care for the maintenance of

the 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 had prepared the annual accounts on a going concern basis. v. The directors had devised proper systems to ensure compliance with the

provisions of all applicable laws and that such systems were adequate and

operating effectively.

XVI. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year. XVII. CHANGE IN THE BOARD OF DIRECTORS

Thiru C.V. Sankar, I.A.S., Principal Secretary/ CMD TIDCO ceased to be Director- ELCOT as per G.O.Rt.No.84, Information Technology Department (Admin.1) Department dated 07.10.2016.

Thiru Vikram Kapur, I.A.S., Chairman & Managing Director, TIDCO

appointed as Director – ELCOT vide G.O.Rt.No.84, Information Technology Department (Admin.1) Department dated 07.10.2016.

Thiru Atul Anand, I.A.S., Managing Director ceased to be Managing Director ELCOT vide G.O.Rt.No.3584, Public (Special.A) Department, dated 06.09.2016.

Dr. Rajendra Kumar, I.A.S., appointed as full additional charge of the post of Managing Director, ELCOT vide G.O.Rt.No.3584, Public (Special.A) Department, dated 06.09.2016.

Thiru T.Udhayachandran, I.A.S., Secretary to Government (Expenditure), Finance Department ceased to be Director – ELCOT vide G.O.Rt.No.61, Information Technology Department (Admin.1) Department dated 28.06.2016.

Thiru Dr. P. Umanath, I.A.S., Secretary to Government (Expenditure), Finance Department ceased to be Director- ELCOT vide G.O.Rt.No.80, Infromation Technology Department (Admin.1) Department dated 20.09.2016.

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Dr. P. Senthilkumar, I.A.S., Secretary to Government (Expenditure), Finance Department appointed as Director- ELCOT Vide G.O.Rt.No.80, Information Technology Department (Admin.1) Department dated 20.09.2016.

Dr. R. Selvaraj, I.A.S., Managing Director, SIPCOT ceased to be Director- ELCOT Vide G.O.Rt.No.81, Information Technology Department (Admin.1) Department dated 29.09.2016.

Tmt. R. Vasuki, I.A.S., Managing Director, SIPCOT appointed as Director – ELCOT Vide G.O.Rt.No.81, Information Technology Department (Admin.1) Department dated 29.09.2016.

Thiru M. Velmurugan, I.E.S. Executive Vice Chairman, GUIDANCE ceased to be Director-ELCOT Vide G.O.Rt.No.82, Information Technology Department (Admin.1) Department dated 29.09.2016.

Thiru M.S. Shanmugam, I.A.S. Executive Vice Chairman, GUIDANCE ceased to be Director- ELCOT Vide G.O.Rt.No.16, Information Technology Department (Admin.1) Department dated 16.03.2017.

Tmt Shilpa Prabhakar Satish, I.A.S. Executive Vice Chairperson, GUIDANCE appointed as Director –ELCOT Vide G.O.Rt. No.16, Information Technology Department (Admin.1) Department dated 16.03.2017.

Thiru S.Nagarajan, I.A.S., Director and Chief Executive Officer TNeGA ceased to be Director – ELCOT vide G.O.Rt.No.83, Information Technology Department (Admin.1) Department dated 07.10.2016

Thiru J. Kumaragurubaran, I.A.S., Director and Chief Executive Officer

TNeGA appointed as Director- ELCOT Vide G.O.Rt.No.83, Information Technology Department (Admin.1) Department dated 7.10.2016

XVIII. COMPOSITION OF AUDIT COMMITTEE

Currently, the following Directors are the members of the Audit Committee

of the Board of Directors.

1. Thiru Atulya Misra, I.A.S., - Member

(Chairman and Managing Director, TIDCO)

2. Thiru M.A.Siddique, I.A.S. - Member (Director representing Finance Dept.)

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3. Tmt. R. Vasuki, I.A.S., - Member (Chairman and Managing Director, SIPCOT) 4. Tmt. Shilpa Prabhakar Satish, I.A.S., - Member (Director) XIX. SHARE CAPITAL

The paid up capital as on 31st March 2017 is Rs.2,593.05 lakhs.

HUMAN RESOURCES (HR) RELATIONS

Your Directors are pleased to report that the Industrial Relations during the

year continued to be cordial.

ACKNOWLEDGEMENT Your Directors wish to place on record the assistance and guidance given

by the Government of Tamil Nadu in general and especially through the

Departments of Information Technology, Finance and the office of the Accountant

General (Commercial)-II. They acknowledge the services of the Company's

bankers in furthering the activities of the Company. Your Directors would also

like to record their appreciation for the co-operation and contribution made by all

the officers and staff of the company. Your Directors thank the customers and

suppliers for their patronage and support. Your Directors also record their

appreciation of the services by the Internal and Statutory Auditors in the matter of

audit.

For and on behalf of the Board of Directors

Chennai-35 Dr. RAJENDRA KUMAR Date: 18.08.2017 CHAIRMAN & MANAGING DIRECTOR

21

APPENDIX – I Information required under Companies (Disclosure and particulars in the report of the Board of Directors) Rules 1988 for the financial year 2016-2017 A. Conservation of Energy Not applicable to Electronics Industries B. Technology Absorption

Specific Areas to which R&D carried out by the Company

I. Development work - Nil

II. Development work on Hand - Nil

III. Expenditure on R&D

a. Capital - Nil b. Recurring - Nil c. Total - Nil

d. Total R&D Expenditure as a percentage of total Turnover - Nil

e. Foreign exchange earnings and outgo in 2016-17 - Nil

22

FORM MGT 9

EXTRACT OF ANNUAL RETURN as on financial year ended on 31.03.2017

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the

Company (Management & Administration ) Rules, 2014.

I. REGISTRATION AND OTHER DETAILS

I) CIN U27209TN1977SGC007291

II) Registration Date 21.03.1977

iii) Name of the Company ELECTRONICS CORPORATION

OFTAMIL NADU LIMITED

iv) Category/Sub-category of

the Company

Electronics & IT

v) Address of the Registered

office & contact details

692, Anna Salai, Nandanam, Chennai 600

035.

vi) Whether listed company No

vi) Name , Address & contact

details of the Registrar &

Transfer Agent, if any.

Not applicable

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl.No Name and Description of

main products /services NIC Code of the Product /Service

% of total turnover of the company

1 Public Services by Government Agencies

01 100

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

III PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No

Name and Address of the Company

CIN/GLN Holding, Subsidiary and

Associate

Applicable Section

- Not Applicable -

23

OFFICE OF THE ACCOUNTANT GENERAL

(Economic and Revenue Sector Audit), Tamil Nadu,

Lakha Pariksha Bhavan, 361 Anna Salai, Teynampet,

Chennai – 600 018

AG (E & RSA)/OAD (C)II/VII/30A-44/2017-18/163

To

The Managing Director

Electronics Corporation of Tamil Nadu Ltd.,

Chennai

Sir,

Sub: Comments of the C & AG of India u/s 143, (6) (b) of the Companies

Act, 2013 on the accounts of the Electronics corporation of Tamil

Nadu Ltd., Chennai for the year ended 31st March, 2017

I am to forward herewith the NIL COMMENTS CERTIFICATE of the

Comptroller and Auditor General of India under section 143 (6) (b) of the

Companies Act, 2013 on the accounts of Electronics corporation of Tamil Nadu

Limited, Chennai for the year ended 31st March, 2017

A Copy of the Minutes of Annual General Meeting in which comments of

Comptroller & Auditor General of India are to be placed under section 143 (6) (b)

of the Companies Act, 2013 may please be sent to this office early. Six copies of

printed Annual Report as and when they are ready may be forwarded to this

office.

Yours faithfully,

Senior Deputy Accountant General /

Comml.

Encl: As above

24

ACCOUNTANT GENERAL (E & RSA) TAMIL NADU

DEVIKA NAYAR, IA & AS

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

UNDER SECTION 143 (6) (B) OF THE COMPANIES ACT, 2013 ON THE

FINANCIAL STATEMETNS OF ELECTRONICS CORPORATION OF TAMIL

NADU LIMITED, CHENNAI FOR THE YEAR ENDED 31ST MARCH, 2017

The preparation of the financial statements of Electronics Corporation of

Tamil Nadu Limited, Chennai for the year ended 31st March, 2017 in accordance

with the financial reporting framework prescribed under the Companies Act, 2013

is the responsibility of the management of the Company. The Statutory Auditors

appointed by the Comptroller and Auditor General of India under section 139 (5)

of the Act are responsible for expressing opinion on the financial statements

under section 143 of the Act based on Independent audit in accordance with

standards on auditing prescribed under section 143 (10) of the Act. This is stated

to have done by them vide their Audit Report dated 18-08-2017.

I, on behalf of the Comptroller and Auditor General of India have

conducted a supplementary audit under section 143 (6) (b) of the Act of the

financial statements of Electronics Corporation of Tamil Nadu Limited, Chennai

for the year ended 31 March 2017. This supplementary audit has been carried

out independently without access to the working papers of the Statutory Auditors

and is limited primarily to inquiries of the Statutory Auditors and company

personnel and a selective examination of some of the accounting records. On the

basis of my audit nothing significant has come to my knowledge which would give

rise to any comment upon or supplement to statutory auditor’s report.

For and on behalf of the

Comptroller & Audit General of India

Place: Chennai

Date: 18-09-2017

DEVIKA NAYAR

Principal Accountant General

25

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF ELECTRONICS CORPORATION OF TAMILNADU

LIMITED

Report on the financial statements

We have audited the accompanying financial statements of Electronic

Corporation of Tamilnadu Limited (”the Company”) which comprise the

Balance sheet as at 31st March 2017; the Statement of Profit and Loss; the Cash

Flow Statement, a summary of the significant accounting policies and other

explanatory information for the year then ended.

Management’s responsibility for the Financial statements and for Internal

Financial Controls over Financial Reporting

The Company’s management is responsible for the matters stated in

Section 134(5) of the Companies Act, 2013(“the Act”) with respect to the

preparation of these financial statements that give a true and fair view of the

financial position, financial performance and cash flows of the Company in

accordance with the accounting principles generally accepted in India, including

the Accounting Standards specified under Section 133 of the Act, read with Rule

7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting

records in accordance with the provisions of the Act for safeguarding of the

assets of the Company and for preventing and detecting frauds and other

irregularities; selection and application of appropriate accounting policies; making

judgments and estimates that are reasonable and prudent; and design,

implementation and maintenance of adequate internal financial controls, that

were operating effectively for ensuring the accuracy and completeness of the

accounting records, relevant to the preparation and presentation of the financial

statements that give a true and fair view and are free from material misstatement,

whether due to fraud or error.

26

The Company’s management is responsible for establishing and

maintaining internal financial controls based on the internal control over financial

reporting criteria established by the Company considering the essential

components of internal control stated in the Guidance Note on Audit of Internal

Financial Controls Over Financial Reporting issued by the Institute of Chartered

Accountants of India. These responsibilities include the design, implementation

and maintenance of adequate internal financial controls that were operating

effectively for ensuring the orderly and efficient conduct of its business, including

adherence to company’s policies, the safeguarding of its assets, the prevention

and detection of frauds and errors, the accuracy and completeness of the

accounting records, and the timely preparation of reliable financial information, as

required under the Act.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements

based on our audit and to express an opinion on the Company's internal financial

controls over financial reporting based on our audit.

We have taken into account the provisions of the Act, the accounting and

auditing standards and matters which are required to be included in the audit

report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing

specified under Section 143(10) of the Act and the Guidance Note on Audit of

Internal Financial Controls Over Financial Reporting. Those Standards and the

Guidance Note require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement and whether adequate internal

financial controls over financial reporting was established and maintained and if

such controls operated effectively in all material respects.

An audit involves performing procedures to obtain audit evidence about

the amounts, the disclosures in the financial statements and adequacy of the

internal financial controls system over financial reporting and their operating

27

effectiveness. Our audit of internal financial controls over financial reporting

included obtaining an understanding of internal financial controls over financial

reporting, assessing the risk that a material weakness exits, and testing and

evaluating the design and operating effectiveness of internal control based on the

assessed risk. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the

auditor considers internal financial controls relevant to the Company’s

preparation of the financial statements that give a true and fair view in order to

design audit procedures that are appropriate in the circumstances. An audit also

includes evaluating the appropriateness of the accounting policies used and the

reasonableness of the accounting estimates made by the Company’s Directors,

as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion on the Company’s internal

financial controls system over financial reporting and the financial statements.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial controls over financial reporting is a process

designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles. A company's internal

financial control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail,

accurately and fairly reflect the transactions and dispositions of the assets of the

company; (2) provide reasonable assurance that transactions are recorded as

necessary to permit preparation of financial statements in accordance with

generally accepted accounting principles, and that receipts and expenditures of

the company are being made only in accordance with authorizations of

management and directors of the company; and (3) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of the company's assets that could have a material effect on

the financial statements.

28

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over

financial reporting, including the possibility of collusion or improper management

override of controls, material misstatements due to error or fraud may occur and

not be detected. Also, projections of any evaluation of the internal financial

controls over financial reporting to future periods are subject to the risk that the

internal financial control over financial reporting may become inadequate

because of changes in conditions, or that the degree of compliance with the

policies or procedures may deteriorate.

Opinion

In our opinion and to the best of our information and according to the

explanations given to us, the aforesaid financial statements give the information

required by the Act in the manner so required and give a true and fair view in

conformity with the accounting principles generally accepted in India, of the state

of affairs of the Company as at 31st March 2017, and its profit and its cash flows

for the year ended on that date.

Emphasis of Matters

We draw attention to Note 31 in the Notes to the financial statements

regarding the Company’s contribution to Corporate Social Responsibility

spending in the current financial year.

Our opinion is not modified in respect of this matter.

Report on other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Companies Act 2013, we report that:

a) We have sought and obtained all the information and explanations which

to the best of our knowledge and belief were necessary for the purposes of

our audit.

29

b) In our opinion, proper books of accounts required by law have been kept

by the Company so far as appears from our examination of those books.

c) The Balance sheet, the Statement of Profit and Loss and the Cash Flow

Statement dealt with by this Report are in agreement with the books of

accounts.

d) In our opinion, the aforesaid financial Statements comply with Accounting

Standards specified under section 133 of the Act, read with Rule 7 of the

Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as

on 31st March, 2017 taken on record by the Board of Directors, none of the

directors is disqualified as on 31st March, 2017 from being appointed as a

director in terms of Section 164 (2) of the Act.

f) In our opinion considering nature of business, size of operation and

organizational structure of the entity, the Company has, in all material

respects, an adequate internal financial controls system over financial

reporting and such internal financial controls over financial reporting were

operating effectively as at 31st March 2017, based on the internal control

over financial reporting criteria established by the Company considering

the essential components of internal control stated in the Guidance Note

on Audit of Internal Financial Controls Over Financial Reporting issued by

the Institute of Chartered Accountants of India.

g) With respect to the others matters to be included in the Auditor’s Report in

accordance with Rule 11 of the Companies (Audit and Auditors) Rules,

2014, in our opinion and to the best of the our information and according to

the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its

financial position in its financial statements - Refer Note 33 and

Note 34 to the financial statements;

30

ii) The Company did not have any long-term contracts including

derivative contracts for which there were any material foreseeable

losses;

iii) There were no amounts which were required to be transferred to

the Investor Education and Protection Fund by the Company; and

iv) The Company has provided requisite disclosures in its financial

statements as to holdings as well as dealings in Specified Bank

Notes during the period from 8 November, 2016 to 30 December,

2016 and these are in accordance with the books of accounts

maintained by the Company – Refer Note 32 to the financial

statements

2. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”)

issued by the Central Government of India in terms of Section 143(11) of the

Act, and on the basis of such checks of the books and records of the

Company as we considered appropriate and according to the information and

explanations given to us during the course of audit, we give in the Annexure a

statement on the matters specified in the paragraphs 3 and 4 of the Order.

For M/s Raghu &Murali,

Chartered Accountants

FRN: 007564S

Shreepriya Kishor

Partner

Membership Number: 205934

Place: Chennai

Date: 18 August 2017

31

Annexure referred to in Paragraph 2 of Our Report under the heading

“Report on other Legal and Regulatory Requirements”

We report that:

(i) (a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of fixed assets;

(b) The Fixed Assets have been physically verified by the management

in a phased manner, designed to cover all the items over a period of three

years, which in our opinion, is reasonable having regard to the size of the

company and nature of its business. Pursuant to the program, a portion of

the fixed asset has been physically verified by the management during the

year and no material discrepancies between the books records and the

physical fixed assets have been noticed.

(c) According to the information and explanations given to us and on

the basis of our examination of the records of the Company, the title deeds

of immovable properties are held in the name of the Company.

(ii) (a) The management has conducted the physical verification of

inventory at reasonable intervals.

(b) The discrepancies noticed on physical verification of inventory as

compared to book records which has been properly dealt with in the books

of account were not material.

(iii) The Company has not granted any loans, secured or unsecured to

companies, firms or other parties covered in the register maintained under

Section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a) and

(b) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to

us, the Company has complied with the provisions of section 185 and I86

of the Companies Act, 2013 with respect of loans, investments,

guarantees, and security.

32

(v) The Company has not accepted any deposits from the public and hence

the directives issued by the Reserve Bank of India and the provisions of

Sections 73 to 76 or any other relevant provisions of the Act and the

Companies (Acceptance of Deposit) Rules, 2015 with regard to the

deposits accepted from the public are not applicable.

(vi) As informed to us, the maintenance of Cost Records has not been

specified by the Central Government under sub-section (1) of Section 148

of the Act, in respect of the activities carried on by the Company.

(vii) (a) According to the information and explanations given to us and on

the basis of our examination of the books of account, and records, the

Company has been regular in depositing undisputed statutory dues

including Provident Fund, Employees State Insurance, Income-Tax, Sales

tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess

and any other applicable statutory dues with the appropriate authorities.

According to the information and explanations given to us, no undisputed

amounts payable in respect of the above were in arrears as at March 31,

2017 for a period of more than six months from the date on when they

become payable.

(b) According to the information and explanations given to us, there are

no dues of income-tax, sales tax, service tax, duty of customs, duty of

excise, value added tax which have not been deposited on account of any

dispute except as mentioned in Note 33 to the financial statements.

(viii) In our opinion and according to the information and explanations given to

us, the Company has not defaulted in the repayment of loan to the

government. The Company has not taken any loan from financial

institutions and has not issued any debentures.

(ix) Based upon the audit procedures performed and the information and

explanations given by the management, the Company has not raised

moneys by way of initial public offer or further public offer including debt

instruments and term loans. Accordingly, the provisions of clause 3 (ix) of

33

the Order are not applicable to the Company and hence not commented

upon.

(x) Based upon the audit procedures performed and the information and

explanations given by the management, we report that no material fraud

by the Company or on the company by its officers or employees has been

noticed or reported during the year.

(xi) Based upon the audit procedures performed and the information and

explanations given by the management, the provisions of section 197 read

with Schedule V to the Companies Act are not applicable. The managerial

remuneration has been paid / provided in accordance with the requisite

approvals of the Government of Tamilnadu.

(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the

provisions of clause 3 (xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on

our examination of the records of the Company, there were no

transactions with the related partiesexcept as mentioned in Note 27 to the

financial statements.These are in compliance with sections 177 and 188 of

the Act anddetails of such transactions have been disclosed in the

financial statements as required by the applicable accounting standards.

(xiv) Based upon the audit procedures performed and the information and

explanations given by the management, the Company has not made any

preferential allotment or private placement of shares or fully or partly

convertible debentures during the year under review. Accordingly, the

provisions of clause 3 (xiv) of the Order are not applicable to the Company

and hence not commented upon.

(xv) Based upon the audit procedures performed and the information and

explanations given by the management, the Company has not entered into

any non-cash transactions with directors or persons connected with them.

Accordingly, the provisions of clause 3 (xv) of the Order are not applicable

to the Company and hence not commented upon.

34

(xvi) In our opinion, the company is not required to be registered under section

45-IA of the Reserve Bank of India Act, 1934 and accordingly, the

provisions of clause 3 (xvi) of the Order are not applicable to the Company

and hence not commented upon.

For M/s Raghu &Murali,

Chartered Accountants

FRN: 007564S

Shreepriya Kishor

Partner

Membership Number: 205934

Place: Chennai

Date: 18 August 2017

35

ELECTRONICS CORPORATION OF TAMIL NADU LIMITED

BALANCE SHEET

Particulars Note

No.

As at 31st March,

2017

As at 31st March,

2016

A. EQUITY AND LIABILITIES

1. Shareholders’ funds

a) Share capital 3 25,93,05,500 25,93,05,000

b) Reserves and surplus 4 2,60,44,08,602 2,23,58,92,066

c) Money received against share warrants - -

2. Share application money pending

allotment

- -

3. Non-current liabilities

a) Long-term borrowings 5 12,44,000 12,44,000

b) Deferred tax liabilities (Net) 4,04,04,037 3,68,03,198

c) Other Long term liabilities 6 6,22,08,92,280 6,01,38,12,977

d) Long-term provisions 5,14,43,377 4,65,24,853

4. Current liabilities

a) Short-term borrowings - -

b) Trade payables 7 11,72,96,216 13,25,32,418

c) Other current liabilities 8 4,60,70,58,165 7,88,09,15,315

d) Short-term provisions 9 53,59,76,427 45,12,73,088

TOTAL 14,43,80,28,105 17,05,83,02,915

B. ASSETS

1. Non-current assets

(a) Fixed assets 10

(i) Tangible assets 4,16,05,22,382 4,20,22,98,134

(ii) Intangible assets - -

(iii) Capital work-in-progress 40,10,54,210 6,38,98,706

36

(iv) Intangible assets under development - -

(b) Non-current investments 11 56,01,56,050 44,01,56,050

(c) Deferred tax assets (net) - -

(d) Long-term loans and advances - -

(e) Other non-current assets - -

2. Current assets

(a) Current investments - -

(b) Inventories 12 17,36,588 17,36,588

(c) Trade receivables 13 3,42,57,024 8,06,32,046

(d) Cash and cash equivalents 14 6,79,50,22,030 10,06,61,70,770

(e) Short-term loans and advances 15 1,38,68,74,932 1,19,47,69,809

(f) Other current assets 16 1,09,84,04,889 1,00,86,40,812

TOTAL 14,43,80,28,105 17,05,83,02,915

See accompanying notes forming part of the financial statements

For and on behalf of the Board

P.R. Nithiyanandan CA.E. Nalini R. Sudalaikannan M.A. Siddique

Company Secretary (i/c) General Manager (F&A) Chairman & Managing Director Director

This is the Balance Sheet referred to in our Report of Date

For RAGHU & MURALI

Chartered Accountants

Place : Chennai

Date : 18-Aug-17

CA.SHREEPRIYA KISHOR

Partner

Membership No.205934

Firm Regn.No.7564 S

37

ELECTRONICS CORPORATION OF TAMIL NADU LIMITED

STATEMENT OF PROFIT AND LOSS

Particulars Note

No.

For the year

ended 31st March

2017

For the year

ended 31st March

2016

I Revenue from operations 17 19,11,00,139 79,02,40,003

II Other income 18 53,60,12,008 40,28,56,919

III Total Revenue (I + II) 72,71,12,147 1,19,30,96,922

IV Expenses:

a Cost of materials consumed 19 3,09,66,362 3,27,43,448

b Changes in inventories 19 A - -

c Direct Expenses 20 5,23,26,673 4,24,54,899

d Employee benefit expenses 21 13,64,92,632 13,85,04,432

e Finance costs 22 9,53,44,389 10,34,55,364

f Depreciation 10 5,53,29,882 5,52,26,836

g Administrative and Other expenses 23 5,91,16,936 6,83,14,263

Total expenses 42,95,76,875 44,06,99,242

V Profit before exceptional and

extraordinary items and tax (III-IV)

29,75,35,272 75,23,97,680

VI Exceptional items - -

VII Profit before extraordinary items and

tax (V - VI)

29,75,35,272 75,23,97,680

VIII Extraordinary Items - -

IX Profit before tax (VII- VIII) 29,75,35,272 75,23,97,680

X Tax expense:

38

(1) Current tax 8,87,66,000 15,61,43,499

(2) MAT Credit - -

(3) Deferred tax 36,00,839 55,06,385

XI Profit (Loss) for the period from

continuing operations (IX-X)

20,51,68,433 59,07,47,796

XII Profit/(loss) from discontinuing

operations

- -

XIII Tax expense of discontinuing

operations

- -

XIV Profit/(loss) from Discontinuing

operations (after tax) (XII-XIII)

- -

XV Profit (Loss) for the period (XI + XIV) 20,51,68,433 59,07,47,796

XVI Earnings per equity share:

(1) Basic

(2) Diluted

791

791

2,278

2,278

Statement of Significant Accounting Policies and

Notes forming part of Financial statements

For and on behalf of the Board

P.R. Nithiyanandan CA.E. Nalini R. Sudalaikannan M.A. Siddique

Company Secretary (i/c) General Manager (F&A) Chairman & Managing Director Director

This is the Statement of Profit and loss referred to in our Report of Date

For RAGHU & MURALI

Chartered Accountants

Place : Chennai

Date : 18-Aug-17

CA.SHREEPRIYA KISHOR

Partner

Membership No.205934

Firm Regn.No.7564 S

39

ELECTRONICS CORPORATION OF TAMIL NADU LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2017

Particulars For the year ended 31 March, 2017

For the year ended 31 March, 2016

A. Cash flow from operating activities

Net Profit / (Loss) before extraordinary items and tax

29,75,35,272 75,23,97,680

Adjustments for

Depreciation and amortisation 5,53,29,882 5,52,26,836

(Profit) / loss on sale / write off of assets

- -

Finance costs 9,53,44,389 10,34,55,364

Interest income (52,32,75,092) (39,01,34,542)

Dividend income (77,68,010) (74,56,008)

Rental income from Investment Properties

(41,80,438) (33,64,262)

Rent income from Investment Properties (IT Building)

(1,43,95,071) (1,30,76,936)

Land Lease Deposit forfeited (1,52,46,597) (56,56,67,697)

Other Incomes (2,09,60,230) (3,60,63,541)

Grands-in-Aid & other subsidies – received

37,96,00,000 10,54,58,000

Grands-in-Aid & other subsidies – utilized

(12,19,88,212) (7,91,47,792)

Bad debts - 52,37,958

Operating profit / (loss) before working capital changes

(17,75,39,379) (82,55,32,620)

Changes in working capital:

Adjustments for (increase) / decrease in operating assets:

Trade receivables 4,63,75,022 1,04,344

Short-term loans and advances (19,21,05,123) (75,93,26,929)

Other current assets (4,97,64,077) 1,25,14,400

Inventories - 5,17,412

Adjustments for increase / (decrease) in operating liabilities:

Trade payables (1,52,36,202) 21,85,010

Other current liabilities (3,24,72,38,381) 2,13,50,87,440

40

Other long-term liabilities 20,70,79,303 3,21,24,49,800

Short-term provisions (40,62,661) 1,74,06,615

Long-term provisions 49,18,524 (1,37,53,043)

(3,25,00,33,595) 4,60,71,85,049

Cash flow from extraordinary items - -

Cash generated from operations (3,13,00,37,702) 4,53,40,50,109

Net income tax (paid) / refunds (4,00,00,000) (85,00,000)

Net cash flow from / (used in) operating activities (A)

(3,17,00,37,702) 4,52,55,50,109

B. Cash flow from investing activities

Capital expenditure on fixed assets, including capital advances

(35,36,84,474) (5,11,66,870)

Proceeds from sale of fixed assets 51,667 50,000

Purchase of long-term investments - Joint Ventures

(12,00,00,000) (9,67,00,000)

Interest received - Fixed Deposits 52,32,75,092 39,01,34,542

Dividend received - Joint Ventures 77,68,010 74,56,008

Rental income from investment properties

41,80,438 33,64,262

Rent income from Investment Properties (IT Building)

1,43,95,071 1,30,76,936

Land Lease Deposits forfeited 1,52,46,597 56,56,67,697

Other incomes 2,09,60,230 11,21,92,631 3,60,63,541 86,79,46,116

Cash flow from extraordinary items - -

Net cash flow from / (used in) investing activities (B)

11,21,92,631 86,79,46,116

C. Cash flow from financing activities

Proceeds from long-term borrowings

- -

Finance cost - (10,34,55,364)

Dividend paid (17,72,24,339) (7,77,91,500)

Tax on dividend (3,60,79,331) (21,33,03,670) (1,32,20,665) (19,44,67,529)

Cash flow from extraordinary items - -

Net cash flow from / (used in) financing activities (C)

(21,33,03,670) (19,44,67,529)

41

Net increase / (decrease) in Cash and cash equivalents (A+B+C)

(3,27,11,48,741) 5,19,90,28,696

Cash and cash equivalents at the beginning of the year

10,06,61,70,770 4,86,71,42,074

Effect of exchange differences on restatement of foreign currency Cash and cash equivalents

- -

Cash and cash equivalents at the end of the year

6,79,50,22,029 10,06,61,70,770

Reconciliation of Cash and cash equivalents with the Balance Sheet:

Cash and cash equivalents as per Balance Sheet

6,79,50,22,029 10,06,61,70,770

Less: Bank balances not considered as Cash and cash equivalents

- -

Net Cash and cash equivalents 6,79,50,22,029 10,06,61,70,770

Add: Current investments considered as part of Cash and cash equivalents

- -

(a) Cash on hand & Stamps in Hand

10,001 10,001

(b) Balances with banks

(i) In current accounts with Schedule Bank

53,42,42,428 1,48,53,82,285

(ii) Short Term Deposit with Schedule Bank

2,44,57,68,551 4,84,53,40,283

(iii) P D Account with Reserve Bank of India

1,049 7,04,38,201

(iv) Other Deposits with Financial Institutions

3,81,50,00,000 3,66,50,00,000

6,79,50,22,029 10,06,61,70,770

For and on behalf of the Board

P.R. Nithiyanandan CA.E. Nalini R. Sudalaikannan M.A. Siddique

Company Secretary (i/c) General Manager (F&A) Chairman & Managing Director Director

This is the Cash Flow Statement referred to in our Report of Date

For RAGHU & MURALI

Chartered Accountants

Place : Chennai

Date : 18-Aug-17 CA.SHREEPRIYA KISHOR

Partner

Membership No.205934

Firm Regn.No.7564 S

42

ELECTRONICS CORPORATION OF TAMIL NADU LIMITED

Notes forming part of the Financial Statements

Note: 1 Corporate Information

The Company was incorporated on 21st day of March 1977. The main objects

of the company are to promote, establish and run State Public Enterprises for

Electronic and IT/ITES related works. The registered office of the company is

situated at MHU Complex, II floor, 692, Anna Salai, Nandanam, Chennai-600

035.

2. SIGNIFICANT ACCOUNTING POLICIES:

2.1 Basis of preparation of Financial Statements:

a) The financial statements of the Company have been prepared in

accordance with the Generally Accepted Accounting Principles in India

(Indian GAAP) to comply with the Accounting Standards notified under the

Companies (Accounting Standards) Rules, 2006 (as amended) and the

relevant provisions of the Companies Act, 2013.

b) The financial statements have been prepared on accrual basis under the

historical cost convention. The accounting policies adopted in the

preparation of the financial statements are consistent with those followed

in the previous year.

c) Revenue & Expenditure have been reckoned on Accrual basis except

income on specified Government schemes which are recognized on

receipt basis only.

d) Prior Period Adjustments are resorted to for material adjustments

applicable to Prior Periods arising from changes in Accounting Policy &

from the correction of fundamental errors. They do not include the normal

recurring corrections and adjustments on accounting estimates made in

previous years.

43

e) ELCOT acts as the Nodal Agency for implementation of Govt. schemes

such as TNSWAN (Tamil Nadu State Wide Area Network), State Data

Centre for which grants are released by Government to ELCOT. Such

grants are accounted in the books of accounts as per Accounting Standard

-12.

f) ELCOT is availing ASIDE (Assistance to State for Development of Export

Infrastructure and Allied Activities Scheme) Grant for development of

infrastructure facilities created in IT Special Economic Zones (SEZs) at

Chennai and the Tier II Cities of the state. The Grant receipts are set off

against expenditure incurred for development of infrastructure facilities for

which the Grants have been sanctioned.

2.2 Use of Estimates:

a) The preparation of the financial statements in conformity with Indian GAAP

requires the Management to make estimates and assumptions considered

in the reported amounts of Assets and Liabilities (including contingent

liabilities) and the reported Income and Expenditure during the year.

b) The Management believes that the estimates used in preparation of the

financial statements are prudent and reasonable. Future results could

differ due to these estimates and the differences between the actual

results and the estimates are recognized in the periods in which the results

are known / materialize.

2.3 Inventories:

a) Inventories are valued at Net Realizable Value after providing for

obsolescence and other losses, where considered necessary.

b) Finished Goods, Work-in-Progress, Raw Materials and Components are

valued at Net Realizable Values and Tools & Equipments valued at

Revalued Figure, after reckoning for wear and tear and Prototype

Equipments on Demonstration valued at Cost.

44

c) As per the advice of the Accountant General and in concurrence with AS –

2, the Inventory has been valued at the NRV and the balance (90%) has

been written off in the Books of Accounts in the year 2006-07. Although

the NRV is nil as on date, the balance 10% is maintained in the Accounts

pending disposal of the case before the Hon’ble Court.

2.4. Depreciation and Amortization:

a) Depreciation has been provided on a straight-line basis and according to

the useful life prescribed in Schedule II of the Companies Act, 2013 from

F.Y 2014-15.

b) Depreciation on additions is provided based on estimated useful life as on

the respective dates of addition.

c) Fixed Assets costing Rs.5000/- or less is capitalized and Depreciation

reckoned for all such fixed assets at the whole amount of cost less Re.1/-

per item of asset.

2.5 Revenue Recognition:

a) Service charges receivable on the applicable schemes are recognized

phase wise based on orders issued by the Government of Tamil Nadu.

b) Pro-rata Development expenses are collected from lessees as per

applicable agreements for development of infrastructure facilities.

c) Interest income is recognized on accrual basis.

2.6 Fixed Assets

A) Tangible Assets:

a) Fixed assets are carried at cost less accumulated depreciation

b) The cost of fixed assets is historical cost and includes interest on

borrowings attributable to acquisition of qualifying fixed assets up to the

date the asset is ready for its intended use and other incidental expenses

incurred up to that date.

45

c) The value of Fixed Assets funded out of Grants-in-Aid received from the

Government, though not the property of the Company, are treated as the

Assets of the Company and Depreciation is charged on those Fixed

Assets as well.

d) Gains and losses arising from the retirement or disposal of Fixed

Assets are credited/charged to Profit and Loss Account.

B) Intangible assets

a) Intangible Assets are carried at cost less accumulated amortization and

impairment losses, if any.

b) The cost of an intangible asset comprises its purchase price, including any

import duties and other taxes and any directly attributable expenditure on

making the asset ready for its intended use and net of any trade discounts

and rebates.

2.7 Government Grants:

a) Grants from Government of India and Government of Tamilnadu related to

Depreciable Fixed Assets is treated as Deferred Income and exhibited

under “Reserves and Surplus“ and the same is amortized and recognized

as other Income in the Statement of Profit and Loss over the useful Life of

the asset.

b) Subsidies/Grants on the Capital Account are deducted from the cost of

respective assets to which they relate. The unspent amount at the year

end, if any, is shown as Current liabilities.

c) Subsidies/Grants on the Revenue Account are credited to Statement of

Profit & Loss under the Head of “Other Receipts” and the expenses are

debited to the respective heads

d) Subsidy from Government of India for Project Assets is treated as Capital

Reserves.

46

e) Revenue Grants are recognized on a systematic basis in the Statement of

Profit and Loss over the periods necessary to match with the related costs.

f) Grant and Subsidy received are transferred to Statement of Profit and

Loss after completion of the related project.

2.8 Investments:

a) Long-term investments are carried individually at cost less provision for

diminution in its value, if any.

b) Gains and Losses arising from the disposal of Investments are credited to

Statement of Profit and Loss.

2.9 Employee Benefits:

Employee benefit includes Provident fund, Leave salary and Gratuity fund.

A) Short-term employee benefits:

All employee benefits payable wholly within twelve months of rendering the

service are classified as short-term employee benefits. The undiscounted amount

of short-term employee benefits expected to be paid in exchange for the services

rendered by employees is recognized as an expense during the period.

B) Long-term employee benefits:

1) Provident Fund:

Provident Fund contributions are made to a Trust administered by the Trustees.

Interest payable to the Provident Fund members, shall not be at a rate lower than

the statutory rate. Liability is recognized for any shortfall in the income of the fund

vis-à-vis liability of the interest to the members as per statutory rates.

2) Gratuity Plan:

The Company has entered into an agreement with the Life Insurance Corporation

of India under Group Gratuity Scheme to discharge its liability under the Payment

of Gratuity Act, 1972 and the amount payable by the Company’s liability towards

47

gratuity is provided on the basis of actuarial valuation by Life Insurance

Corporation of India using projected unit credit method.

The Actuarial Valuation of the Accrued Gratuity

Liability is based on the following assumptions:

1) Discounting rate 8.00% p.a.

2) Salary Escalation rate 7.00%

3) Mortality Rate LIC (2006-08) ultimate

4) Attrition rate 1-3%

5) Method of valuation Projected unit credit method

6) The Gratuity Liability in respect of the employees who have left the

services of the company and claims not preferred yet is not included in

the actuarial value.

3) Leave Salary:

The Company’s liability towards encashment of eligible Leave for employees is

provided on the basis of actuarial valuation by private actuary using Projected

Unit Credit method as on 31.03.2017.

Assumptions:

1) Discount rate as per para 78 of AS15R 6.80%

2) Expected rate of return computed by the

Enterprise as per para 107-109 of AS15R 0.00%

3) Salary escalation fixed by the Enterprise

as per para 83-91 and 120 (1) of AS 15R 4.00%

4) Attrition rate fixed by Enterprise 6.00%

5) Proportion of Leave availment 10.00%

6) Proportion of encashment during service 10.00%

7) Proportion of encashment on separation 80.00%

48

2.10 Land lease for development of IT Parks :

A. Based on the Board decision dated 15th February 2011 lands leased

thereafter are treated as follows:

15% of lease value which is not refundable to the lease holders even after

surrender of land within a period of 3 years is treated as revenue in the year

of lease.

Every year 5% of land Lease Deposit which accrue as income to the company

is treated as land revenue receipt from the 4th year onwards. 15% repayable

to the lease holders after the expiry of lease period is treated under liabilities

(Land lease deposit).

The prepaid receipts received from the Lessee as deposit is treated as

liabilities.

B. In the case of lands leased before the decision of the Board dated

15.02.2011, wherein 100% lease deposit is repayable after the expiry of

the lease period / surrender, the Company continues to treat the same as

land lease deposit.

C. Based on the Expert Advisory Committee opinion of the Institute of

Chartered Accountants of India dated 10th February 2015, the refundable

land lease deposits to the extent to be settled within twelve months after

reporting date has been classified as current liabilities and the balance

classified as non-current liabilities.

2.11 Earning per Share:

Basic earnings per share is computed by dividing the profit / (loss) after tax

(including the post tax effect of extraordinary items, if any) by the weighted

average number of equity shares outstanding during the year.

49

2.12 Taxes on income:

a) Current tax is the amount of tax payable on the taxable income for the

year as determined in accordance with the provisions of the Income Tax

Act, 1961.

b) Deferred tax is recognized on timing differences, being the differences

between the taxable income and the accounting income that originate in

one period and are capable of reversal in one or more subsequent

periods. Deferred tax is measured using the tax rates and the tax laws

enacted or substantially enacted as at the reporting date. Deferred tax

liabilities are recognized for all timing differences.

c) Deferred tax assets in respect of unabsorbed depreciation and carry

forward of losses are recognized only if there is virtual certainty that there

will be sufficient future taxable income available to realize such assets.

Deferred tax assets are recognized for timing differences of other items

only to the extent that reasonable certainty exists that sufficient future

taxable income will be available against which these can be realized.

d) Deferred tax assets and liabilities are offset if such items relate to taxes

on income levied by the same governing tax laws and the Company has a

legally enforceable right for such set off. Deferred tax assets are reviewed

at each Balance Sheet date for their realisability.

2.12 Provisions & Contingencies:

a) A provision is recognized when the company has a present obligation as a

result of past events and it is probable that an outflow of resources will be

required to settle the obligation in respect of which a reliable estimate can

be made.

b) Provisions (excluding retirement benefits) are not discounted to their

present value and are determined based on the best estimate required to

settle the obligation at the Balance Sheet date. These are reviewed at

each Balance Sheet date and adjusted to reflect the current best

estimates. Contingent liabilities are disclosed in the Notes.

50

2.14 Claims By / Against the Company:

a) Claims for liquidated damages by the Company against Suppliers/Agents

and against the Company by the customers are recognized in accounts on

acceptance.

b) The Insurance claims, Octroi refunds, Excise Duty and Customs Duty

refund claims are considered at the time of their admission by the

concerned authorities and accordingly accounted.

2.15 Service Tax input credit:

Service tax input credit is accounted for in the books in the period in which the

underlying service received is accounted and when there is no uncertainty in

availing the credits.

51

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

NOTE NO.3: SHARE CAPITAL

Share Capital Amount in Rs.

As At 31.03.2017 As At 31.03.2016

a) Authorised

3,00,000 Equity Shares of Rs.1000/- each with voting rights

b) Issued,

259305 Equity Shares of Rs.1000/- each with voting rights

c) Subscribed & Fully Paid Up

259305 Equity Shares of Rs.1000/- each with voting rights

30,00,00,000

25,93,05,000

25,93,05,000

30,00,00,000

25,93,05,000

25,93,05,000

NOTE NO. 3 A: MOVEMENT OF SHARES DURING THE YEAR

Particulars Equity Shares

As At 31.03.2017 As At 31.03.2016

Shares outstanding at the beginning of the year 2,59,305 2,59,305

Shares Issued during the year - -

Shares bought back during the year - -

Shares outstanding at the end of the year 2,59,305 2,59,305

NOTE NO. 3 B: DETAILS OF SHARES HELD BY EACH SHAREHOLDER HOLDING

MORE THAN 5% SHARES :

Class of Shares/Name of

Shareholders

As At 31.03.2017 As At 31.03.2016

Number of Shares Held

% of holding in that class of

Shares

Number of Shares

Held

% of holding in that class of

Shares

Equity shares with voting rights

The Governor of Tamil Nadu 2,59,302 99.9988%

2,59,302 99.9988%

52

NOTE 4: RESERVES & SURPLUS

Particulars Equity Shares

As At 31.03.2017 As At 31.03.2016

(a). Revaluation Reserves Opening Balance Add: Addition on revaluations during the year Less: Utilized/transfer during the year

58,97,55,063

- -

58,97,55,063--

Closing Balance 58,97,55,063 58,97,55,063

(b). Other Reserves Grants- in -Aid & other subsidies - opening balance Add: Additions/transfer during the year Less: Utilized/transfer during the year

78,17,02,440 37,96,00,000

(14,21,70,910)

75,53,92,23210,54,58,000(7,91,47,792)

Closing Balance 1,01,91,31,530 78,17,02,440

(c). Surplus in Statement of Profit and Loss Opening balance (+) Net Profit/(Net Loss) for the current year (+) Transfer from Reserves (-) Proposed Dividends (-) Tax on Proposed Dividends (-) Interim Dividends (-) Transfer to Reserves

86,44,34,563 20,51,68,433

- (6,15,50,530) (1,25,30,457)

- -

48,69,90,43759,07,47,796

-(17,72,24,339)

(3,60,79,331)--

Closing Balance 99,55,22,009 86,44,34,563

Total (a+b+c) 2,60,44,08,602 2,23,58,92,066

NOTE 5 - LONG TERM BORROWINGS

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Loans and Advances Unsecured Loan from Government of India (Refer note below)

12,44,000 12,44,000

Total 12,44,000 12,44,000

Note - Loan from Government of India :-

The Government of India sanctioned a loan of Rs.12.44 lakhs with interest @15%

p.a for development of centralized grid control system to M/s Lambda Elcot Limited

through ELCOT. As Such an amount of Rs.1,86,600/- has been provided in the accounts

by way of interest payable. The Government of India was addressed for the conversion

of the loan as grant in aid.

53

NOTE 6 - LONG TERM BORROWINGS

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

(a) Unsecured Interest due on GOI Loan (b) Secured Land Lease Deposits (Non Current Liabilities)

54,73,417

6,21,54,18,860

52,86,817

6,00,85,26,160

Total 6,22,08,92,280 6,01,38,12,977

NOTE 7: TRADE PAYABLES

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Trade payables 11,72,96,216 13,25,32,418

Total 11,72,96,216 13,25,32,418

NOTE 8: OTHER CURRENT LIABILITIES

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

(a) Advance from Customers (b) Land Lease Deposits (Current Liabilities) (c) Deposit from Suppliers (d) Expenses Payable (e) Payable for Purchase of Fixed Assets (f) Other Payables

1,73,19,01,672 1,36,33,300

22,41,98,226 2,19,95,153

58,43,25,721 2,03,10,04,093

1,77,96,59,3691,36,33,300

16,14,98,4551,59,25,750

58,43,25,7215,32,58,72,720

Total 4,60,70,58,165 7,88,09,15,315

NOTE 9: SHORT TERM PROVISIONS

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

(a) Provision for employee benefits Provision for Bonus Provision for Leave Salary to Employees (b) Others Provision for Income Tax

7,26,600

1,41,04,823

52,11,45,004

67,8361,88,26,248

43,23,79,004

Total 53,59,76,427 45,12,73,088

54

NOTE NO. 10: FIXED ASSETS Group Gross Block

Original Cost as on

01.04.2016

Additions Deletions Gross Block Total as on 31.03.2017

Acc. Dep. as on 1.04.2016

Currrent Deprn

Adjustm-ents

Total Deprn. as on

31.03.2017

Net Block Closing

balance as on 31.03.2017

Net Block Opening

balance as on 01.04.2016

Buildings 46,25,93,088 - - 46,25,93,088 4,09,82,552 75,95,666 - 4,85,78,218 41,40,14,870 42,16,10,536

Computer 19,35,92,302 1,37,10,240 - 20,73,02,542 16,07,00,131 1,88,29,511 - 17,95,29,642 2,77,72,900 3,28,92,171

Furniture & Fittings

16,09,88,005 10,03,641 1,62,125 16,18,29,521 6,17,00,080 1,64,37,085 1,13,121 7,80,24,044 8,38,05,477 9,92,87,925

Land 3,37,68,79,511 - - 3,37,68,79,511 - - - - 3,37,68,79,511 33,768,79,511

Leasehold Land

23,61,92,325 - 28,86,703 23,33,05,622 - - - - 23,33,05,622 23,61,92,325

Office Equipment

10,54,16,780 15,12,815 75,403 10,68,54,192 7,17,69,348 1,20,34,826 36,270 8,37,67,904 2,30,86,287 3,36,47,432

Plant & Machinery

1,56,36,757 3,02,274 - 1,59,39,031 1,52,96,221 49,830 - 1,53,46,051 5,92,980 3,40,536

Vehicles 64,41,923 - - 64,41,923 49,94,224 3,82,964 - 53,77,188 10,64,735 14,47,699

Total 4,55,77,40,691 1,65,28,970 31,24,231 4,57,11,45,430 35,54,42,557 5,53,29,882 149,391 41,06,23,048 4,16,05,22,382 4,20,22,98,134

Add: Capital Work in Progress

401,054,210

63,898,706

TOTAL

4,561,576,592

4,266,196,840

55

NOTE NO.11: NON-CURRENT INVESTMENTS A) TRADE INVESTMENS – QUOTED:

Particulars As at 31st March, 2017 As at 31st March, 2016

Value (Rs.)

No. of Shares (Rs.)

Face Value (Rs.)

Value Rs.)

No. of Shares Rs.)

Face Value Rs.)

Investments in equity instruments :- (a) Associates Encore Infosys Limited

1,000

46,370

10

1,000

46,370

10

(b) Joint Venture Companies Elnet Technologies Limited Elcot Power Controls Limited Iykot hi-tech Limited

1,04,00,000

1,0001,000

10,40,0008,25,000

13,18,000

10 10 10

1,04,00,000

1,000 1,000

1,040,000

8,25,000 13,18,000

1010

10(c) Escort Venture Companies DSQ Software Limited 1,000 202,500

10 1,000 202,500 10

Total 10,404,000 10,404,000

(B) Trade Investments - Unquoted :-

Particulars As at 31st March, 2017 As at 31st March, 2016

Value (Rs.)

No. of Shares (Rs.)

Face Value (Rs.)

Value Rs.)

No. of SharesRs.)

Face Value Rs.)

Investments in equity instruments:- (a) Joint Venture Companies Kody Teck Limited AGT Electronics Limited Elen Computer and Accessories Limited

1,738,05040,00,000

1,000

173,8054,00,0002,60,000

10 10 10

1,738,05040,00,000

1,000

173,8054,00,0002,60,000

1010 10

56

Intwel Technologies Limited DCL Software Limited Ravichandra Systems and Computer Services Ltd S A International Limited Tidel Park Limited Tidel Park Coimbatore Limited (b) Escort Venture Companies Savant India Institute of Technology Pvt Ltd

1,0001000

22,00,000

1,0002,00,00,000

47,17,00,000

1,10,000

1,56,8002,40,0002,20,000

10,45020,00,000

4,71,70,000

11,0000

10 10 10

10 10 10

10

1,0001,000

22,00,000

1,0002,00,00,000

40,17,00,000

1,10,000

1,56,8002,40,0002,20,000

10,45020,00,000

4,01,70,000

11,000

101010

101010

10

Total 49,97,52,050 42,97,52,050

(C) Other Investment :-

Particulars As at 31st March, 2017 As at 31st March, 2016

Value (Rs.)

No. of Shares (Rs.)

Face Value (Rs.)

Value Rs.)

No. of SharesRs.)

Face Value Rs.)

Investment in Indian Institute of Information Technology (IIIT) –Srirangam (a Not-for Profit Public Private Partnership) (Refer Note below)

5,00,00,000 5,00,00,000

Note: As Per G.O. (Ms) No.46, Government of Tamilnadu has directed ELCOT to Invest Rs. 5 crore in IIIT-Srirangam as a Not-for Profit Public Private Partnership Investment

57

NOTE NO. 12: INVENTORIES (AT LOWER OF COST OR NET REALISABLE VALUE)

Particulars

Amount in Rs.

As At 31.03.2017 As At 31.03.2016

a. Raw Materials and Components VHF b. Work-in-Progress c. Finished goods

14,54,047 1,73,298 1,09,243

14,54,0471,73,2981,09,243

Total 17,36,588 17,36,588

NOTE NO. 13: TRADE RECEIVABLES

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Trade receivables outstanding for a period less than six months from the date they are due for payment. Secured, considered good Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful debts

- 95,80,206

- -

-3,04,69,236

--

95,80,206 3,04,69,236

Trade receivables outstanding for a period exceeding six months from the date they are due for payment Secured, considered good Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful debts

-

2,46,76,818 71,69,467 71,69,467

-

5,01,62,81071,69,46771,69,467

2,46,76,818 5,01,62,810

Total 3,42,57,024 8,06,32,046

NOTE NO. 14: CASH AND CASH EQUIVALENTS

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

a. Balances with banks This includes: In Current Account In Term Deposit b. P.D.Account with Reserve bank of India c. Other Deposits with Financial Institutions d. Cash on hand

53,42,42,428 2,44,57,68,552

1,049 3,81,50,00,000

10,001

1,48,53,82,2854,84,53,40,283

7,04,38,2013,66,50,00,000

10,001

Total 6,79,50,22,030 10,06,61,70,770

58

NOTE NO. 15: SHORT-TERM LOANS AND ADVANCES

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

(a) Loans and Advances to Employees Staff Advance Secured advance Unsecured advance (b) Balance with Government Authorities Unsecured, Considered Good Balance with Central Excise & Custom Dept. (c) Others Unsecured, Considered Good Amount Recoverable from JV's Amount Recoverable from SEZ Other Deposits Electricity Deposit EMD Deposit Security Deposit Others

8,67,430 5,04,736

19,233

4,78,499 1,38,01,91,818

10,29,909

2,66,500 61,858

34,54,949

15,31,8509,99,146

19,233

4,78,4991,18,68,78,883

10,29,90950,00061,858

37,20,431

Total 1,38,68,74,932 1,19,47,69,809

NOTE NO. 16: OTHER CURRENT ASSETS

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Unsecured, considered good - Interest Receivable - Advance Income Tax and Tax Deducted at Source

15,71,61,883 94,12,43,006

16,13,20,08584,73,20,727

Total 1,09,84,04,889 1,00,86,40,812

NOTE NO.17: REVENUE FROM OPERATIONS

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

(a) Sale of products comprises :- Sales - Driving License Cards Sales - Family Cards Sales - ID Cards

8,26,88,600

35,64,350 63,295

8,73,65,080

56,22,03394,575

Sub Total 8,63,16,245 9,30,81,688

(b) Service Income comprises :- Service Charges -UCSC Service Charges - Procurement Service Charges - Projects Others Service Charges

2,03,81,036 2,18,03,952 1,02,14,244

25,71,232

1,66,07,4135,91,69,9621,09,96,523

85,75,663

Sub Total 5,49,70,464 9,53,49,561

59

(c) Other Operating Income (SEZ Income):- Rent from IT Buildings Land Lease Deposit Forfeited Depreciation on FA funded Aside Grant/IT

1,43,95,071 1,52,46,597 2,01,71,762

1,30,76,93656,56,67,697

2,30,64,121

Sub Total 4,98,13,430 60,18,08,754

Total 19,11,00,139 79,02,40,003

NOTE NO.18: OTHER INCOME

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

(a) Dividend Income From Long Term Investment Joint Ventures (b) Other non-operating income :- Rent Interest income from deposits & advances Depreciation on Fixed Assets funded out of TDCE/NORAD Grant Depreciation written back Miscellaneous Income

-

77,68,010

41,80,438 52,32,75,092

10,936

- 7,77,532

-74,56,008

33,64,26239,01,34,542

10,93612,89,143

6,02,028

Total 53,60,12,008 40,28,56,919

NOTE NO. 19: COST OF MATERIAL CONSUMED

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Opening stock Add: Purchase of Raw Material (Refer Note Below)

14,54,047 3,09,66,362

19,71,4593,27,43,448

3,24,20,409 3,47,14,908

Less: Written Off/Consumed Less: Closing stock

- 14,54,047

5,17,41214,54,047

Cost of material consumed 3,09,66,362 3,27,43,448

Note for Purchase of Raw Material Purchase of DL Card Purchase of ID Card

3,09,04,865

61,497 3,26,58,158

85,290

Total 3,09,66,362 3,27,43,448

60

NOTE NO. 19-A - CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-

IN-PROGRESS

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Inventories at the end of the year: Finished goods Work-in-progress

1,09,243 1,73,298

1,09,2431,73,298

2,82,541 2,82,541

Inventories at the beginning of the year: Finished goods Work-in-progress

1,09,243 1,73,298

1,09,2431,73,298

2,82,541 2,82,541

Net (increase) / decrease - -

NOTE NO. 20: DIRECT EXPENSES

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

SEZ Expenses IT Building Revenue Expenses Project Expenses Driving License Card Project Expenses Family Card Expenses AADHAAR PEC Expenses Urban Common Service Expenses Priceless Laptop Scheme Expenses

2,81,52,173

2.40,440 36,59,884 41,50,211

1,32,53,538 28,70,427

1,72,61,526

6,07,10448,65,523

-1,51,63,303

45,57,443

Total 5,23,26,673 4,24,54,899

NOTE NO. 21: EMPLOYEE BENEFIT EXPENSES

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Salaries, Wages & Bonus Contibutions to Provident and Other Funds Gratuity Staff Welfare Expenses

11,55,55,706 1,13,53,007

1,33,227 94,50,692

11,51,12,2211,12,12,943

35,11,82686,67,442

Total 13,64,92,632 13,85,04,432

61

NOTE NO. 22: FINANCE COST

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Interest on Govt. of India Loan Interest on Govt. of TN Adv. For Suppliers

1,86,600 9,51,57,789

1,86,60010,32,68,764

Total 9,53,44,389 10,34,55,364

NOTE NO. 23: ADMINISTRATIVE AND OTHER EXPENSES

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Printing & Stationery Insurance-Others Repairs & Maintenance Vehicle Maintenance Office Maintenance Advertisement Rates & Taxes Auditors Remuneration (Refer Note Below) Communication Expenses Travelling Expenses Manpower outsourcing Power & Fuel Development Expenses Data Centre Expenses Corporate Social Responsibility Bad Debts

9,85,396 4,20,808

22,20,401, 12,94,932

1,18,26,676 20,22,717

6,51,730 88,500

18,07,495 16,52,846

2,03,18,844 96,74,106 55,32,899

6,19,586 - -

10,77,2184,41,023

34,42,92512,07,758

1,38,75,69623,22,470

7,46,42869,000

12,81,21019,67,243

1,21,54,19741,26,921

1,63,21,26411,81,45228,61,50052,37,958

Total 5,91,16,936 6,83,14,263

Note for Auditor's Remuneration (including applicable taxes)

Particulars Amount in Rs.

As At 31.03.2017 As At 31.03.2016

Auditors Remuneration comprises :- Statutory Audit Fees Tax Audit Fee

76,700 11,800

57,50011,500

Total 88,500 69,000

62

NOTES ON ACCOUNTS

NOTE NO. 23 A: GRANTS IN AID

Particulars As on 31.3.2017

(In ₹ ) As on 31.3.2016

(In ₹ )

i) From Govt. of Tamil Nadu (For Technological Development Center for Electronics) As per Last Balance Sheet.

Less: Depreciation for the year on Fixed Assets funded out of the Grant (Contra against Other Income)

Total (i) ii) From Govt. of India under NORAD Scheme As per last Balance

Sheet

Less: Depreciation for the year on Fixed Assets Funded out of the Grant (Contra against other Income)

Total (ii)

76,420

7,013

83,433

7,013

69,407 76,420

7,888

3,923

3,965

11,811

3,923

7,888

Total 73,372 84,308

NOTE NO. 23 B: ASIDE GRANTS –IT BUILDING

Particulars As on 31.3.2017

(In ₹ ) As on 31.3.2016

(In ₹ )

From Aside Grant for Trichy IT Building Less: Depreciation for the year on Fixed Assets funded out of the Grant (Contra against Other Income)

Total (i) From Aside Grant for Madurai IT Building Less: Depreciation for the year on Fixed Assets funded out of the Grant (Contra against Other Income)

Total (ii) From Aside Grant for Tirunelveli IT Building Less: Depreciation for the year on Fixed Assets funded out of the Grant (Contra against Other Income)

Total (iii)

1,43,36,717

59,50,940

2,31,41,051

88,04,334

83,85,777 1,43,36,717

1,92,63,011

83,41,959

2,76,27,823

83,64,812

1,09,21,052 1,92,63,011

2,90,31,212

58,78,863

3,49,26,185

58,94,973

2,31,52,349 2,90,31,212

Total (i) + (ii) +(iii) 4,24,59,178 6,26,30,940

63

NOTE NO. 24: DETAILS FOR SECURED LOANS

No cash credit facility was availed from the Banks during the year. (Previous year –Nil)

Note No: 25 DETAILS OF TAX DEDUCTED AT SOURCE

Particulars As on 31.3.2017

(In ₹ ) As on 31.3.2016

(In ₹ )

The following Tax Deducted at Source are included under the respective incomes: On Interest received on deposits and Advances On Other Income

2,63,54,405

3,52,27,870

3,91,95,662

37,99,68,976 NOTE NO. 26: FINANCIAL REPORTING OF INTEREST IN JOINT VENTURES:

In Compliance of Accounting Standard (AS 27) on “Financial Reporting of Interest

in Joint Ventures” issued by the Institute of Chartered Accountants of India and based on

general prudence, the company has recognized its interest in the Joint Venture

Companies in the capacity of investor to Joint Venture Companies. The Dividend

received has been recognized as Income and credited to the statement of Profit and

Loss.

NOTE NO. 27: RELATED PARTY TRANSACTION:

As per Accounting Standard (AS) - 18 issued by The Institute of Chartered

Accountants of India, There is no related party transaction incurred by the company

during the year 2016-17.

NOTE NO. 28: NON PROVISIONS IN ACCOUNTS:

(i) (a) No interest is charged on the amount recoverable from Joint Venture

Companies except for Loans and Advances sanctioned to them on interest

wherever applicable.

(b) Possible Loss regarding Loans to Joint Venture Companies.

(c) Rent amounting to Rs.15,600/- due from Staff Quarters (previous year

Rs.15600/-) at Hosur occupied by ELNET Ltd has not been provided in the

Accounts since the said Company’s operations have come to stand still and the

company was referred to BIFT and the Liquidator was appointed by the Hon’ble

High Court of Madras.

64

(d) The disposal of stock worth Rs.173.66 lakhs (90% value of stock amounting

to Rs.156.29 lakhs written off during the year 2006-07) which was earlier

purchased for executing single channel VHF Equipment order from DOT could

not be disposed off as the case is pending with the High court . As the matter is

sub-judiced we are awaiting final orders from Hon’ble High court to dispose off

the materials through suitable tendering process.

(ii) Lands taken over from SIPCOT

a) For development of IT Park at Tirunelveli, SIPCOT has given 500 acres of land

on lease at Gangaikondan, Tirunelveli District for which an amount of Rs. 24.19

crores was paid to SIPCOT and agreement was entered and included as

“Leasehold land in fixed assets”.

b) Interest demanded for Coimbatore land: In pursuance of Government policy, land

was alienated at Coimbatore and allotted to ELCOT for allotment to Software

development companies. The payment of interest on the cost of land would

seriously affect the viability of the scheme (as the margin allowed to ELCOT is

only 5%). Hence the matter has been taken up with Government for waiver of

interest and the matter is being pursued.

The land cost is pending to be paid for want of Government directions. If the

payment of interest is not waived, it will be capitalized with land cost based on

AS-16.

(iii) Provision for Bad and Doubtful Debts – Trade Receivables:

No Provision has been made during the current year. Legal action has been

taken and suits have been filed wherever necessary.

(iv) ASIDE Grant:

ELCOT received ASIDE grant (Assistance to State for Development of Export

Infrastructure and Allied Activities Scheme) amounting to Rs.102.21 crores for

promotion of IT SEZ at 8 places. Separate bank account opened for the operation

of the grant. Out of the Grants received, an amount of Rs.102.18 crores was

spent for creation of infrastructure facilities at the IT SEZ leaving a balance of

Rs.3 lakhs.

65

(v) In line with our accounting policy of recognizing Revenue service charges from

the Government schemes the said revenue, on ‘Distribution of Priceless Laptop

Scheme’ in deferred in absence of relevant Government order in accordance with

para 9.4 of Accounting standard for Revenue Recognition (AS 9).However the

expenditure of Rs.28.70 Lakhs incurred for distribution of priceless Laptop

Scheme is charged under statement of Profit & Loss during the year

(vi) ELCOT received Grant in Aid (for upgrading the Tamil Nadu State Data Centre –

TNSDC) of Rs.10.54 Crores during the year 2015-16 for implementation of cloud

and web hosting services for students and young Entrepreneurs. Out of the

Grants received, an amount of Rs.4.65 Crores was spent for the same and

leaving a balance of Rs.5.89 Crores.

(vii) Land Lease Deposits:

a) Based on the opinion of Institute of Chartered Accountant of India, for the

leased under category-I upto the year 2010-2011 the land lease deposits to the

extent refundable had already been treated as current liabilities in respective

years.

b) The refundable land lease deposits under category-II to be settled within

twelve months amounting Rs.1,36,33,300/- is shown as other current liabilities.

(c) On similar basis lease deposits paid to M/s.SIPCOT for Tirunelveli

Gangaikondan SEZ have also been amortized proportionately.

(d) There is no financial impact due to these accounting treatments.

NOTE NO: 29 CONTINGENT LIABILITY:

(i) Claims against the Company not acknowledged as debt Rs.9,25,31,482/-

(Rupees Nine Crores Twenty five lakhs thirty one thousand four hundred and

eighty two only) (claimed by DOT under arbitration) claimed during 2000-01

ELCOT went on appeal and obtained stay in the Hon’ble High Court of Madras.

(ii) Appeal has been filed with Commissioner of Income Tax (Appeals) for the

following years for which contingent liability towards income tax payable as

follows:

2001-02 Rs.44,40,624/-

2006-07 Rs.69,61,227/-

66

(iii) The Commissioner of Service Tax (by way of Show cause notices) has

claimed service taxes amounting to Rs.1246.06 lakhs for the services rendered

by the Company for supply of laminated computerized Driving License Cards and

Family Cards to the Government. Reply to the show cause notice sent on

25.09.2015

(iv) ELCOT paid Rs.5.00 crores in the form of Bank guarantee for due

performance in respect of Indian Institute of Information Technology (IIIT)

Srirangam, Trichy, towards Industry Partner equivalent share on 28th June 2013

which is now reversed on 24th July 2017.

NOTE NO: 30 PENDING CAPITAL COMMITMENTS:

The estimated amount of contracts to be executed on Capital Account as on

31.3.2017 works out to Rs.1,000.00 lakhs ( previous year Rs.490.00 lakhs) for IT Infra

and Rs.6,000.00 lakhs ( Previous year Rs.4,900.00 lakhs) to IT Building.

NOTE NO: 31 CORPORATE SOCIAL RESPONSIBILITY:

In respect of CSR contribution by the company for the F.Y 2016-17, ELCOT has

furnished the details of profits available with ELCOT to the Government so as to get

appropriate direction from the Government for payment of CSR.

NOTE NO: 32 DETAILS OF SPECIFIED BANK NOTES:

Particulars SBN’s (in Rs.)

Other

Denominations

(in Rs.)

Total (in Rs.)

Closing cash in hand as on

08.11.2016 NIL 396/- 396/-

(+) Permitted receipts /

withdrawals NIL 128689/- 128689/-

(-) Permitted Payments NIL 129010/- 129010/-

(-) Amount deposited in Banks NIL NIL NIL

Closing cash in hand as on

30.12.2016 NIL 75/- 75/-

67

PENDING TAX MATTERS:

NOTE NO: 33 INCOME TAXES:

STATUS OF INCOME TAX ASSESSMENTS

Assessment

Year

Amount of Refund

as per our return

(Rs.)

Tax Implication as

per IT Dept.

(Rs.)

Forum where dispute /

Assessment is pending

2001-02 - 6704698 Hon'ble High Court-Stay

obtained by ELCOT.

2002-03 5287833 - ITAT directed the A.O. to

assess the case on merits

condoning the delay in filing

the appeal

2003-04 6462476 9352438 The Tribunal directed the

Income Tax dept to obtain

permission

2004-05 3740555 7037298 -Do-

2005-06 3977051 Appellate Authority

2006-07 NIL 7927202 Appellate Authority

2007-08 20389021 10423458 Appellate Authority

2008-09 16401707 76067042 Appellate Authority

2009-10 45099260 NIL Appellate Authority

2010-11 7692910 NIL Appellate Authority

2011-12 27514690 262540 Appellate Authority

2012-13 32396700 NIL Appellate Authority

2013-14 7207430 NIL Appellate Authority

2014-15 130,78,080 NIL Appellate Authority

2015-16 13,66,140 NIL Appellate Authority

2016-17 27,23,94,250 - Have not been taken up for

Assessment

NOTE NO: 34 SALES TAX:

Regarding sales tax assessment, TNGST assessment has been completed upto

2001-02 and CST up to 2003-04.

68

Note No: 35 GENERAL:

i. Confirmation letter for the balances of the sundry Debtors, Sundry Creditors,

various Loans and Advances, Deposits etc. as on 31.03.2017 have not been

obtained and the balances lying in these accounts are subject to reconciliation.

ii. There is no over dues to Micro ,Small and medium enterprises as on 31st March

2017.(Previous year -Nil)

iii. Previous year's figures have been regrouped and rearranged wherever

necessary for the purpose of comparison.

iv. Figures in Balance Sheet and statement of Profit & Loss and the Schedules

attached thereto have been rounded off to the nearest Rupee.

Signatures to note Nos 1 to 35

For and on behalf of the Board

P.R. Nithiyanandan CA.E. Nalini R. Sudalaikannan M.A. Siddique

Company Secretary (i/c) General Manager (F&A) Chairman & Managing Director Director

This is the notes forming part of financial statements referred to in our Report of Date

For RAGHU & MURALI

Chartered Accountants

Place : Chennai

Date : 18-Aug-17

CA.SHREEPRIYA KISHOR

Partner

Membership No.205934

Firm Regn.No.7564 S

69

INFORMATION TECHNOLOGY (ADMN.1) DEPARTMENT

GOVERNMENT’S REVIEW ON THE ANNUAL REPORT OF ELECTRONICS

CORPORATION OF TAMILNADU LIMITED FOR THE YEAR 2016-2017

Electronics Corporation of Tamil Nadu Limited was incorporated in the

year 1977 as a wholly owned enterprise of the Government of Tamil Nadu. The

Company started functioning from the year 1980-81 with the main objective of

promoting the growth of electronics industry in the State. Presently, ELCOT has

been a leading organization that has re-engineered itself as an Information

Technology (IT) enabler for Government of Tamil Nadu.

The authorized share capital of the Company is Rs.30 crores. During the

year 2016-2017 the Company earned a net profit of Rs.2975.35 lakhs as against

Rs. 7523.98 lakhs in the year 2015-2016.

Some of the activities of the Corporation during the year under review viz.

2016-2017 were as follows:-

The main activities of the corporation are as follows:

1. IT PARKS PROMOTION IN TIER II CITES

As per the policy directive of Government of Tamil Nadu, ELCOT is Promoting

Information Technology SEZ in Chennai and Tier II Cities such as Madurai,

Trichy, Hosur, Salem, Coimbatore, and Tirunelveli.

As per the orders of the Government of Tamil Nadu, lands have been

identified for the above IT Parks and the SEZ approval was obtained from the

Government of India.

Architects were engaged for the creation of common infrastructure works and

construction of 50,000 sq.ft. IT-cum-Administrative building was completed at

Trichy, Madurai, Tirunelveli, Salem and Hosur SEZs.

In Madurai-Vadapalanji IT SEZ, construction of 50,000 sq.ft cum

Administrative Building is in progress.

70

2. STUDENT PRICELESS LAPTOP SCHEME

The Government of Tamil Nadu is implementing the scheme for

distribution of priceless laptop computers to the students studying in Government

and Government-Aided Schools and Colleges in the State to facilitate them

acquire better computer skills. The Scheme was inaugurated by the Hon’ble

Chief Minister on 15.9.2011.

In the First phase, 8,98,866 Laptop Computers were procured and

supplied in the year 2011-2012. In the second Phase 7,56,000 Laptop Computers

were procured and supplied in the year 2012-2013. In the Third phase, 5,65,000

Laptop Computers were procured and supplied in the year 2013-2014.

In phase-IV & V (2014-15 and 2015-16), 10,16,028 (Phase IV – 4,96,999

Nos and Phase V- 5,19,029 Nos.) Laptop Computers were procured and

supplied.

In Phase-VI, (2016-2017), 20,210 laptop computers have been supplied

from the balance in the laptops procured for the year 2015-16. The remaining

5.16 lakhs laptop computers would be supplied soon.

3. E-GOVERNANCE INITIATIVES OF ELCOT

ELCOT's e-governance department provides end-to-end support to

Government departments in implementing e-governance projects in order to

deliver seamless, transparent and efficient services to the citizens and effect

significant reduction in the processing time. In addition to that, it also coordinates

with various Government departments and the selected vendors from the stage

of finalizing the System Requirement Study (SRS) till the successful

implementation of the projects. ELCOT also offers the Facility Management

Services (FMS) to the departments for the applications made operational through

the selected vendors.

Some of the prominent projects executed by the e-governance department

are listed below:

71

On line Lift Licensing System and Generator Tax Collection System was

implemented for the Electrical Inspectorate.

A web portal and State Skill Registry System was implemented for the

Tamil Nadu Skill Development Corporation (TNSDC).

A web portal for issuing licenses was implemented for the Directorate of

Industrial Safety and Health (DISH).

Electronic solution for “Automated Building Plan Scrutiny and Approval

System” was implemented for Directorate of Town and Country Planning

(DTCP).

Websites Created for Tamil Nadu Government Departments:

1. Conservation Authority of Pallikaranai Marshland

2. Tamil Nadu Forest Department

3. Tamil Nadu Horticulture Department

4. Finance (BC) Department

5. Tamil Nadu Infrastructure Development Board

6. Adi Dravidar Welfare Board

4. Tamil Nadu State Data Centre

Tamil Nadu State Data Centre (TNSDC) is one of the core e-Governance

back bone infrastructure of the state in operation since 01.08.2011. Originally the

scheme was implemented as a shared scheme between State and Central

Governments. Phase-I of the scheme was implemented at a cost of Rs. 60.80

crores (GOI share at Rs. 55.80 crores and State share at Rs.5.00 crores).

TNSDC is a highly secured infrastructure in which the Government

departments can host their applications. Tamil Nadu is the first state in the

country to obtain ISO certification for the Data Centre operations and

management of information security, which is an important milestone in the

operation of TNSDC. TNSDC has now obtained upgraded ISO certifications

ISO/IEC 20000-1:2011 and ISO/IEC 27001:2013.

72

TNSDC is housed at ELCOT, Perungudi complex and is being maintained

with a strict Service Level Agreement (SLA) for ensuring 24 X 7 operation. It has

been set up with 63 racks and is in the consecutive 6th successful year of

operation.

Presently, 104 applications of 25 Government departments are live from the

TNSDC -1. Some of the key Government applications which are operational from

TNSDC-1 are:

1 HMS & HMIS of Tamil Nadu Health Systems Project

2 e-Governance and e-District applications of SSDG

3 Crime and Criminal Tracking Network Systems (CCTNS)

4 e-Payment Systém of IGR

5 ERP of Chennai Corporation

6 Document Management Systém of Chennai Metro Rail Project

7 College Management Systém of Dr. MGR Medical University

8 Enterprise Resource Planning (ERP) for Priceless Fan, Mixie,

9 Grinder and Priceless Laptop Scheme, etc.

10 IFHRMS of Treasuries and Accounts Department (under implementation)

SERVER FARM:

In order to provide common test bed facilities like Load Balancer, Antivirus,

Firewall etc., to the departments while hosting applications at TNSDC, a 'Server

Farm' has been created at TNSDC with necessary hardware, software and

testing tools. This allows the departments to comply with Vulnerability

Assessment and Penetration Tests before hosting applications at TNSDC.

TNSDC – 2

As TNSDC-1, serving the hosting requirements of various Government

departments, reached 100% of its maximum capacity in terms of space,

TNSDC-2 has been sanctioned by the Government as a state sponsored

programme to be implemented at an approved project outlay of Rs. 40.00 crores

in a new building at Perungudi to cater to the additional needs of Government

Departments. Construction of the building for this scheme is nearing completion

73

and selection of Data Centre Operator for establishment, supply, commissioning,

operation and management of the Data Centre is in progress. TNSDC-2 is likely

to become operational by January 2018.

DISASTER RECOVERY CENTRE (DRC) & NEARLINE DRC (NLDRC):

DRC-TRICHY

TNSDC enables the State Government and the departments to host their

applications and services on a common, redundant, secured and controlled

environment and thereby eases the process of integration and resource

optimization. However, risk pertaining to natural disasters such as Tsunami,

Earthquakes, Floods, etc. pose a herculean challenge to any Data Centre and

hence to ensure the business continuity of the departments which are providing

e-services and to have a mirror image of their data, establishment of a Disaster

Recovery Centre has been sanctioned by the Government at Trichy and ELCOT

has been nominated as the implementing agency for setting up the Disaster

Recovery Centre (DRC) in a phased manner.

ELCOT has commenced work on establishment of the DRC and the

Operator for supply, installation, configuration, testing, operations and

management of the Disaster Recovery Centre (DRC) at ELCOSEZ, Trichy at a

cost of Rs. 53.28 crores has been selected through open tender process.

Commissioning of IT and non-IT equipments is in progress.

DR-PUNE

Under National Disaster Recovery Scheme, TNSDC has been mapped

with National Data Centre (NDC), Pune which has been enabled as the DR

Centre through National Knowledge Network (NKN) connectivity. The DR at

NDC – Pune is operational and DR facilities of CCTNS and SHDRC have been

implemented at NDC – Pune.

74

NLDRC

To address the synchronous replication requirements and for providing

Nearline Disaster Recovery solutions, ELCOT has entered into a Memorandum

of Understanding (MoU) with BSNL Data Centre. NLDR common IT

infrastructure has been created by ELCOT at BSNL DC. The requirements of the

departments are being addressed on a case to case basis on receipt of demands

from the departments.

CLOUD COMPUTING AT TNSDC:

Cloud technology facilitates optimal utilisation of IT infrastructure, enables

consolidation of IT resources and leads to power savings.

In keeping with the latest advancements in IT, Cloud set up has been

established in TNSDC through M/s. CDAC and M/s. Sify Technologies Ltd. As on

date, 22 applications have been deployed successfully in this Cloud environment

and public access enabled.

e-MAIL SOLUTIONS:

The Provisioning of e-Mail Services is an essential component of the

functioning of the Government. In order to provide seamless desktop connectivity

as well as to adhere to the regulations relating to storage and archival of emails

as official records of business processes, a full fledged e-Mail solution has been

launched and is in operation with the domain name “tn.gov.in”.

1. TRAINING INFRASTRUCTURE FACILITY

ELCOT has set up 25 user computer network with necessary UPS and

other infrastructure in each District Collectorate for training purposes. This facility

is being utilized by the district officials for imparting soft skills to the officials of

Government Departments.

75

2. TAMIL NADU STATE WIDE AREA NETWORK (TNSWAN)

State Wide Area Network is another core e-Governance infrastructure

created under the National e-Governance Plan (NeGP) as a shared scheme

between the State and the Central Governments. Phase-1 operations

(01.12.2007 to 30.11.2012) of TNSWAN were implemented at an estimated cost

of Rs.140.25 crores (GoI Rs.55.73 crores and State Rs.84.52 crores). Phase 2

operations (09.09.2013 to 08.09.2016) of TNSWAN have been wholly funded

(Rs. 74.69 crores) by the State Government. Now, TNSWAN is under interim

period operations for which sanction of funds to the tune of Rs.36.90 crores is

awaited from the Government.

TNSWAN Phase 3

Detailed Project Report (DPR) for a value of Rs.437.96 crores for

TNSWAN Phase-3 operations has been submitted to the Government for

administrative approval and sanction of funds. Orders of the Government are

awaited.

II. (a) TNSWAN Vertical Connectivity

TNSWAN core network has 708 nodes (POPs - Point of Presence), which

were created at the Secretariat, Raj Bhavan, DGP Office, Commissioner of

Police, Corporation of Chennai, Government Complexes such as DPI, DMS,

Ezhilagam, Panagal Building and Kuralagam at Chennai and at the Collectorates,

Revenue Divisional Offices, Taluk offices and Block Development Offices in the

districts. This network provides a link to all the Government departments by

providing voice, data and video connectivity for improving the delivery of services

to the public, for improving the response time and transparency and to enable the

Government departments to access their servers hosted at TNSDC. This network

was established under Build, Own, Operate and Transfer (BOOT) mode and was

completed on 30.11.2012. The 3 year Phase-2 operations were completed on

08.09.2016 and the network is currently under interim operations. Strict Service

Level Agreement (SLA) is being adhered to in vertical connectivity on 24x7 basis.

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The following services are provided to Government departments through

TNSWAN.

1 Secured Intranet Application Access

2 Secured Internet Access

3 Closed User Group Voice Services

4 Video Conferencing Services

TNSWAN and NKN have been integrated at the District Head Quarters

(DHQ) level as per the guidelines of the Ministry of Electronics and Information

Technology (MeitY), Government of India. With this integration, the bandwidth at

DHQ has been upgraded to 34 Mbps / 100 Mbps / 1Gbps as per the

requirements.

I. (b) Horizontal Connectivity

Government offices have been connected to TNSWAN POPs for availing intranet

facility for rolling out the department's applications that are hosted at TNSDC.

Intranet services such as voice, data, internet, video conferencing, etc. are also

provided to the offices. Horizontal Connectivity has also been made available

through TNSWAN Points of Presence (PoPs) to Government Departments.

So far, horizontal connectivity has been provided to more than 5000

offices of Government departments viz., Commercial Taxes, Tamil Nadu Water

Supply and Drainage Board (TWAD), Tamil Nadu Health Systems Project

(TNHSP), Treasuries & Accounts, Registration, Employment & Training, Forest,

Transport, Tamil Nadu e-Governance Agency (TNeGA), State Health Society,

Tamil Nadu Housing Board (TNHB), Survey and Settlement, Tamil Nadu Cement

Corporation Limited (TANCEM), Tamil Nadu Civil Supplies Corporation, etc.

I. (c) Redundant Connectivity

TNSWAN vertical connectivity is provided to all districts, taluks, BDOs and

RDOs using the bandwidth provided by NKN/BSNL. In order to ensure

uninterrupted connectivity at the districts, taluks, BDOs and RDOs, a secondary

2 Mbps MPLS-VPN (1:1) redundant connectivity has been established.

Provisioning for 210 links has been established so far.

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II. National Knowledge Network (NKN)

National Knowledge Network (NKN) is a national level high speed network

established by Government of India. NKN provides a common platform to the

scientists, researchers, doctors, scholars and students to work together for

advancing human development by connecting the academic institutions across

India and the global scientific community.

Bandwidth through NKN is being provided by Bharat Sanchar Nigam

Limited (BSNL), Power Grid Corporation of India Limited (PGCIL) and RailTel.

NKN also provides network platform for National e-Governance Plan (NeGP)

projects for their roll out at the national level. This consists of an ultra-high speed

core, starting with multiple 2.5/10 Gigabits per second and progressively moving

towards 40/100 Gigabits per second (Gbps) connectivity. Two links of 1 Gbps

speed from NKN have been terminated, one each at TNSWAN and TNSDC with

100 Mbps Internet connectivity.

Through the NKN connectivity, all the TNSWAN and TNSDC users can

also access the applications that are hosted at the national level. The

applications can be accessed through NKN at a very high speed Internet

bandwidth, which is several times faster than the earlier speed.

III. Internet Leased Line and MPLS

Internet leased line connectivity is being offered at various speeds varying

from 1 Mbps to 45 Mbps speed to the departments dealing with large amount of

dynamic data. At present, leased line connectivity is being provided to

departments / organisations such as CMWSSB, Corporation of Chennai, Director

of Rural Development, Archaeology, Tamil Nadu Pollution Control Board, etc.,

MPLS connectivity is being offered at various speeds varying from 256 Kbps to 8

Mbps at spoke end and 2 Mbps to 100 Mbps as aggregation link as a redundant

connectivity to TNSWAN or direct link to the departments. This connectivity is

being provided to various departments such as TN Housing Board, Treasuries

and Accounts, Commercial Tax Department, etc.

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7. PROCUREMENT ACTIVITIES

ELCOT has adopted an innovative procurement policy by encouraging

competition among the vendors coupled with an open and transparent

procurement process. ELCOT had achieved a price reduction of 20-30% of the

market value of the products, thus saving crores of rupees of Government

departments.

During the year 2016-17, ELCOT procured IT products for a value of

Rs.87.21 Crores and has a projected procurement of Rs.150 Crores for the year

2017-18.

8. PARTICIPATION IN NATIONAL AND INTERNATIONAL EVENTS

To promote Tamil Nadu as a preferred destination of choice for IT and

ITES investments, ELCOT has participated in the following major national events:

1 NASSCOM HR summit 2016 held at Chennai during July 2016.

2 CONNECT 2016 held at Chennai during September 2016.

3 ICTACT Bridge 2016 held at Chennai during February 2016.

4 India International Trade Fair (IITF) 2016 held at New Delhi during

November 2016.

5 India Tourist and Industrial Fair 2017 held at Chennai during

January 2017 to March 2017.

6 ELCINA 2017 held at Chennai during January 2017.

7 NASSCOM India Leadership Forum 2017 held at Mumbai during

February 2017.

9. DRIVING LICENCE CARD

Preparation and issue of Laminated Computerized Driving License has been

entrusted with ELCOT by the Transport Commissioner in all the 138 centres in

the State. During the financial year (2016–2017) under report, this activity

fetched Rs. 8.68 crores of revenue to ELCOT. All the 138 centres are run by

ELCOT with part of the hardware and entire manpower outsourced by M/s.

Keltron.

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10. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE

FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END

OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT

RELATES ON THE DATE OF THE REPORT:

No material change / commitment affecting the Financial position of the

company occurred between the end of the financial year to which this financial

statement relates to the date of the report.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE & OUTGO

The provisions of Section 134 (m) of the Companies Act, 2013 do not

apply to our Company. There were no foreign exchange earnings and outgo

during the year under review.

12. RISK MANAGEMENT

The Company does not have any risk management policy as the elements of

risk threatening the Company’s existence is very minimal.

13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

In respect of CSR contribution by the company for the F.Y. 2016-17,

ELCOT has furnished the details of profits available with ELCOT to the

Government so as to get appropriate direction from the Government for payment

of CSR.

14. PARTICULARS OF LOANS AND GUARANTEES ON THE

INVESTMENTS MADE UNDER SECTION 186 OF COMPANY’S ACT 2013:

There were no loans and guarantees on the investments made by the

Company under Section 186 of the Companies Act, 2013 during the year under

review and hence the said provision is not applicable.

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15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH

RELATED PARTIES:

There was no contracts or arrangements as defined under section 188 of

the Company’s Act 2013 during the year under review.

16. EXPLANATION OR COMMENTS ON QUALIFICATION, RESERVATION

OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN

THE REPORT:

There was no qualification, reservation or adverse remarks or disclaimers

made by the auditors in the report. The provision relating to the submission or

Secretarial Audit report is not applicable to the Company.

17. COMPANY’S POLICY RELATING TO DIRECTOR’S APPOINTMENT,

PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:

The provision of Section 178(1) relating to constitution of nomination and

recommendation committee are not applicable to the Company and hence the

Company has not devised and policy relating thereto Director’s appointment,

payment of remuneration and discharge of their duties and provided under

section 178(3) of the Company’s Act 2013.

18. EXTRACTS OF ANNUAL RETURN:-

The extracts of Annual Return as per Section 92(3) of the Companies Act

2013 read with Rule 12(1) of the Companies (Management and Administration)

Rule 2014 is given in Annexure I.

19. MEETING OF THE BOARD OF DIRECTORS

During the Financial year ended 31st March 2017, the Company held

Meetings of the Board of Directors as per Section 173 of Companies Act, 2013

which is summarized below. The provisions of Companies Act, 2013 were

adhered to while considering the time gap between meetings.

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S.

No.

Date of meeting Board

Strength

No. of Directors

present

1 200/31.05.2016 6 4

2 201/30.09.2016 7 3

3 202/13.10.2016 7 6

4 203/08.02.2017 7 6

5 204/20.03.2017 7 6

20. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year.

21. SHARE CAPITAL

The paid up capital as on 31st March 2017 is Rs.2,593.05 lakhs.

CHANDRA MOHAN B.,

Secretary to Government

//True copy//

Section Officer