UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

___________________________________________



FORM 20-F



(Mark One)



| |  ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------------



Or



| | þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
| | - | -------------------------------------------------------------------------------------



For the fiscal year ended March
31, 2020.



Or



| |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
| | - | -----------------------------------------------------------------------------------------

For the transition period from
 to



| |  ̈ | SHELL COMPANY PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
| | - | -------------------------------------------------------------------------------------

Date of event requiring this
shell Company report



Commission file number 000-27663



Sify Technologies Limited

(Exact name of Registrant as specified
in its charter)



Not Applicable

(Translation at Registrant’s name
into English)



Chennai, Tamil Nadu, India

(Jurisdiction of incorporation or organization)



TIDEL Park, 2nd Floor

4, Rajiv Gandhi Salai

Taramani, Chennai 600 113 India

(91) 44-2254-0770, Fax (91) 44 -2254 0771

(Address of principal executive office)



M.P.Vijay Kumar, Chief Financial Officer,
(91) 44-2254-0770; vijaykumar.mp@sifycorp.com

TIDEL Park, 2nd Floor, 4, Rajiv Gandhi Salai,
Taramani, Chennai 600113 India

(Name, Telephone, Email and/or Facsimile
number and Address of Company Contact Person)



Securities registered or to be registered
pursuant to Section 12(b) of the Act



|Title of each class                                                                        |  | Trading Symbol |  | Name of each Exchange on which registered
|------------------------------------------------------------------------------------------ |  | -------------- |  | -----------------------------------------
|                                                                                           |  |                |  |                                          
|American Depository Shares, each represented by One Equity Share, par value ₹ 10 per share |  | SIFY           |  | NASDAQ Capital Market (NASDAQ-CM)        



Securities registered or to be registered
pursuant to Section 12(g) of the Act



|Title of each class |  | Name of each Exchange on which registered
|------------------- |  | -----------------------------------------
|                    |  |                                          
|None                |  | Not Applicable                           



Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act



Not Applicable



(Title of class)



Indicate the number of outstanding shares
of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.



179,223,247 Equity
Shares.



Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.





Yes  ̈No
þ





If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.





Yes  ̈No
þ





Note - Checking the box above will not
relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their
obligations under those Sections.



Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.







Yes þNo
 ̈







Indicate by check mark whether the registrant
has submitted electronically, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation
S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).





Yes þNo
 ̈





Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer or an emerging growth company. See definition of
“large accelerated filer,” and large “accelerated filer,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act. (Check one):



|Large accelerated filer ̈ | Accelerated filer ̈ | Non-accelerated filerþ
|------------------------ | ------------------ | ----------------------
|Emerging growth company ̈ |                    |                       





If an emerging growth company that prepares
its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.    ☐



Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report. þ



Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:





|US GAAP ̈ | International Financial Reporting Standards as          |       
|-------- | ------------------------------------------------------- | ------
|         | issued by the International Accounting Standards Boardþ | Other ̈







If “Other” has been checked
in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:    ☐ Item 17    
☐ Item 18



If this is an annual report, indicate by
check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act).





Yes  ̈No
þ


















Table of Contents



|Item                                               |                                                                              | Page
|-------------------------------------------------- | ---------------------------------------------------------------------------- | ----
|                                                   |                                                                              |     
|Currency of Presentation and Certain Defined Terms | 3                                                                           
|Forward-Looking Statements                         | 4                                                                           
|                                                   |                                                                             
|PART I                                             |                                                                              |     
|                                                   |                                                                              |     
|Item 1.                                            | Identity of Directors, Senior Management and Advisers                        | 5   
|Item 2.                                            | Offer Statistics and Expected Timetable                                      | 5   
|Item 3.                                            | Key Information                                                              | 5   
|Item 4.                                            | Information on the Company                                                   | 30  
|Item 4A.                                           | Unresolved Staff Comments                                                    | 43  
|Item 5.                                            | Operating and Financial Review and Prospects                                 | 43  
|Item 6.                                            | Directors, Senior Management and Employees                                   | 61  
|Item 7.                                            | Major Shareholders and Related Party Transactions                            | 69  
|Item 8.                                            | Financial Information                                                        | 73  
|Item 9.                                            | The Offer and Listing                                                        | 75  
|Item 10.                                           | Additional Information                                                       | 75  
|Item 11.                                           | Quantitative and Qualitative Disclosures About Market Risk                   | 100 
|Item 12.                                           | Description of Securities Other Than Equity Securities                       | 101 
|                                                   |                                                                              |     
|PART II                                            |                                                                              |     
|                                                   |                                                                              |     
|Item 13.                                           | Defaults, Dividend Arrearages and Delinquencies                              | 102 
|Item 14.                                           | Material Modifications to the Rights of Security Holders and Use of Proceeds | 102 
|Item 15.                                           | Controls and Procedures                                                      | 102 
|Item 16A.                                          | Audit Committee Financial Expert                                             | 105 
|Item 16B.                                          | Code of Ethics                                                               | 105 
|Item 16C.                                          | Principal Accountant Fees and Services                                       | 105 
|Item 16D.                                          | Exemptions from the Listing Standards for Audit Committees                   | 105 
|Item 16E.                                          | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       | 105 
|Item 16F.                                          | Change in Registrant’s Certifying Accountant                                 | 106 
|Item 16G.                                          | Corporate Governance                                                         | 106 
|Item 16H.                                          | Mine Safety Disclosure                                                       | 106 
|                                                   |                                                                              |     
|PART III                                           |                                                                              |     
|                                                   |                                                                              |     
|Item 17.                                           | Financial Statements                                                         | 107 
|Item 18.                                           | Financial Statements                                                         | 107 
|Item 19.                                           | Exhibits                                                                     | 170 



2







Currency of Presentation and Certain
Defined Terms



Unless the context
otherwise requires, references in this annual report to “we,” “us,” the “Company,” “Sify”
or “Satyam Infoway” are to Sify Technologies Limited, a limited liability Company organized under the laws of the Republic
of India. References to “U.S.” or the “United States” are to the United States of America, its territories
and its possessions. References to “India” are to the Republic of India. In January 2003, we changed the name of our
Company from Satyam Infoway Limited to Sify Limited. In October 2007, we again changed our name from Sify Limited to Sify Technologies
Limited. “Sify”, “SifyMax.in,”, “Sify e-ports” and “Sify online”
are trademarks used by us for which we have already obtained registration certificates in India. All other trademarks or trade
names used in this Annual Report on Form 20-F for the year ended March 31, 2020 (the “Annual Report”) are the property
of their respective owners. In this Annual Report, references to “$,” “Dollars” or “U.S. dollars”
are to the legal currency of the United States, and references to “₹”, “Rs.,” “rupees”
or “Indian rupees” are to the legal currency of India. References to a particular “fiscal” year are to
our fiscal year ended March 31 of such year. References to the “Group” mean Sify Technologies Limited and its subsidiaries.
References to “equity shares” refer to our Indian Equity Shares, which are not traded on an exchange in India or the
United States. References to “ADSs” refer to our American Depositary Shares, which are traded on the NASDAQ Capital
Market under the symbol “SIFY.”



For your convenience,
this Annual Report contains translations of some Indian rupee amounts into U.S. dollars which should not be construed as a representation
that those Indian rupee or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Indian rupees, as the
case may be, at any particular rate, the rate stated below, or at all. Except as otherwise stated in this Annual Report, all translations
from Indian rupees to U.S. dollars contained in this Annual Report have been based on the reference rate in the City of Mumbai
on March 31, 2020 for cable transfers in Indian rupees as published by the Reserve Bank of India (RBI), which was ₹ 75.386
per US $1.00.



Our financial statements
are presented in Indian rupees and prepared in accordance with English version of International Financial Reporting Standards as
issued by the International Accounting Standards Board, or IFRS. In this Annual Report, any discrepancies in any table between
totals and the sums of the amounts listed are due to rounding.



Information contained
in our websites, including our corporate website, www.sifytechnologies.com, is not
part of this Annual Report.



3







Forward-Looking Statements



This Annual Report contains “forward-looking
statements”, as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, that are based on our current expectations, assumptions, estimates and projections about our Company,
our industry, economic conditions in the markets in which we operate, and certain other matters. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology such as ‘anticipate’, ‘believe’,
‘estimate’, ‘expect’, ‘may’, ‘intend’, ‘will’, ‘project’,
‘seek’, ‘should’ and similar expressions. Those statements include, among other things, the discussions
of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity
and capital resources. These statements are subject to known and unknown risks, uncertainties and other factors, which may cause
actual results or outcomes to differ materially from those implied by the forward-looking statements. Important factors that may
cause actual results or outcomes to differ from those implied by the forward-looking statements include, but are not limited to,
those discussed in the “Risk Factors” section in this Annual Report. In light of these and other uncertainties, you
should not conclude that the results or outcomes referred to in any of the forward-looking statements will be achieved.



We operate in rapidly changing businesses,
and new risk factors emerge from time to time. We cannot predict every risk factor, nor can we assess the impact, if any, of all
such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ
materially from those projected in any forward-looking statements. All forward-looking statements included in this Annual Report
are based on information available to us, and reflect management’s beliefs, on the date hereof, and we do not undertake to
update these forward-looking statements to reflect future events or circumstances. In addition, readers should carefully review
the other information in this Annual Report and in our reports and other documents filed with the United States Securities and
Exchange Commission (“SEC”) from time to time.



4







PART I



Item 1. Identity of Directors, Senior
Management and Advisers.



Not applicable.



Item 2. Offer Statistics and Expected
Timetable



Not applicable.



Item 3. Key Information



Selected Financial Data



Summary of Consolidated Financial Data



You should read the
summary of consolidated financial data below in conjunction with the Company's consolidated financial statements and the related
notes, as well as the section entitled “Operating and Financial Review and Prospects,” all of which are included elsewhere
in this Annual Report. The summary of consolidated statements of income data for the five years ended March 31, 2020, 2019, 2018,
2017 and 2016 and the summary of consolidated Statement of Financial Position as of March 31, 2020, 2019, 2018, 2017 and 2016 have
been derived from our audited consolidated financial statements and related notes to the consolidated financial statements which
were prepared and presented in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting
Standards Board (IASB). Historical results are not necessarily indicative of future results.



5







Sify Technologies Limited

Consolidated Statement of Income

(In thousands of Rupees, except share and
per share data and as otherwise stated)



|                                                                |  | Year ended March 31, |            
|--------------------------------------------------------------- |  | -------------------- | -----------
|                                                                |  | 2020 ₹               |            
|                                                                |  |                      |            
|Revenue                                                         |  |                      | 22,952,067 
|Cost of goods sold and services rendered                        |  |                      | (14,364,827
|Other income                                                    |  |                      | 97,155     
|Selling, general and administrative expenses                    |  |                      | (4,513,646 
|Depreciation and amortization                                   |  |                      | (2,290,777 
|Profit / (loss) from operating activities                       |  |                      | 1,879,972  
|                                                                |  |                      |            
|Finance income                                                  |  |                      | 193,877    
|                                                                |  |                      |            
|Finance expenses                                                |  |                      | (1,054,133 
|Net finance income / (expense)                                  |  |                      | (860,256   
|Profit / (loss) before tax                                      |  |                      | 1,019,716  
|Income tax (expense) / benefit                                  |  |                      | (314,339   
|Profit / (loss) for the year attributable to equity
    holders |  |                      | 705,377    
|                                                                |  |                      |            
|Earnings per share                                              |  |                      |            
|Basic earnings per share                                        |  |                      | 3.94       
|Diluted earnings per share                                      |  |                      | 3.90       
|                                                                |  |                      |            
|Dividend paid per share *                                       |  |                      |            
|Fully paid up (₹ 10 per share)                                  |  |                      | -          
|Partly paid up (₹ 7.75 per share)                               |  |                      | -          



* Excluding dividend distribution tax



6







Particulars

(Rupees in thousands, except share and
per share data)

Balance Sheet data



|                                                                |  | March 31, |             |   | Convenience translation
                                                                                                   into US$ in
                                                                                                   thousands,
                                                                                                   except share
                                                                                                   and per share
                                                                                                   data (see note 1 ) | 
|--------------------------------------------------------------- |  | --------- | ----------- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                                                                |  | 2020      |             |   | 2019                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|                                                                |  | ₹         |             |   | ₹                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|Cash and cash equivalents including restricted cash             |  |           | 2,651,085   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|                                                                |  |           |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Net  current assets                                             |  |           | 142,564     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|                                                                |  |           |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Total assets                                                    |  |           | 34,255,392  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|                                                                |  |           |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Total equity attributable to equity shareholders of the Company |  |           | 11,351,308  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|                                                                |  |           |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Capital Stock                                                   |  |           | 21,163,069  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|No of equity shares                                             |  |           | 179,223,247 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|                                                                |  |           |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Cash Flow Data                                                  |  |           |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Net cash provided by / (used in):                               |  |           |             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Operating activities                                            |  |           | 5,042,818   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Investing activities                                            |  |           | (4,326,319  | ) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
|Financing activities                                            |  |           | 3,921       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 



Notes



| | 1. | Reference to shares and per share amounts refers to our equity shares. Our outstanding equity shares
include equity shares held by a depository underlying our ADSs. Effective September 24, 2002, one ADS represented one equity share.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7







Exchange Rates



Our functional currency is the Indian rupee.
The exchange rate between the rupee and the U.S. dollar has changed substantially in recent years and may fluctuate substantially
in the future. Our exchange rate risk primarily arises from our foreign currency revenues, receivables and payables.



On March 31, 2020, the reference rate in
the City of Mumbai for cable transfers in Indian rupees as published by RBI was ₹75.386.



On July 27, 2020, the reference rate in
the City of Mumbai for cable transfers in Indian rupees as published by RBI was ₹74.76



Capitalization and indebtedness



Not applicable.



Reasons for the offer and use of proceeds



Not applicable.



Risk Factors



Investing in our American Depositary Shares,
or ADSs, involves a high degree of risk. This Annual Report contains forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of
factors, including those described in the following risk factors and elsewhere in this Annual Report. If any of the risks actually
occur, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event,
the market price of our ADS could decline, and you could lose part or all of your investment. Our business, operating results,
financial performance, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently
do not believe are material.



COVID-19 Impact



The COVID-19 pandemic
is having an impact on our entire risk landscape and will continue to impact, the extent of which depends on various factors which
are beyond the control of the Group. We have incorporated COVID-19 commentary below, which gives an overview of the related
uncertainties and potential impacts on the Group. These are to be considered along-with the principal risk factors that are highlighted
below.



COVID-19 PANDEMIC



The global COVID-19 pandemic
is having an impact on our associates, operations, suppliers, customers, governments and the general public. The COVID-19 pandemic
has resulted in a series of measures implemented by governments around the world aimed at mitigating the further spread of the
virus. These measures include restrictions on travel, closure of national borders, imposition of quarantines, prolonged closures
of workplaces and curfews or other social distancing measures. The extent of the impact on the Group is dependent on a variety
of factors including, but not limited to, the length of lockdowns in India and the geographies in which our customers and suppliers
operate, levels of employee absence, virus recurrence, insolvency rates, unemployment levels, nature and extent of any government
interventions, severity of economic effects and the subsequent speed and nature of the recovery.



The COVID-19 pandemic
has resulted in adverse impacts on sales activity and demand, which may be partially offset by increased use of connectivity, data
center and cloud usage by existing customers. There is a potential that supply chain issues and/or prolonged associate absence
may inhibit our ability to deliver products and services to customers, with an associated impact on our customer experience.



With a prolonged
economic downturn, we may be exposed to material bad debt if a significant number of our large corporate customers and smaller
and medium enterprises experience financial distress or insolvency. The collective impacts of the pandemic and associated economic
downturn could negatively impact our cash position and ability to fund desired investment projects and ongoing operations.



Due to the uncertainty of the duration
and economic impact of the COVID-19 pandemic, we are continually evaluating variety of scenarios with the financial impacts
across the Group, as well as assessing the liquidity mitigation options that could be used if required. We have also carried out
risk assessments for each of our customer-facing business units, considering potential strategic, operational, regulatory and associate
related impacts.



8







The following are the risk factors that
we envisage to be affected as a result of COVID-19 Pandemic:



Political Risk



The COVID-19 pandemic
presents challenges related to our infrastructure resilience, support for staff and customers, with any failure to manage these
challenges likely to create governmental and political pressure on the Group.



Industry Regulations



Our associates
are focused on maintaining critical services and meeting customers’ needs. An inflexible approach to regulation during the
COVID-19 pandemic could stretch the delivery capability of our associates and could result in significant non-compliance.



Cyber Security



The sustained
absence of key staff due to the COVID-19 pandemic could adversely affect our ability to defend against cyber-attacks. We continue
to develop our cyber defense capability, make use of proactive threat-hunting and invest more in automatic detection and prevention
systems. If we are unable to successfully implement these enhancements, we may not be able to keep pace with the evolving threat
and protect our assets and our customers’ assets.



Supply Chain



Our supply chain
which has a combination of global partners and domestic partners in India, could be adversely affected by the COVID-19 pandemic.
While we take all efforts to minimize the risks, any adverse impact on our supply chain could impact our customer experience, result
in higher costs and cause potential damage to our brand.



IT Projects



Our IT projects
with reference to improving customer experiences, automate processes, simplify products play critical role in our transformation
journey. With the COVID-19 pandemic, the resources could become scarcely available for these transformational projects (e.g., shortage
due to availability, remote working and also other important developments due to the impact of COVID-19) and could negatively impact
customer experience, operational efficiency and thereby ability to make future investments.



Customer Projects



COVID-19 related challenges like associate
absenteeism, impact on supplier and customer businesses, may also impact our ability to deliver all aspects of the projects. There
are delays in recognition of a small portion revenue, as there are delays in obtaining sign-off from customers. Due to the negative
business impact on our clients’ business and operations, there have been requests for discount, delayed payment terms and
postponement of new installations. There are possibilities of invocation of Force Majeure clauses in contract. All of these may
impact our future revenue, profitability and cash generation adversely.



Associate Engagement



Due to cost optimization
and austerity measures that may be required to be taken by us if the COVID-19 pandemic adversely affects our businesses and liquidity
in the future, we may fail to retain employees and attract suitable talents to the company. The productivity of our employees may
be negatively impacted due to isolated remote working from home, quarantine requirements, negative social sentiment and personal
anxiety. Our operations could get disrupted if any of the employees test positive for COVID-19 after returning to office. We could
be subject to lawsuits from employees alleging exposure to health risks as we transition them to working from office or clients’
place. All these could further adversely affect our ability to continue the operations and develop our business.



9







Risk of Fixed
Cash Outflow



A few of our business
have fixed costs like office space, associate costs and there are semi-variable costs like networking costs, maintenance costs,
power and fuel costs. With the adverse impact of COVID-19, we might have to continue to make payments towards these expenses irrespective
of the amount we would be able to receive from the customers. Cost of insurance could go up due the impact of COVID-19 on insurance
companies. This could adversely impact profitability and liquidity of the Group. A deterioration in liquidity might have an adverse
effect of Board’s assessment of going concern.



Expansion and
Replacement Capex



COVID-19 pandemic
could adversely impact customer demands and also the liquidity and/or ability to raise additional funds for expansion of business
and replacement of existing capital expenditure to sustain current businesses. This could affect our ability to grow and make profits.



Compliance
Costs



Due to stricter regulations due to COVID-19,
our cost of compliance of safety regulations for associates, partners, customers and vendors could increase. Higher costs have
to be incurred to ensure a safe and hygienic workplace for operations that are run from office. This would impact the profitability
which might not be correspondingly reflected in the product pricing.



Significant Control Failure



COVID-19 pandemic has had significant impact
in the way our business processes are being carried out. Due to the demanding times and the changes that were required to be made
to combat the situation causes, our internal controls over financial reporting could have been exposed to inherent risks which
may not help us prevent or detect misstatements. This could result in financial misstatement, financial loss or key decision being
taken based on incorrect information.



Privacy and Data Protection



Due to COVID-19 pandemic, an increased
number of our associates are currently working from home, which presents additional data security and privacy related risks.



Geo-political Risks



The COVID-19 pandemic presents challenges
related to our infrastructure resilience, support for staff and customers and related to macro-economic factors like, increase
in unemployment across economies, extended recession in the economy, with any failure to manage these challenges likely to create
geo-political tension and social unrest, which could impact the profitability of the Group.



Risks Related to our Company and Industry



We may incur losses in the future
and we may not achieve or maintain profitability.



We have in the past
incurred losses. We may, in the future incur net losses and suffer negative operating cash flows. We expect to increase our expenditures
as we continue to expand our services, promote our brand, and invest in the expansion of our infrastructure. In the future, we
may incur expenses in connection with investments in Network, Data Centers and related infrastructure. Accordingly, we will need
to significantly increase our revenues in order to improve our profitability. We cannot assure you that we will improve our profitability
or that we will not incur operating losses in the future. If we are unable to become consistently profitable and incur losses,
we may be unable to build a sustainable business and our results of operations may be adversely affected. In this event, the
price of our ADSs and the value of your investment may decline.



The economic
environment, increased pricing pressure and decreased utilization rates could negatively impact our revenues and operating results.



IT
spending of customers is often driven by the growth in revenue of customers. Global economic slowdown in the past has reduced the
IT spending budgets of our customers and have in the past adversely affected and may in the future adversely affect our revenue,
profitability and results of operation. Global economic performance also has a bearing on our Infrastructure and e-Learning businesses.
Currency fluctuations will also lead to variations in revenue. The Infrastructure Managed Services, National Long Distance (‘NLD’)
/ International Long Distance (‘ILD’) business and eLearning may be affected in terms of prices and growth.



10







With
regard to the Indian economy, we continue to experience pricing pressure due to competition in the markets in which we operate. Lead
times for orders or contracts have become much longer, as we have longer credit periods. These factors have affected and will affect
the growth in demand for our corporate business.



We
have invested in building our network and Data Center infrastructure and will continue to invest in the future. Our utilization
rates of the existing and prospective infrastructure will determine our profitability. We may not utilize our infrastructure at
the optimum level which would impact our revenue.



Reduction
in IT spending, inability to maintain or increase prices, extended credit terms, and inability to maintain or improve utilization
rates of our infrastructure may adversely impact our revenues, gross profits, operating margins and results of operations.



Currency fluctuations may affect
the results of our operations or the value of our ADSs.



The exchange rate between
the Indian rupee and the U.S. dollar has changed significantly in recent years and may continue to fluctuate substantially in the
future.



We use derivative financial
instruments, such as foreign exchange forward and option contracts, to mitigate the risk of changes in foreign exchange rates on
accounts receivable, payable, foreign currency loans and forecast cash flows denominated in US dollar. We may not purchase derivative
instruments for an amount sufficient to adequately insulate ourselves from foreign currency exchange risks. We have entered into
interest rate swap transactions. Exchange rate fluctuations may adversely impact our cash flows on these transactions.



For the year ended
March 31, 2020, we have recognized a net loss of ₹ 2.98 million ($0.04 million) arising on account of foreign exchange fluctuations.
If foreign exchange currency markets continue to be volatile, such fluctuations in foreign currency exchange rates could materially
and adversely affect our results of operations in future periods. Also, the volatility in the foreign currency markets may make
it difficult to hedge our foreign currency exposures effectively and make them expensive.



Further, the policies
of the Reserve Bank of India (RBI) may change from time to time which may limit our ability to hedge our foreign currency exposures
adequately. Full or increased capital account convertibility, if introduced, could result in increased volatility in the fluctuations
of exchange rates between the Indian rupee and US dollar. Our US customers may leave us exposed to fluctuation in revenues based
on currency fluctuations.



A significant portion
of our revenue arises from exports in foreign currency and hence, any appreciation/ depreciation in Indian Rupee in relation to
any foreign currency may affect our revenue and profits.



In July 2012, the RBI
mandated conversion of foreign currency balances held in Export Earners Foreign Currency (EEFC) Accounts, before the end of subsequent
month of the transaction. This may force us to convert foreign currency balances to INR at an unfavorable exchange rate, which
will result in loss.



Intense
competition in our businesses could prevent us from improving our profitability and we may be required to further modify the rates
we charge for our services in response to new pricing models introduced by new and existing competition which would significantly
affect our revenues.



We
operate in extremely competitive markets where the investment capability and the size of the competitors are much larger than us.
For instance, Our corporate network services compete with well-established companies, including Bharti Airtel, Tata Communications
Limited, the Government-owned telecom companies, Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited and new players
like Reliance Jio



The
large players, may enjoy significant competitive advantages over us, including greater financial resources, which could allow them
to charge prices that are lower than ours in order to attract customers. These factors could result in actual average selling prices
of our services. With the entry of a new player, the retail internet market has seen significant reduction in prices by all operators
due to pricing strategy by the new entrant. This has significantly affected the customer base and the average revenue per user
of the existing operators. We may see similar trends in enterprise market as well, which may have an adverse effect on our revenues
and operating margins. We expect the market for Internet access and other connectivity services to remain extremely price competitive.
Increased competition may result in operating losses, loss of market share and diminished value in our services, as well as different
pricing, service or marketing decisions. In addition, competition may generally cause us to incur unanticipated costs associated
with research and product development. Additionally, we believe that our ability to compete also depends in part on factors
outside our control, such as the availability of skilled employees in India, the price at which our competitors offer comparable
services, and the extent of our competitors’ responsiveness to their clients’ needs. We cannot assure you that we will
be able to successfully compete against current and future competitors, or that we will not lose key employees or customers to
such competitors, which may adversely affect our business and results of operations.



11







Pressure on margins may affect the
results of our operations.



Our margins have been
relatively stagnant due to competitive pricing pressure. While we seek to manage costs efficiently, there may not be improvements
in margins due to the sustained pricing pressure. Unavailability of tax loss carryforwards might impact our margins in the current
year and the future. Our continuing investment in infrastructure may result in lower margins in the initial years of investment
and may or may not improve further, which will adversely impact our margins.



We may fail to meet such obligations
of export under the Export Promotion Capital Goods Scheme (EPCG) and be subjected to penalties.



We
have been availing duty benefit for our import of capital goods under the EPCG scheme available for export of services. Under the
scheme, we are eligible to import capital goods without import duty with an obligation to generate export earnings to the extent
of 6 times the value of such duty benefit availed within a period of 6 years over and above the annual average export obligation.
Though there are export earnings at present, we may fail to fulfill such obligation in the future. In the case of a shortfall in
fulfilment of such export obligation, we may be subjected to repay the duty benefit availed along with interest.



Our business
will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes
in technology



The
technology market is characterized by rapid technological change, evolving industry standards, changing client preferences and
new product and service introductions. Our future success will depend on our ability to anticipate these advances and develop new
product and service offerings to meet client needs. We may fail to anticipate or respond to these advances on a timely basis, or,
if we do respond, the services or technologies that we develop may not be successful in the marketplace. We have introduced and
propose to introduce several solutions involving complex delivery models combined with innovative outcome-based pricing models.
The complexity of these solutions, our inexperience in developing or implementing them and significant competition in the markets
for these solutions may affect our ability to market these solutions successfully. In addition, better or more competitively priced
products, services or technologies that are developed by our competitors may render our service non-competitive.



Despite
our best efforts to optimize costs, our future operating results could fluctuate in part because our expenses are relatively fixed
in the short term while future revenues are uncertain, and any adverse fluctuations could negatively impact the price of our ADSs.



Our
revenues, expenses and operating results have varied in the past and may fluctuate significantly in the future due to a number
of factors, many of which are outside our control. A significant portion of our investment and cost base is relatively fixed in
the short term. Our revenues in the foreseeable future will depend on many factors, including the following:



| | • | the range of services provided by us and the usage thereof by our customers;
| | - | ----------------------------------------------------------------------------



| | • | the quantum and nature of any agreements we enter into with strategic partners for our services;
| | - | ------------------------------------------------------------------------------------------------



| | • | the services, products or pricing policies introduced by our competitors;
| | - | -------------------------------------------------------------------------



| | • | capital expenditure and other costs relating to our operations;
| | - | ---------------------------------------------------------------



| | • | the timing and quality of our marketing efforts;
| | - | ------------------------------------------------



| | • | our ability to successfully integrate operations and technologies from any acquisitions, joint ventures
or other business combinations or investments;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | the introduction of alternative technologies; and
| | - | -------------------------------------------------



| | • | technical difficulties or system failures affecting the telecommunication infrastructure in India,
the Internet generally or the operation of our websites.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------



12









We
plan to continue to expand and invest in our network infrastructure. Many of our expenses are relatively fixed in the short-term. We
cannot assure you that our revenues will increase in proportion to the increase in our expenses. We may be unable to adjust spending
quickly enough to offset any unexpected revenues shortfall. This could lead to a shortfall in revenues in relation to our expenses
and adversely affect our revenue and operating results.



You
should not rely on yearly comparisons of our results of operations as indicators of future performance and operating results may
be below the expectations of public market analysts and investors. In this event, the price of our ADSs may decline.



Our business may not be compatible
with delivery methods of Bandwidth / Connectivity developed in the future.



We
face the risk that fundamental changes may occur in the delivery of connectivity services in India. The internet market has seen
significant changes in the recent past from connecting fixed offices/locations to connecting mobile devices to connecting disparate
automated devices and to continue to be relevant in this dynamic and disruptive environment, we will have to develop new technology
or modify our existing technology to accommodate these developments. Our pursuit of these technological advances, whether directly
through internal development or by third-party license, may require substantial time and money. We may be unable to adapt our connectivity
service business to alternate delivery means and new technologies may not be available to us at all. We provide wireless connectivity
on the 5.7 GHz spectrum allotted to us by the Wireless Planning Commission. This spectrum has been de-licensed during the current
fiscal year. Hence, we do not own any licensed spectrum to offer our services. We are exploring suitable spectrum that is technically
feasible to offer our services. We may not get the licensed spectrum. The spectrum allocation may be inconsistent with industry
standards. The current capacity may be insufficient to offer a breadth of services. The Government may issue instructions to release
the spectrum that we hold. High cost of spectrum acquisition may be inconsistent with our revenue and cost models. We may not keep
up with the pace of change that takes place in wireless technologies.



Disruption to our Networks and Data
Center infrastructure may cause us to lose customers and/or incur additional expenses.



Some of the risks to
our infrastructure include physical damage, security breaches, capacity limitations, power surges or outages, software incompatibility
and/or other disruptions beyond our control, such as natural disasters and acts of terrorism. From time to time in the course of
our operations, we experience disruptions in our service due to factors such as cable damage, theft of our equipment, inclement
weather and service failures of our third-party service providers. Disruptions may cause interruptions in service or reduced capacity
for customers, either of which could cause us to lose customers, or increase our operating expense, both of which could adversely
affect our business, revenues and cash flows.



The success
of our business depends on wider reach of network in India, which may be slowed or halted by technical obstacles in India.



Wider
reach of network and availability of increased bandwidth in India, which is the measure of Network penetration, has been relatively
low and slow compared to many developing and developed countries in the world. Though in recent years, the coverage of tier III/tier
IV cities has increased, there may be many technical obstacles to accessing certain regions which may increase the cost of building
the network and thereby cause a slowdown or halt the consumption of network services, which will adversely affect our operations.



We may be
compelled to surrender or pay additional for the spectrum that was allotted to us earlier.



The
Government of India has asked us to surrender certain range of spectrum allotted to us and the same was auctioned as BWA spectrum. The
Government also has asked the company to make payment for certain spectrum from the date of allotment or to surrender the same.
The other range of spectrum that we have been operating, 5.7 GHz, is also close to capacity utilization and will need to be augmented
in the near future. Enterprise connectivity will need licensed bands of spectrum for assured quality and security, so the
non-availability of spectrum would materially adversely affect our business and results of operations. In the event of the
surrender of the spectrum certain frequencies, it may hamper our future plans for expansion of services, and there are no assurances
that we will be able to obtain additional replacement spectrum.



13







We might
not be able to grow Network Connectivity services due to a declining contribution.



In
the Network Connectivity business, realization could be lower year on year based on the market conditions. Every year when
annual contracts come up for renewal, customers sign up for more bandwidth or more links at a lower unit price. This is offset
somewhat by lower bandwidth costs, which we renegotiate with our service providers. This impacts us in two ways: first, despite
an increase in sales volume, we may not see a commensurate rise in revenues; and secondly, margins in our business are continually
shrinking.  Therefore, our revenue from our connectivity business may stagnate with declining bandwidth prices.



We may not
be able to retain and acquire customers for our Data Centers.



In
the field of Data Center services, competition from Data Center operators may attract customers away from us or make it more difficult
for us to attract new customers. If competitors are more successful than us in the market, it could be difficult for us to retain
and/or acquire customers. Furthermore, once customers cease using our services and choose another service provider, it may require
substantial efforts in terms of cost and time to re-acquire such customers, and despite spending on such customer acquisition or
retention, we may be unsuccessful in retaining such customers.



In
order to improve our competitiveness, we continue to expand our Data Center infrastructure. If we are unable to attract adequate
customers, we will not be able to achieve the revenues initially anticipated, which could have an adverse effect on our future
results of operations and financial condition.



Our Data
Centers may not be competitive enough in terms of green features.



We
may fail to convert our existing Data Centers and/or build new Data Centers under the LEED (Leadership in Energy and Environmental
Design) Commercial Interior (CI) program of United States Green Building Council (USGBC). LEED certification is an internationally
recognized program and is considered one of the highest standards for energy efficient constructions. The Data Center uses several
green features such as site ecology, water conservation, smart energy meters and equipment, reduction of CO2 emissions, high recycle
content, effective waste management and eco-friendly interiors. Increased demand for green Data Center may hamper the marketing
of our existing Data Centers that are not LEED certified.



Reduction in power supply and non-availability
of fuel may affect our Data Centers.



There has been acute power shortage in the past in India and
hence, there could be a reduction in the availability of electricity. Where there is non-availability of power supply in Data Centers,
we resort to alternate sources of power (fuel) and the running of the Data Centers mainly depend on the availability of fuel, which
will increase the cost of operations. Additionally, non-availability of power/fuel will disrupt our operations and it would be
difficult for our customers to access data during such times.



We may lose
relevance and revenues if we do not position our business models in line with current and future technology trends.



Technology
trends, such as cloud computing, IoT, SD-WAN and software-as-a-service, allow new business models that could replace current lines
of business. The markets for our services are characterized by rapidly changing technology, evolving industry standards, emerging
competition and frequent introduction of new services. We may not successfully identify new opportunities, develop and bring
new services to market in a timely manner. Unless we are able to adopt and deploy these advancements, we may lose our competitive
position in the marketplace, which would adversely affect our revenues and may lead to increased customer attrition, as our customers
switch to other providers.



We face risks associated with having
a long selling and implementation cycle for our services that requires us to make significant capital expenditures and resource
commitments prior to recognizing revenue for those services.



Data Center service
typically requires significant investment of capital, human resources and time by both our customers and us. Constructing and commissioning
of a Data Center requires significant capital expenditures. A customer’s decision to utilize our colocation services, our
managed services or our other services typically involves time-consuming contract negotiations regarding the service level commitments
and other terms, and substantial due diligence on the part of the customer regarding the adequacy of our infrastructure and attractiveness
of our resources and services. Our efforts in pursuing a particular sale or customer may not be successful. If our efforts in pursuing
sales and customers are unsuccessful, our financial condition could be negatively affected.



14







The Data Center business is capital-intensive,
and our expectation for our capacity to generate capital in the short term may be insufficient to meet our anticipated capital
requirements.



The costs of constructing, developing and
operating Data Centers are substantial. Further, we may encounter development delays, excess development costs, or delays in developing
space for our customers to utilize. We also may not be able to identify suitable land or facilities for new Data Centers or at
a cost on terms acceptable to us. We are required to fund the costs of constructing, developing and operating our Data Centers
with cash retained from operations, as well as from financings from bank and other borrowings. Moreover, the costs of constructing,
developing and operating Data Centers have increased in recent years, and may further increase in the future, which may make it
more difficult for us to expand our business and to operate our Data Centers profitably. If we cannot generate sufficient capital
to meet our anticipated capital requirements, our financial condition, business expansion and future prospects could be materially
affected.



Our customer base may decline if
our customers or potential customers develop Data Centers or expand their own existing Data Centers.



Some of our customers
may develop their own Data Center facilities. Other customers with their own existing Data Centers may choose to expand their Data
Center operations in the future. In the event that any of our key customers were to develop or expand their Data Centers, we may
lose business or face pressure as to the pricing of our services. In addition, if we fail to offer services that are cost-competitive
and operationally advantageous as compared with services provided in-house by our customers, we may lose customers or fail to attract
new customers. If we lose a customer, there is no assurance that we would be able to replace that customer at the same or a higher
rate, or at all, and our business and results of operations would suffer.



Our Data Center infrastructure may
become obsolete or unmarketable and we may not be able to upgrade our power, cooling, security or connectivity systems cost-effectively
or at all.



The markets for the
Data Centers we own and operate are characterized by rapidly changing technology, evolving industry standards, frequent new service
introductions, shifting distribution channels and changing customer demands. As a result, the infrastructure at our Data Centers
may become obsolete or unmarketable due to demand for new processes and/or technologies, including, without limitation: (i) new
processes to deliver power to, or eliminate heat from, computer systems; (ii) customer demand for additional redundancy capacity;
(iii) new technology that permits higher levels of critical load and heat removal than our Data Centers are currently designed
to provide; and (iv) an inability of the power supply to support new, updated or upgraded technology. In addition, the systems
that connect our Data Centers to the Internet and other external networks may become outdated, including with respect to latency,
reliability and diversity of connectivity. When customers demand new processes or technologies, we may not be able to upgrade our
Data Centers on a cost-effective basis, or at all, due to, among other things, increased expenses to us that cannot be passed on
to customers or insufficient revenue to fund the necessary capital expenditures. The obsolescence of our power and cooling systems
and/or our inability to upgrade our Data Centers, including associated connectivity, could reduce revenue at our Data Centers and
could have a material adverse effect on us.



Procuring power at lower costs for
Data Centers by the competitors may put us at a disadvantage in terms of pricing for our Data Center operations.



The single largest
operating cost in Data Centers is power. Currently all Data Centers are located in proximity to, or at the edge of major urban
centers such as Mumbai, Chennai, Bengaluru and Noida. Inexpensive land and labor allow companies to locate new Data Centers in
remote locations. We may neither be in a position to develop Data Centers at remote locations where power is cheap nor procure
power at cheaper rates for our Data Centers. If our competitors procure power at lower cost, they may have an advantage over us
with respect to pricing. Our inability to offer competitive pricing may result in loss of customers and will impact our business
and result of operations. The alternate sources of power are also exposed to inflation, regulation and hence, any undue price increase
would affect our energy cost significantly.



If we are not successful in expanding
our service offerings, we may not achieve our financial goals and our results of operations may be adversely affected.



We have plans to expand
the nature and scope of our service offerings, particularly into the area of cloud and managed services, including direct private
connection to major cloud platforms and the provision of cloud infrastructure. The success of our expanded service offerings depends,
in part, upon demand for such services by new and existing customers and our ability to meet their demand in a cost-effective manner.
We may face a number of challenges expanding our service offerings, including:



15







| | o | acquiring or developing the necessary expertise in IT;
| | - | ------------------------------------------------------

| | o | maintaining high-quality control and process execution standards;
| | - | -----------------------------------------------------------------

| | o | maintaining productivity levels and implementing necessary process improvements;
| | - | --------------------------------------------------------------------------------

| | o | controlling costs; and
| | - | ----------------------

| | o | successfully attracting existing and new customers for new services we develop.
| | - | -------------------------------------------------------------------------------



A failure by us to
effectively manage the growth of our service portfolio could damage our reputation, cause us to lose business and adversely affect
our results of operations. In addition, cloud and managed services may require significant upfront investment and continued expansion
into these services may impact our profit margins. In the event that we are unable to successfully grow our service portfolio,
we could lose our competitive edge in providing our existing cloud and managed services.



We may be vulnerable to security
breaches which could disrupt our operations and have a material adverse effect on our financial condition and results of operations.



As we provide assurances
to our customers that we provide the highest level of security, any breach on such security could be harmful to our brand and reputation.
We may be required to expend significant capital and resources to protect against such threats or to alleviate problems caused
by breaches in security. In addition, as we continue expanding our service offerings in managed cloud services, including direct
private connection to major cloud platforms and the provision of cloud infrastructure, we will face greater risks from potential
attacks because the provision of cloud-related services will increase the flow of Internet user data through the Data Center facilities
we operate and create broader public access to our system. As techniques used to breach security change frequently and are often
not recognized until launched against a target, we may not be able to implement new security measures in a timely manner or, if
and when implemented, we may not be certain whether these measures could be circumvented. Any breaches that may occur could expose
us to increased risk of lawsuits, regulatory penalties, loss of existing or potential customers, harm to our reputation and increases
in our security costs, which could have a material adverse effect on our financial condition and results of operations.



In addition, any assertions
of alleged security breaches or systems failure made against us, whether true or not, could harm our reputation, cause us to incur
substantial legal fees and have a material adverse effect on our business, reputation, financial condition and results of operations.



We may encounter litigation and penalties
due to breach of system and security controls by associates or sub-contractors in the online assessment services



We provide online assessment
services to the Government, Public & Private sector undertakings. We provide these services through our online assessment tool.
This tool engages employees and sub-contractors for student registration, exam center allocation, hall ticket issuance, question
paper content creation, logistics planning, exam-day management, and results management.  We cannot assure you that there
may not be any breach of the system and security controls including any malpractices by candidates or sub-contractors or any person
engaged with the conduct of the examination, which may expose us to criminal or civil enforcement actions in addition to penalties
and suspension or disqualifications.



Despite our endeavor
to maintain the robust system the examinations, an incident occurred in the month of February 2018 where Sify observed a technical
glitch in the question paper. We decided to cancel the question paper and reexamination was successfully conducted immediately.
A few answer keys appeared in the social media posted by an unknown person. Pursuant to the protests carried out by certain sections
of students in Delhi, the government tasked the country’s investigating agency with probing the matter. On May 23, 2018,
Central Bureau of Investigation (CBI) conducted inquiry at 12 locations including 4 premises of Sify Technologies Limited. Sify
extended its full support by submitting the reports, statements, process documents to CBI during the preliminary enquiry.



The authorities during
the inquiry collected data pertaining to the examination conducted between February 17 to 22, 2018, in a FIR (First Information
Report) filed subsequently, the authorities have suspected 7 candidates (appeared for exam) cheating at different exam centers.
The authorities have also named 9 personnel of a private third-party agency engaged by Sify for the exam. Further, the authorities
have also named one employee of Sify in his capacity as custodian of the question paper in his individual capacity.



In a Public Interest
Litigation filed before Supreme Court, pending CBI enquiry, a seven-member committee was constituted to look into the allegations
and submit its report.



16







Although Sify Technologies
was not party to the proceedings, we have extended full support and cooperation to the authorities in the investigation.



We cannot assure you
that similar instances will not occur in future and any such instances may impact our reputation and cause adverse effect on our
business or results of operations.



We engage third-party contractors
to carry out various services.



We endeavor to engage
third-party contractors with proven track records, reliability and adequate financial resources. However, any such third-party
contractor may still fail to provide satisfactory services at the level of quality required by us. Such failure could harm our
reputation and have a material adverse effect on our business, reputation, financial condition and results of operations.



We may fail
to augment our skills and capability to best manage our services over Internet Protocol and data networks.



We
have been able to build a reputation and maintain our lead because of our expertise and capability with the delivery and management
of services over Internet Protocol and data networks. With the build-up of the capability and experience of our competitors, we
are at the risk of losing market share, if we do not augment our skills and capabilities to keep our qualitative lead over them.
Infrastructure such as networks is considered by customers as a commodity, and the only differential that we offer is our ability
to manage and monitor services in a superior manner.



It may not
be possible for us to retain our brand equity if we do not resort to huge investments for brand development.



Our competitors offering similar services are all large telecom
companies who make substantial investments in building their brand image across their services. Conversely, we are focused on IT
infrastructure services over data networks and we believe that we enjoy the reputation of a specialist in these services. However,
if we do not build up awareness as well as our brand and reputation over time, the sheer weight of investments in brand development
by the larger telecommunication providers will dilute our brand recognitions and competitive advantages.



Any loss of business from our top
clients could reduce our revenue and significantly impact our business.



In fiscal 2020, none
of the customers accounted for revenue more than 10%. The services we offer for specific clients are likely to vary from year to
year. Thus, a major client in one year may not provide the same level of revenues in a subsequent year. A number of factors other
than our performance could cause the loss of or reduction in business or revenue from a client, and these factors are not predictable.
For example, a client may demand price reductions, change its outsourcing strategy or move work in-house. If we lose
one of our major clients or if one of our major clients significantly reduces its volume of business with us, our revenues and
profitability could be reduced.



If we are unable to meet our service
level commitments, our reputation and results of operation could suffer.



Most of our customer
contracts provide that we maintain certain service level commitments to our customers. If we fail to meet our service level commitments,
we may be contractually obligated to pay the affected customer a financial penalty, which varies by contract, and the customer
may in some cases be able to terminate its contract. In addition, if such a failure were to occur, there can be no assurance that
our customers will not seek other legal remedies that may be available to them, including:



| | · | requiring us to provide free services;
| | - | --------------------------------------

| | · | seeking damages for losses incurred; and
| | - | ----------------------------------------

| | · | cancelling or electing not to renew their contracts.
| | - | ----------------------------------------------------



Any of these events
could materially increase our expenses or reduce our net revenue, which would have a material adverse effect on our reputation
and results of operations. Our failure to meet our commitments could also result in substantial customer dissatisfaction or loss.
As a result of such customer loss and other potential liabilities, our net revenue and results of operations could be materially
and adversely affected.



17







We may not
meet the selection criteria set for high value contracts by the Government.



As
we participate in bidding for large Government of India contracts, as well as business from large corporations, we increasingly
come under scrutiny for financial indicators. Unless we leverage our capacity and become consistently profitable, we could be excluded
from major government projects because we fail to meet their selection criteria, which would adversely affect our business and
results of operations.



The success
of our business depends on our capability to develop compatible applications and tools.



As
we offer our Applications Integration services to an increasing base of large corporations, we run the risk of not being able to
meet their needs for scaling and sophistication in the future if we do not build the capacity to develop and integrate applications
software to meet with future needs. We may not have adequate resources to develop our capability as a result of emerging sophistication
required for such services. The failure to develop such resources may adversely affect our business and results of operations.



We may fail
to offer end-to-end managed services to sustain our position.



The
telecommunications market is evolving towards service providers who offer end-to-end managed services that include managing everything
down to desktops. If we are to continue to lead the market, we need to extend our bouquet of services to ensure that our portfolio
grows to include managed services where we can maintain leadership. It may be difficult for us to offer end-to-end managed services
to sustain our leadership in managed services without significant capital expenditures which would adversely affect our cash position
and results of operations.



We may be unable to replace lost
revenue due to customer cancellations, renewals at lower rates or other less favorable terms



It
is key to our profitability that we offset committed recurring revenue due to customer cancellations, terminations, price reductions
or other less favorable terms by adding new customers, selling more high-margin services, features and functionalities to existing
customers and increasing traffic usage by all customers. Some customers may elect not to renew and others may renew at lower prices,
lower committed traffic levels, or contract only for shorter time frame. Historically, a significant percentage of our renewals,
particularly with larger customers, have led to declines in unit price as competition has increased and the market for certain
parts of our business has saturated. Our renewal rates may decline as a result of a number of factors, including competitive pressures,
customer dissatisfaction with our services, customers' inability to continue their operations and spending levels, the impact of
multi-vendor policies, customers implementing or increasing their use of in-house technology solutions and general economic conditions.



In
addition, as we expand the network to small cities and towns (semi – urban and rural locations), there is an operational
cost involved in both the establishment and operation of these nodes. While the expansion is facilitated by a corporate order,
we have to subsequently get additional business for capacity utilization in these nodes to make them profitable. If we are not
able to do this rapidly by scaling up the business through these towns, we run the risk of overcapacity on the network in new areas,
which results in a higher cost structure and lower margins.



Absence
of policy support will hamper Internet and Data Services.



We
have and continue to be subject to Indian regulations regarding the VPN license requirements, including the percentage of foreign
holdings to offer VPN services as well the need for NLD/ILD licenses to offer VPN services and carrier voice services. The growth
and development of the data and Internet sector is dependent on the policy support of Department of Telecommunications. Regulatory
changes, as well as the continuing lack of policy initiatives to revitalize the data and Internet sector continue to be a risk.



We cannot influence
policies that facilitate the growth and development of data and Internet connectivity in India. The absence of policy support for
Internet and data services may hamper the growth of such services in the future, which would adversely affect our business and
results of operations.



Constant
improvement of technology standards/ skills and evolving tools and applications are essential to sustain our position in remote
management of IT infrastructure.



We
are relatively unknown outside India in comparison to other established IT players who have a large base of customers. If we are
not able to constantly upgrade our technology standards and skills, and if we are unable to scale for critical mass in the near
term, our competitive position would be adversely affected.



18







Management of IT infrastructure
is dependent on sophisticated tools and applications to remotely monitor the IT infrastructure and assets of customers. If
we are unable to retain our competitive advantages in terms of the evolving tools & applications, or the maturity of our processes,
we may lose customers and be at a competitive disadvantage compared with our larger competitors



Emergence
of Enterprise Software Suites, Artificial Intelligence, Robotics and Machine Learning may hamper the growth of our e-Learning stream.



The
emergence of competitors such as Oracle, IBM, SAP, SumTotal and SABA offering Enterprise Software Suites for eLearning for large
organizations to develop their own learning platforms could be a threat to our business in the future. We may lose our business
to our competitors, and if we are unable to acquire new customers or retain our existing customers, our revenues and results of
operations may suffer. Additionally, the emergence of Machine Learning and Artificial Intelligence could adversely impact our revenues.



If we do
not continue to develop and scale compelling content, products and services, our ability to attract new customers or maintain the
engagement of our existing consumers could be adversely affected.



In
order to increase advertising revenues, we need to continue to increase the number of users of our sports, recipes and entertainment
video content through our websites. In order to attract consumers and generate increased engagement on our website portals,
we believe we must offer compelling content, products and services. If we are not able to attract and keep new users in a constantly
evolving user base, we are likely to lose page views, and advertisers may reduce or cease publishing advertisements in our websites.  It
is important for us to provide necessary content through our websites (e.g. live videos, new channel-based portals, etc.) to attract
more users.  However, acquiring, developing and offering new content, products and services, as well as new functionality,
features and enhanced performance of our existing content, products and services, may require significant costs and time to develop.
In addition, consumer tastes are difficult to predict and subject to rapid change.



Cyber security
threats could damage our reputation or result in liability to us.



Our
businesses depend on the reliability and security of our information technology systems and infrastructure. They must remain secure
and be perceived by our corporate and consumer customers to be secure, as we retain confidential customer information in our database.
Despite the implementation of security measures, our infrastructure may be vulnerable to physical break-ins, computer hacking,
computer viruses, other malware, ransomware or cyber-attacks beyond our control. If our security measures are circumvented, it
would jeopardize the security of confidential information stored on our systems, proprietary information could be misappropriated
or cause interruptions to our operations. We may be required to make significant additional investments and efforts to protect
against or remedy security breaches. Unauthorized disclosure of sensitive or confidential client and customer data, whether through
breach of our computer systems, systems failure or otherwise, could damage our reputation and adversely affect our business and
results of operations



Though
we have not had any attempted cybersecurity breaches reported, the security services that we offer in connection with our business
customers’ networks cannot assure complete protection from computer viruses, break-ins and other disruptive problems and
the occurrence of these problems could result in claims against us or liability on our part. These claims, regardless of their
ultimate outcome, could result in costly litigation and could damage our reputation and hinder our ability to attract and retain
customers for our service offerings.



We face
a competitive labor market for skilled personnel and therefore are highly dependent on our existing key personnel and on our ability
to hire additional skilled employees.



Our
success depends upon the continued service of our key personnel including our senior management team, including our CEO, Chairman
and Managing Director, Mr. Raju Vegesna. Each of our employees may voluntarily terminate his or her employment with us. Our success
also depends on our ability to attract and retain such highly qualified technical, marketing and sales personnel. The labor market
for skilled employees in India is extremely competitive, and the process of hiring employees with the necessary skills is time
consuming and requires significant resources. We may not be able to retain or integrate existing personnel or identify and hire
additional personnel in the future. The loss of the services of key personnel or the inability to attract additional qualified
personnel could disrupt the implementation of our business strategy, upon which the success of our business depends.



19







The failure
to keep our technical knowledge confidential could erode our competitive advantage.



Our
technical know-how is not protected by intellectual property rights such as patents and is principally protected by maintaining
its confidentiality. We rely on trade secrets, confidentiality agreements and other contractual arrangements. As a result, we cannot
be certain that our know-how will remain confidential in the long run. Employment contracts with certain of our employees who have
special technical knowledge about our products or our business contain a general obligation to keep all such knowledge confidential.
In addition to the confidentiality provisions, these employment agreements typically contain non-competition clauses.



If
either the confidentiality provisions or the non-competition clauses are unenforceable, we may not be able to maintain the confidentiality
of our know-how. In the event that confidential technical information or know-how about our products or business becomes available
to third parties or to the public, our competitive advantage over other companies in the wireless based IP/VPN industry could be
harmed which could have an adverse material effect on our current business, future prospects, financial condition and results of
operations.



Our inter-city
network is leased from other service providers and is dependent on their quality and availability.



We
have provided inter-city connectivity for our Enterprise customers through lease arrangements rather than through capital investment
in assets, our ability to offer high quality telecommunication services depends, to a large extent, on the quality of the networks
maintained by other operators, and their continued availability, neither of which is under our control. However, the abundance
of inter-city connectivity provides us with the ability of switching to Telco’s offering better services. Although we
always use more than one service provider where required, there can be no assurance that this dependence on external parties would
not affect our network availability. Any prolonged loss of network availability could adversely affect our business and results
of operations.



Our current
infrastructure may not accommodate increased use while maintaining acceptable overall performance.



Currently,
only a relatively limited number of customers use our corporate network. We must continue to add to our network infrastructure
to accommodate additional users, increasing transaction volumes and changing customer requirements. We may not be able to project
accurately the rate or timing of increases, if any, in the use of our websites or upgrade our systems and infrastructure to accommodate
such increases. Our systems may not accommodate increased use while maintaining acceptable overall performance. Service lapses
could cause our users to use the online services of our competitors, and numerous customer defections may adversely affect our
results of operations.



Our increasing
work with Governmental agencies may expose us to additional risks.



We
are increasingly bidding to work with Governments and Governmental agencies. Projects involving Governments or Governmental agencies
carry various risks inherent in the Government contracting process, including the following:



| | · | Such projects may be subject to a higher risk of reduction in scope or termination than other contracts
due to political and economic factors such as changes in Government, pending elections or the reduction in, or absence of, adequate
funding;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Terms and conditions of Government contracts tend to be more onerous than other contracts and may
include, among other things, extensive rights of audit, more punitive service level penalties and other restrictive covenants.
Also, the terms of such contracts are often subject to change due to political and economic factors;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | All Government bids are subject to Bank Guarantee depending upon the size of the tender. Any shortfall
in service, inability to deliver committed SLA during the project may force the Government to invoke the bank guarantee leading
to huge cash losses;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Government contracts are often subject to more extensive scrutiny and publicity than other contracts.
Any negative publicity related to such contracts, regardless of the accuracy of such publicity, may adversely affect our business
or reputation;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Participation in Government contracts could subject us to stricter regulatory requirements, which
may increase our cost of compliance; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | · | Such projects may involve multiple parties in the delivery of services and require greater project
management efforts on our part. Any failure in this regard may adversely impact our performance.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20







| | · | In addition, we operate within jurisdictions in which local business practices may be inconsistent
with international regulatory requirements, including anti-corruption and anti-bribery regulations prescribed under the U.S. Foreign
Corrupt Practices Act (“FCPA”), which, among other things, prohibits giving or offering to give anything of value with
the intent to influence the awarding of Government contracts. Also, Prevention of Corruption (Amendment) Bill 2013, (“PCA”)
prohibits giving bribe to a public servant. Although we believe that we have adequate policies and enforcement mechanisms to ensure
legal and regulatory compliance with the FCPA, PCA and other similar regulations, it is possible that some of our employees, subcontractors,
agents or partners may violate any such legal and regulatory requirements, which may expose us to criminal or civil enforcement
actions, including penalties. If we fail to comply with legal and regulatory requirements, our business and reputation may be harmed.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Any of
the above factors could have a material and adverse effect on our business or our results of operations.



Our dividend payment policy is contingent
upon the Company’s profits each year.



The dividend payment
policy of the Company is not certain and is contingent upon the level of performance of the Company and the recommendation of the
Board of Directors and the approval of the shareholders. Thus, there is no assurance that dividends will be paid in the future.



Prior to 2013-14 we
did not pay dividends due to the losses incurred in the previous years and non-availability of divisible profits under Indian law.
In view of the consistent positive performance of the Company, we paid dividends till the previous fiscal year of 2018-19. For
the current year, considering the looming uncertainty over the economic conditions in the light of COVID-19, the Board of Directors
have recommended that no dividend be paid and have advised to conserve capital for financing expansion.



Risks Related to Regulation and Compliance



We may encounter legal confrontations
as the Information Technology Act 2000 lacks specificity as to issues on online processes and/or Internet.



We
believe that the Information Technology Act of 2000, as amended in 2011 (the “ITA”), an Indian regulation, does not
address all areas of online processes or the Internet. In exercise of the powers conferred by the ITA, the Government of India
issued rules in April 2011 called Information Technology rules with stringent privacy norms for Internet Service Providers and
the intermediary who is handling sensitive personal information. The ITA has mandated the service providers to maintain transactions,
receipts and vouchers in specific formats. The records must be produced for inspection and audit by a government nominated agency
or person. The Government of India is authorized to audit security and privacy protection measures. We are exposed to risks
relating to unauthorized access and non-compliance of regulations by our business partners. Such events may negatively affect
our reputation, and violations of the Information Act may result in fines and litigation or cause us to incur legal costs, which
may adversely affect our business and results of operations.



We may encounter legal confrontations
under the Information Technology Act 2000 on our digital certification business.



We have been granted
license as Certifying Authority (CAs) to issue digital signature certificate for electronic authentication of users. The CAs are
governed by Controller of Certifying Authority (CCA) under the ITA which prescribes duties to be followed, standards to be maintained
and a list of documents to be maintained by Certifying Authorities. The guidelines also require the company to bill the end customer
to whom the Digital Signature Certificate (DSC) is sold effective from 1st of August 2017. System development changes have been
made by the company to support the billing to the end customers. Any actual or perceived failure to comply with such obligations
could harm our business. Non-Compliance with such laws, rules and regulations may result in fines and litigation or cause us to
incur legal costs, which may adversely affect our business and results of operations.



21







We may encounter
litigation and penalties due to non-compliance with relevant laws applicable to the products sold and services rendered by us.



The
products and services that we deal with are subject to various laws such as the ITA. We are exposed to risks relating to non-compliance
with such laws which may affect our reputation and also result in litigations and penalties which may adversely affect our business
and results of operations.



We may not
be able to comply with direct & indirect tax laws resulting in litigations and penalties.



Tightening
of regulatory framework, new legislative changes and heightened enforcement activity by the tax departments across the world has
brought the importance of tax risk on the radar of the corporates in India. From a business standpoint, income tax remains the
most important tax for companies because of its impact on corporate bottom-line. Unpredictable rulings & interpretations of
tax authorities are the key reasons leading to tax risks. In India, changes in taxation laws are announced on an annual basis in
February, when the Union Budget is presented. These changes in law may affect the accuracy of our estimated tax obligations, or
the obligations of holders of our equity shares and ADSs. Significant judgment is required in determining our worldwide provision
for income taxes and other tax liabilities. We are regularly under audit by tax authorities and those authorities may not agree
with positions taken by us on our tax returns. Although we believe that our estimates are reasonable, there is no assurance that
the final determination of tax audits or tax disputes will not be different from what is reflected in our historical income tax
provisions and accruals. We are also exposed to risks of non-compliance with the requirement of law which may affect our reputation
and also result in litigations and penalties which may adversely affect our business and results of operations.



Any
of the above could have a material adverse effect on our business and future results. Additionally, due to the complexity of the
fiscal environment, the ultimate resolution of any tax matters may result in payments greater or lesser than amounts accrued.



The
Government of India, through Finance Act, 2020, has withdrawn Dividend Distribution Tax wherein the dividends are now taxable in
the hands of the shareholders. These dividends when declared by an Indian company is subject to withholding tax provisions, where
tax would be deducted at source by the company and paid to the Government, which shall be available as tax credit for the shareholders.
This could impact the net cash earnings of the shareholders. The Government of India could change the incident of taxation, the
rate of withholding tax, the availability of tax credit for shareholders in the future, which will have direct impact on the earnings
of the shareholders.



Government
of India rolled out Goods and Service Tax (GST) effective from 1st July 2017. GST has subsumed several central, state and local
tax laws such as excise duty, service tax, value added tax, central sales tax, entry tax, etc. The GST law prescribes compliance
and procedures which are more comprehensive than prior tax laws. The GST Council has proposed a new process which allows credit
to the company based on the invoices uploaded by the vendors in their tax returns. Hence, tax credits will be available to the
company based on proper compliance by all the vendors and filing of returns on time. Any failure to comply with the requirement
of law by the vendor may impact availment of input tax credit by the company. We are also exposed to risks of non-compliance with
the requirement of law which may affect our reputation and also result in litigations and penalties which may adversely affect
our business and results of operations.



The legal
system in India does not protect intellectual property rights to the same extent as the legal system of the United States, and
we may be unsuccessful in protecting our intellectual property rights.



Our
intellectual property rights are important to our business. We rely on a combination of copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect our intellectual property.



Our
efforts to protect our intellectual property may not be adequate. We hold no patents, and our competitors may independently develop
similar technology or duplicate our services. Unauthorized parties may infringe upon or misappropriate our services or proprietary
information. In addition, the laws of India do not protect proprietary rights to the same extent as laws in the United States,
and the global nature of the Internet makes it difficult to control the ultimate destination of our services. For example, the
legal processes to protect service marks in India are not as effective as those in place in the United States. The misappropriation
or duplication of our intellectual property could disrupt our ongoing business, distract our management and employees, reduce our
revenues and increase our expenses. In the future, litigation may be necessary to enforce our intellectual property rights or to
determine the validity and scope of the proprietary rights of others. Any such litigation could be time-consuming and costly.



We
could be subject to intellectual property infringement claims as the number of our competitors grows and the content and functionality
of our websites or other service offerings overlap with competitive offerings. Our defenses against these claims, even if not meritorious,
could be expensive and divert management’s attention from operating our Company. If we become liable to third parties for
infringing their intellectual property rights, we could be required to pay a substantial award as damage and forced to develop
non-infringing technology, obtain a license or cease selling the applications that contain the infringing technology. We may be
unable to develop non-infringing technology or even obtain a license on commercially reasonable terms.



22







Compliance
with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases
our costs of compliance.



Changing
laws, regulations and standards relating to accounting, corporate governance and public disclosure, including the Dodd–Frank
Wall Street Reform and Consumer Protection Act (“Dodd-Frank”),Sarbanes-Oxley Act of 2002 (“SOX”),
new SEC regulations and NASDAQ Stock Market rules, are creating uncertainty for companies like ours. These new or changed
laws, regulations and standards may lack specificity and are subject to varying interpretations. Their application in practice
may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards.



Indian
regulatory authorities are increasingly focused on standards of accounting, auditing, public disclosure and corporate governance
and may impose new regulations that can lead to increased general and administrative expenses and a diversion of management time
and attention from revenue-generating activities to compliance activities.



In
addition, it may become more expensive and/or more difficult for us to obtain director and officer liability insurance due to increases
in premium rates. Further, our Board members, CEO, Chairman and Managing Director and our Chief Financial Officer could face an
increased risk of personal liability in connection with their performance of duties and our SEC reporting obligations. As
a result, we may face difficulties attracting and retaining qualified Board members and executive officers, which could harm our
business. If we fail to comply with new or changed laws or regulations, our business and reputation may be harmed.



The Indian Companies
Act, 2013, which replaced the Companies Act, 1956, effective April 1, 2014, has imposed numerous and onerous compliance requirements
on the Corporates in India. The Act introduced significant provisions relating to governance, e-management, compliance and enforcement,
enhanced disclosure norms, accountability of management, stricter enforcement, investor protection, class action suits, corporate
social responsibility, compulsory appointment of Independent and Woman Directors, rotation of Auditors etc. among others. Compliance
with the provisions of the new Act may pose a greater challenge to the Corporates in India both in terms of responsibility and
cost.



We may inadvertently
fail to comply with local laws of other countries in connection with the negotiation and execution of operational agreements.



As
part of our international business, we may negotiate with and enter into contracts with strategic partners, clients, suppliers,
employees and other third parties in various countries. We may inadvertently fail to comply with their laws, which may result
in lawsuits or penalties and could adversely affect our business or results of operations.



We are subject to quality of service
(QOS) guidelines issued by the Telecom Regulatory Authority of India (“TRAI”). Failure to comply with one or more applicable
guidelines may expose us to fines/penalties.



TRAI has issued the following guidelines
to the ISPs for improving the quality of service:



| | · | All Internet service providers shall provide adequate information to subscribers regarding Internet/broadband
services being offered and marketed by them.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | All Internet service providers shall provide information regarding contention ratios or the number
of users competing for the same bandwidth, adopted by them to provide Internet/broadband service in their tariff plans submitted
to TRAI, manual of practice, call centers and on their websites
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | All Internet service providers shall publish quarterly contention ratio for different Internet/broadband
services on their website to facilitate subscribers to take informed decision.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | All Internet service providers must use the contention ratios better than specified ratios for
different services to ensure sufficient bandwidth for providing good quality of service to their subscribers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







23







Fixing
up a contention ratio may put standalone ISPs at a disadvantage as cost of delivery of Internet bandwidth may increase. Telecom
companies offering similar internet services are tempted to offer significantly lower prices and incentives as they own the last
mile. Also, by bundling telephony along with Internet, they can enhance their otherwise idle last mile. Under such circumstances,
it will be very difficult for ISPs providing retail service to compete with big Telco’s which can offer broadband services
by cross subsidizing with voice/other services.



| | · | Submission of Carbon foot print report from the financial year 2011-12 and also to submit a carbon
foot print report twice a year from the financial year 2013-14, for the six months ending September 30, before 15th
of November and for the six months ending March 31, by 15th of May each year.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In the event of our
failure to comply with one or more of the above guidelines, we may expose ourselves to fines/penalties.



We may be liable to third parties
for information retrieved from the Internet.



We could become liable
if confidential information is disclosed inappropriately on or through our websites. Others could also sue us for the content and
services that are accessible from our websites through links to other websites or through content and materials that may be posted
by our users in chat rooms or bulletin boards. The laws in India relating to the liability of companies which provide Internet
services, like ours, for activities of their users, are still relatively unclear. Investigating and defending these claims is expensive,
even if they do not result in liability Allegations of impropriety, even if unfounded, could damage our reputation, disrupt
our ongoing business, distract our management and employees, reduce our revenues and increase our expenses.



Risks Related to the ADSs and Our Trading
Market



We may fail to meet the continued listing
requirements of the NASDAQ, which could cause our ADS to be delisted.



Pursuant to the listing
requirements of the NASDAQ, if a company’s share price is below $1.00 per share for 30 consecutive trading days, NASDAQ will
notify the company that it is no longer in compliance with the NASDAQ continued listing qualifications.  If a company is not
in compliance with the minimum bid price rule, the company will have 180 calendar days to regain compliance. If the company
does not regain the compliance within the initial 180 days, the company may be eligible for an additional 180-day period as
set forth in NASDAQ listing rule 5810(c)(3)(A). The company may regain compliance if the bid price of its shares closes at $1.00
per share or more for a minimum of ten consecutive business days at any time during the cure period.



On December 27,
2016, the Company received notice from NASDAQ that the minimum bid price for our ADS was below $1.00 per ADS for a period of 30
consecutive business days, and that we therefore did not meet the minimum bid price requirement of the NASDAQ Listing Rule. Based
on the Company’s application, on July 11, 2017, NASDAQ approved the transfer of the Company’s ADS to the NASDAQ
Capital Market under the same symbol “SIFY” and granted additional 180 days calendar period to cure the minimum bid
price deficiency.



On September 28, 2017,
the Company received a letter from NASDAQ stating that the closing bid price of the Company’s ADS had been $1 or greater
for 10 consecutive trading days. Accordingly, the Company regained compliance with the Listing Rule 5550(a)(2).



On April 23, 2020,
Sify Technologies Limited (the “Company”) received a letter from the Listing Qualifications Department of the Nasdaq
Stock Market (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock for the
last 30 consecutive business days, the Company did not meet the minimum bid price of $1.00 per share required for continued listing
on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2).



The letter also indicated
that the Company will be provided with a compliance period of 180 calendar days in which to regain compliance pursuant to Nasdaq
Listing Rule 5810(c)(3)(A).



Given the extraordinary
market conditions, Nasdaq has determined to toll the compliance periods for the bid price and market value of publicly held shares
(“MVPHS”) requirements (collectively, the “Price-based Requirements”) through June 30, 2020. In that regard,
on April 16, 2020, Nasdaq filed an immediately effective rule change with the Securities and Exchange Commission. As a result,
the compliance periods for the Price-based Requirements will be reinstated on July 1, 2020. This translates as 180 calendar days
provided to Sify to expire on December 28, 2020.



24







The letter further
provided that if, at any time during this tolling period or the 180-day period, the closing bid price of the Company’s common
stock is at least $1.00 for a minimum of ten consecutive business days, Nasdaq will provide the Company with written confirmation
that it has achieved compliance with the minimum bid price requirement.



Though the Company
regained compliance with the NASDAQ continued listing requirements in the past, we may not be able to meet the continued listing
requirements of NASDAQ today or in the future. If we are unable to satisfy the NASDAQ criteria for maintaining our listing, our
securities could be subject to delisting. As a consequence of any such delisting, our ADS holders would likely find it more difficult
to dispose of or to obtain accurate quotations as to the prices of our securities, and there would likely be less liquidity in
our stock. In the event of a delisting, we could face significant material adverse consequences including a limited availability
of market quotations for our securities and a decreased ability to issue additional securities or obtain additional financing in
the future.



The interests
of our significant shareholder, Mr. Raju Vegesna, our CEO, Chairman and Managing Director may differ from your interests.



Effective
as of October 30, 2010, upon the consummation of the private placement to an entity controlled by Mr. Raju Vegesna, our , CEO,
Managing Director and Chairman of the Board of Directors of the company, Mr. Raju Vegesna beneficially owns approximately 85.96%
of our outstanding equity shares. As a result, Mr. Raju Vegesna will be able to exercise control over many matters requiring approval
by our Board of Directors and / or shareholders, including the election of directors and approval of significant corporate transactions,
such as a sale of our company. Under Indian law, a simple majority is sufficient to control all shareholder action except for those
items, which require approval by a special resolution. If a special resolution is required, the number of votes cast in favor of
the resolution must not be less than three times the number of votes cast against it. Examples of actions that require a special
resolution include:



| | • | altering our Articles of Association;
| | - | -------------------------------------



| | • | issuing additional shares of capital stock, except for pro rata issuances to existing shareholders;
| | - | ---------------------------------------------------------------------------------------------------



| | • | commencing any new line of business; and
| | - | ----------------------------------------



| | • | commencing a liquidation.
| | - | -------------------------



Circumstances
may arise in which the interests of Mr. Raju Vegesna could conflict with the interests of our other shareholders or holders of
our ADSs. Mr. Vegesna, or the entities that he controls, could delay or prevent a change of control of our Company even if a transaction
of that sort would be beneficial to our other shareholders, including the holders of our ADSs. This concentrated control will
limit your ability to influence corporate matters and as a result, we may take actions that our ADS holders do not view as beneficial. As
a result, the market price of our ADS could be adversely affected.



An investor in our ADSs may not be
able to exercise preemptive rights for additional shares and may thereby suffer dilution of such investor's equity interest in
us.



Under the Companies
Act, 2013, or the Indian Companies Act, a Company incorporated in India must offer its holders of equity shares pre-emptive rights
to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages prior to the issuance
of any new equity shares, unless such pre-emptive rights have been waived by three-fourths of the shares voting on the resolution
to waive such rights.



Holders of ADSs may
be unable to exercise pre-emptive rights for equity shares underlying ADSs unless a registration statement under the Securities
Act of 1933, as amended, or the Securities Act, is effective with respect to such rights or an exemption from the registration
requirements of the Securities Act is available. To the extent that holders of ADSs are unable to exercise pre-emptive rights granted
in respect of the equity shares represented by their ADSs, their proportional interests in us would be reduced.



ADS holders
may be restricted in their ability to exercise voting rights.



At
our request, Citibank N.A, (the “Depository”)will mail to holders of our ADSs any notice of shareholders’
meeting received from us together with information explaining how to instruct the Depository to exercise the voting rights of the
securities represented by ADSs. If the Depository receives voting instructions from a holder of our ADSs in time, relating to matters
that have been forwarded to such holder, it will endeavor to vote the securities represented by such holder’s ADSs in accordance
with such voting instructions. However, the ability of the Depository to carry out voting instructions may be limited by practical
and legal limitations and the terms of the securities on deposit. We cannot assure you that the holders of our ADSs will receive
voting materials in time to enable such holders to return voting instructions to the Depository. Securities for which no voting
instructions have been received will not be eligible to vote.



25







Under Indian law, subject
to the presence in person at a shareholder meeting of persons holding equity shares representing a quorum, all resolutions proposed
to be approved at that meeting are voted on by a show of hands unless shareholders present in person and holding (a) not less than
one-tenth of the total voting power entitled to vote on a resolution or (b) shares with an aggregate paid up capital of at least
₹ 500,000 demand that a poll be taken. Equity shares not represented in person at the meeting, including equity shares underlying
ADSs for which a holder has provided voting instructions to the Depository, are not counted in a vote by show of hands. As a result,
only in the event that a shareholder present at the meeting demands that a poll be taken will the votes of ADS holders be counted.
Securities for which no voting instructions have been received will not be voted on a poll. Accordingly, you may not be able to
participate in all offerings, transactions or votes that are made available to holders of our equity shares.



As
a foreign private issuer, we are not subject to the SEC’s proxy rules, which regulate the form and content of solicitations
by United States-based issuers of proxies from their shareholders. To date, our practice has been to provide advance notice
to our ADS holders of all shareholder meetings and to solicit their vote on such matters through the Depository, and we expect
to continue this practice. The form of notice and proxy statement that we have been using does not include all of the information
that would be provided under the SEC’s proxy rules.



The market
price of our ADSs has been and may continue to be highly volatile. Many factors could cause the market price of our ADSs to rise
and fall. Some of these factors include:



| | • | perception of the level of political and economic stability in India;
| | - | ---------------------------------------------------------------------



| | • | actual or anticipated variations in our quarterly operating results;
| | - | --------------------------------------------------------------------



| | • | announcement of technological innovations;
| | - | ------------------------------------------



| | • | conditions or trends in the network/data services, Internet and electronic commerce industries;
| | - | -----------------------------------------------------------------------------------------------



| | • | the competitive and pricing environment for network services in India and the related cost and availability
of bandwidth;
| | - | -------------------------------------------------------------------------------------------------------------------------



| | • | the perceived attractiveness of investment in Indian companies;
| | - | ---------------------------------------------------------------



| | • | acquisitions and alliances by us or others in the industry;
| | - | -----------------------------------------------------------



| | • | changes in estimates of our performance or recommendations by financial analysts;
| | - | ---------------------------------------------------------------------------------



| | • | market conditions in the industry and the economy as a whole;
| | - | -------------------------------------------------------------



| | • | introduction of new services by us or our competitors;
| | - | ------------------------------------------------------



| | • | changes in the market valuations of other Internet service companies;
| | - | ---------------------------------------------------------------------



| | • | announcements by us or our competitors of significant acquisitions, strategic partnerships, joint
ventures or capital commitments;
| | - | ----------------------------------------------------------------------------------------------------------------------------------



| | • | our failure to integrate successfully our operations with those of any acquired companies;
| | - | ------------------------------------------------------------------------------------------



| | • | additions or departures of key personnel; and
| | - | ---------------------------------------------



| | • | other events or factors, many of which are beyond our control.
| | - | --------------------------------------------------------------



The
financial markets in the United States and other countries have experienced significant price and volume fluctuations, and the
market prices of technology companies, particularly Internet-related companies, have been and continue to be extremely volatile
with negative sentiment prevailing. Volatility in the price of our ADSs may be caused by factors outside of our control and may
be unrelated or disproportionate to our operating results, which may adversely affect the value of your investment and the price
of our ADSs.



26







An active
or liquid market for the ADSs is not assured.



We
cannot predict that an active, liquid public trading market for our ADSs will continue to exist. Although ADS holders are entitled
to withdraw the equity shares underlying the ADSs from the Depository at any time, there is no public market for our equity shares
in India or the United States.  The loss of liquidity could increase the price volatility of our ADSs.



The future
sales of securities by us or existing shareholders may reduce the price of our ADSs.



Any
significant sales of our equity shares or ADSs or a perception that such sales may occur might reduce the price of our ADSs and
make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. We may
issue additional equity shares to raise capital and to fund acquisitions and investments, and the parties to any such future transactions
could also decide to sell them.



Capital
and credit market conditions may adversely affect our access to capital, the cost of capital, and ability to execute our business
plan.



Access
to capital markets is critical to our ability to operate. We may require additional financing in the future for the development
of our business. Declines and uncertainties in the global capital markets over the years have severely restricted raising
new capital and have affected companies’ ability to continue to expand or fund new projects. If these economic conditions
continue or become worse, our future cost of equity or debt capital and access to the capital markets could be adversely affected.  Our
ability to obtain future financing will depend on, among other things, our financial condition and results of operations as well
as the condition of the capital markets or other credit markets at the time we seek financing. In addition, an inability to
access the capital markets on favorable terms due to our low stock price, or upon our delisting from the NASDAQ Capital Market
if we fail to satisfy a listing requirement, could affect our ability to execute our business plan as scheduled.



We
can give no assurance as to the availability of such additional capital or, if available, whether it would be on terms acceptable
to us. In addition, we may continue to seek capital through the public or private sale of securities, if market conditions are
favorable for doing so. If we are successful in raising additional funds through the issuance of equity securities, stockholders
will likely experience substantial dilution. If we are unable to enter into the necessary financing arrangements or sufficient
funds are not available on acceptable terms when required, either due to market fluctuations or regulations imposed by the Indian
Governmental authorities, we may not have sufficient liquidity and our business may be adversely affected.



We may be required to list our Equity
Shares on an Indian stock exchange. If we were to list our Equity Shares on an Indian stock exchange, conditions in the Indian
securities market may require compliance with new and changing regulations framed by Securities Exchange Board of India, listing
requirements of stock exchange, corporate governance, accounting and public disclosure requirements which might add uncertainty
to our compliance policies and increases our costs of compliance.



In 2006, The Ministry
of Finance (MoF), issued a press release by which Indian companies cannot raise new capital abroad unless, the securities of the
company are listed on a stock exchange in India. However, by virtue of notification issued by the MoF on October 21, 2014,
the issuance of depository receipts has been taken out of the 1993 Scheme and is now regulated by the Depository Receipts Scheme,
2014. The 2014 Scheme allows Indian companies, whether listed or unlisted, to access the international capital markets using depository
receipts. Such issuances can either be through a public offering of depository receipts or through a preferential allotment or
qualified institutional placement. They can also either be sponsored by the issuer company or unsponsored (such as when an existing
shareholder sells its holding through the issue of depository receipts). These issuances are subject to the usual foreign investment
regime, including in relation to sectoral caps as well as pricing.  Moreover, such issuances are permitted only to investors
in certain specific jurisdictions as listed in the 2014 Scheme, which currently consists of a list of 34 countries. The earlier
condition of mandatory listing in India is dispensed with.



However, in the future
we may be required by the Government of India to list on the Indian stock exchange. We may not be able to comply with any timeline
for listing and other standards imposed on us, and we are uncertain as to the consequences to us of any non-compliance. If we were
to list our equity shares on an Indian stock exchange, we would have to comply with changing laws, regulations and standards relating
to accounting, corporate governance and public disclosure, including the SEBI rules and regulations and stock exchange listing
requirements which may create uncertainty for companies like ours. These new or changed laws, regulations and standards may lack
specificity and are subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided
by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs of
compliance as a result of ongoing revisions to such governance standards.



27







Risks Related to Investments in Indian
Companies



We
are incorporated in India, and a significant majority of our assets and employees are located in India. Consequently, our financial
performance and the market price of our ADSs will be affected by changes in exchange rates, interest rates, Government of India
policies, including taxation policies, as well as political, social and economic developments affecting India.



Changes
in the policies of the Government of India could delay the further liberalization of the Indian economy and adversely affect economic
conditions in India generally, which could impact our business and prospects.



Since
1991, successive Indian Governments have pursued policies of economic liberalization, including significantly relaxing restrictions
on the private sector. Nevertheless, the role of the Central and State Governments in the Indian economy as producers, consumers
and regulators has remained significant. The rate of economic liberalization could change, and specific laws and policies affecting
technology and telecom companies, foreign investment, exchange rate regime and other matters affecting investment in our securities
could change as well. A significant change in India's economic liberalization and deregulation policies could adversely affect
business and economic conditions in India generally, and our business in particular.



Regional conflicts
in South Asia could adversely affect the Indian economy, disrupt our operations and cause our business to suffer.



South
Asia has, from time to time, experienced instances of civil unrest and hostilities among neighboring countries, including between
India and Pakistan. Military activity or terrorist attacks in the future could influence the Indian economy by disrupting communications
and making travel more difficult and such political tensions could create a greater perception that investments in Indian companies
involve higher degrees of risk. This, in turn, could have a material adverse effect on the market for securities of Indian companies,
including our equity shares and our ADSs, and the market for our services.



Terrorist
attacks or a war could adversely affect our business, results of operations and financial condition.



Terrorist
attacks, such as the attacks of February 14, 2019 in Jammu Srinagar highway (Pulwama attack), the attacks of July 25, 2008
in Bangalore, the attacks of November 26 to 29, 2008 in Mumbai, the attack at New Delhi High Court on September 7, 2011 and other
acts of violence have the potential to affect us or our clients. In addition, such attacks may destabilize the economic and political
situation in India. Furthermore, such attacks could cause a disruption in the delivery of our services to our clients, and could
have a negative impact on our business, personnel, assets and results of operations, and could cause our clients or potential clients
to choose other vendors for the services we provide. Terrorist threats, attacks or war could make travel more difficult, may disrupt
our ability to provide services to our clients and could delay, postpone or cancel our clients' decisions to use our services.



The markets
in which we operate are subject to the risk of earthquakes, floods and other natural disasters.



Some
of the regions that we operate in, are prone to earthquakes, flooding and other natural disasters. In the event that any of our
business centers are affected by any such disasters, we may sustain damage to our operations and properties, suffer significant
financial losses and be unable to complete our client engagements in a timely manner, if at all. Further, in the event of a natural
disaster, we may also incur costs in redeploying personnel and property. In addition, if there is a major earthquake, flood or
other natural disaster in any of the locations in which a significant number of our customers are located, we face the risk that
our customers may incur losses, or sustained business interruption and/or loss which may materially impair their ability to continue
their purchase of products or services from us. A major earthquake, flood or other natural disaster in the markets in which we
operate could have a material adverse effect on our business, financial condition, results of operations and cash flows.



We are subject
to foreign investment restrictions under Indian law that limit our ability to attract foreign investors which, together with the
lack of a public market for our equity shares, may adversely impact the value of our ADSs.



Currently,
there is no public trading market for our equity shares in India or elsewhere nor can we assure you that we will take steps to
develop one. Our equity securities are only traded on NASDAQ through the ADSs. Under prior Indian laws and regulations, our Depository
could not accept deposits of outstanding equity shares and issue ADRs evidencing ADSs representing such equity shares without prior
approval of the Government of India. The Reserve Bank of India has announced fungibility regulations permitting, under limited
circumstances, the conversion of ADSs to equity shares and the reconversion of equity shares to ADSs provided that the actual number
of ADSs outstanding after such reconversion is not greater than the original number of ADSs outstanding. If you elect to surrender
your ADSs and receive equity shares, you will not be able to trade those equity shares on any securities market and under present
law, likely will not be permitted to reconvert those equity shares to ADSs.



28







If
in the future a market for our equity shares is established in India or another market outside of the United States, those shares
may trade at a discount or premium to the ADSs. Under current Indian regulations and practice, the approval of the Reserve Bank
of India is not required for the sale of equity shares underlying ADSs by a non-resident Indian to a resident India as well as
for renunciation of rights to a resident of India, unless the sale of equity shares underlying the ADSs is through a recognized
stock exchange or in connection with the offer made under the regulations regarding takeovers. Since exchange controls still exist
in India, the Reserve Bank of India will approve the price at which the equity shares are transferred based on a specified formula,
and a higher price per share may not be permitted. Holders who seek to convert the rupee proceeds from a sale of equity shares
in India into foreign currency and repatriate that foreign currency from India will have to obtain Reserve Bank of India approval
for each transaction. We cannot assure you that any required approval from the Reserve Bank of India or any other government agency
can be obtained.



The Government of India may change
its regulation of our business or the terms of our license to provide Internet access services, Voice over Internet Protocol (VoIP)
and VPN services without our consent, and any such change could decrease our revenues and/or increase our costs, which would adversely
affect our operating results.



Our business is highly
regulated as per extant telecom policy of the Government of India (the “GOI”). Our ISP license issued in the year 1998
was valid for a term of 15 years. We have been issued new licenses under the Unified License dated June 2, 2014 with a validity
of 20 years. If we are unable to renew the licenses for any reason, we will not be able to carry on the said business beyond license
term, which may adversely affect our business or results of operations



The GOI has right to
revoke, terminate or suspend or take over entire operations for reasons such as national security or similar reasons without compensation
to us. In view of increasing cyber threats and attacks, the GOI may require telecom licensees (including ISPs) at their costs to
provide monitoring facility across its network, and facilities for capture and retention of data in terms of traffic flow, usage
details, etc. This would result in significant increase in costs and possible lesser usage due to perceived invasion of privacy
by customers.



Certain government
departments have been making queries whether use of Session Initiation Protocol, or SIP, terminal to make calls to phones abroad
is permissible within ISP license. We believe that such overseas phone calls are permitted, since, SIP terminal is a “computer”
as defined in Information Technology Act, 2000. We may have to make a significant investment as capital outlay in SIP terminals
to make it a PC-equivalent, if the government authorities issue regulations governing SIP usage contrary to our beliefs, which
would have a material effect on our results of operations.



Our profits may be impacted due to
the increase in license fee on the NLD/ILD license and inclusion of pure Internet service and non-licensed activities under such
license fee by the Department of Telecommunications, Government of India.



Effective
July 2012, the Government of India amended the NLD/ILD/ISP license agreements with respect to Annual License Fee.



Under such amendment,
all services under the NLD/ILD license have been subjected to an increased license fee from the existing 6% to 7% from July 2012
to March 2013 and 8% from April 2013 onwards. In addition, the Government has also amended the ISP license and brought the same
under such license fee of 7% from July 2012 till March 2013 and 8% from April 2013 onwards. Our present license for Unified License
ISP issued on June 2, 2014 provides for payment of License fee on pure
Internet services also. The Company had approached Honourable High Court of Madras (Court) by filing a writ petition prohibiting
Department of Telecommunications (DOT) from levying license fee on non-licensed activities.



Such
amendments to the license agreements will significantly impact the profitability of the Company by way of additional expense
due to increased license fees.



Increase
in license fees paid for the licensed spectrum to Department of Telecommunications (‘DoT’) may adversely affect our
cost and in turn our cash flow and profitability



DoT
may increase significantly the license fees to be paid for using the licensed spectrum. This will adversely affect our profitability.
We cannot assure you that there would not be any increases of license fees in the future.



29







In the event that the Government
of India or the Government of another country changes its tax policies in a manner that is adverse to us, our tax expense may materially
increase, reducing our profitability.



The statutory corporate
income tax rate in India was 30% during fiscal year 2020 and was subject to a 12% surcharge where the taxable total income exceeds
₹ 10 crore (7% where the taxable total income is less than ₹ 10 crores but greater than ₹ 1 crore), 4% health
and education cess resulting in an effective tax rate of 34.944%. New corporate tax regime was introduced reducing the corporate
tax rate to 22%. The provisions are discussed in detail under the head ‘Additional information’.



We
cannot assure you that the surcharge will be in effect for a limited period of time or that additional surcharges will not be implemented
by the Government of India. We may be subject to tax claims by the Government of India against us in the future. Defending these
claims would be expensive, time consuming and may divert our management's attention and resources from our operations.



Goods
and Services Tax has replaced the majority of the existing indirect tax regulations in India. The point of taxation has been changed
and also rates for our services were increased from 15% to 18%. Consequently, the incremental costs will impact the profitability
and cash flow of the company. There may be future increases in tax rate that will impact our profitability and cash flows adversely.



Item 4.Information on the Company



Company Overview



We are among the largest integrated ICT
Solutions and Services companies in India, offering end-to-end solutions with a comprehensive range of products delivered over
a common network infrastructure reaching more than 1600 cities and towns in India. This network also connects 49 Data Centers across
India including Sify’s 10 concurrently maintainable Data Centers across the cities of Chennai, Mumbai, Delhi, Bengaluru,
Hyderabad, Kolkata and customer Data Centers.



Our mission is building a world in which
our converged ICT ecosystem and our ‘bring it on’ attitude will be the competitive advantage to our customers. Our
7 core values which is called ‘The Sify way’ are 1) Put customers’ needs first, 2) Be accountable, 3) Treat others
with dignity, 4) Be action oriented, 5) Have the courage to confront issues, 6) Always remember that you are a part of Sify’s
team, 7) Protect Sify’s interest always.



Our primary geographic market are India
and Rest of the world. Our revenue is derived from services to enterprise customers, comprising Network services*, Data Center
services, Cloud and Managed services, Technology Integration services and Applications Integration services.



* The word telecom was largely understood
as providing telecommunication services to consumers and also mobility services. Since the company services were not relating to
either consumer services or mobility services and that company services were limited to enterprise data network, and services on
the data network that spawns multiple services relating to Network Connectivity, the said Telecom services will henceforth be referred
for appropriate representation of the substance, as Network services and all businesses dependent on the Network infrastructure
will be collectively referred to as Network Centric Services



Our revenue grew by ₹1,405 million over the previous fiscal, which represents an annualized growth rate of 7% . We have been subject to tax on
net income from current fiscal, on account of utilization of all the unabsorbed depreciation and carried forward business losses.
Profit before tax was ₹ 1,020 million for the current fiscal as compared to ₹ 1,072 million for the previous fiscal.



HISTORY AND DEVELOPMENT



We were incorporated
on December 12, 1995 in Andhra Pradesh, India as Satyam Infoway Private Limited, a Company under the Indian Companies Act, 1956
to develop and offer connectivity-based corporate services in India. Until December 2002, we were a majority-owned subsidiary of
Satyam Computer Services Limited, an Indian information technology Services Company traded on the New York Stock Exchange and the
principal Indian Stock Exchanges. We changed our name from Satyam Infoway Limited to Sify Limited in January 2003 and from Sify
Limited to Sify Technologies Limited in October 2007. We completed our initial public offering of ADSs in the United States in
October 1999. We listed our ADS on the NASDAQ Global Market on October 19, 1999. In February 2000, we completed our secondary offering
of ADS in the United States.



Refer to Note 33 ‘Related
Party Transactions’ in Item 18 of this Annual Report for the list of our subsidiaries



30







The address of our
principal executive office is TIDEL Park, 2nd Floor, 4, Rajiv Gandhi Salai, Taramani, Chennai 600 113 India, and our telephone
number is 91-44-2254-0770. Our agent for Investors Relations in the United States is Grayling Global, 101 Avenue of the Americas,
14th Floor, NY 10013, United States, phone +1-646-284-9400. Our website address is www.sifytechnologies.com and the information
contained in our website does not constitute a part of this Annual Report.



All of our publicly filed SEC reports are
available at the SEC’s website, www.sec.gov, which contains all the public filings and other information regarding registrants
that make electronic filings with the SEC using its EDGAR system.



Initial Public Offering
and Subsequent Financing Transactions



In October 1999, we
completed our initial public offering on the NASDAQ National Market and issued 4,801,250 ADSs at a price of $18.00 per ADS. We
received proceeds of approximately $79.2 million, net of underwriting discounts, commissions and other offering costs. In connection
with our initial public offering, we received the benefit of exemptions from the NASDAQ corporate governance rules relating to
shareholder meeting quorum, solicitation of proxies and shareholder approval for issue of shares other than in a public offering
under NASDAQ rules. We will continue to avail of the exemptions from the NASDAQ corporate governance rules.



In February 2000, we
completed a secondary offering and issued 467,175 ADSs at a price of $320.00 per ADS. We received proceeds of approximately $141.2
million, net of underwriting discounts, commissions and other costs.



In October 2002, we
agreed to sell an aggregate of 7,558,140 ADSs to SAIF for consideration of $13.0 million and to sell an aggregate of 2,034,883
equity shares to VentureTech for consideration of $3.5 million. This transaction was approved by our shareholders at our Extraordinary
General Meeting held on December 9, 2002. In December 2002, we completed the sale of the ADSs to SAIF and the sale of 2,034,883
equity shares to VentureTech. In April 2003, we sold an additional 1,017,442 equity shares to VentureTech. In July 2003, we sold
an additional 1,017,441 ADSs to an affiliate of Venture Tech.



On November 10, 2005,
Infinity Capital Ventures, LP (“Infinity Capital”) acquired 11,182,600 ADS of our Company from Satyam Computer Services
Limited (“Satyam”) for US $5.60 per share in cash through a Sponsored ADR Program arranged by the Company. The total
purchase price for the Satyam shares was approximately US $62.6 million.



In a separate transaction,
also on November 10, 2005, Infinity Capital entered into a Subscription Agreement with us pursuant to which, upon the terms and
subject to the conditions set forth therein, Infinity Capital agreed to purchase from us approximately 6.7 million newly-issued
equity shares or ADSs at a purchase price of US $5.60 per share in cash. The total purchase price for the newly issued shares was
approximately US $37.5 million. This transaction was approved by our shareholders at our Extraordinary General Meeting held on
December 23, 2005. In January 2006, we completed the transaction. Also, on November 10, 2005, Sify, Infinity Capital and Mr. Raju
Vegesna entered into a Standstill Agreement pursuant to which, upon the terms and subject to the conditions set forth therein,
Infinity Capital agreed not to purchase more than 45% of our fully diluted equity. The Board of Directors waived the above clause
in the standstill agreement passed through a Board resolution dated January 22, 2008.



Following the transactions,
Mr. Raju Vegesna of Infinity Capital was appointed as the Chairman of our Board of Directors. Mr. P. S. Raju was the second nominee
of Infinity Capital to our Board of Directors.



On March 24, 2008,
the Company entered into a Subscription Agreement with Infinity Satcom Universal Private Limited (Infinity Satcom Universal), a
private limited Company in India which is controlled by Ananda Raju Vegesna and brother of Raju Vegesna, CEO, Chairman and Managing
Director, for issuance of 12,817,000 Equity Shares of the Company with face value of ₹
10/- per share at a premium of ₹ 165/-. It was approved by
the Company’s shareholders at the Extraordinary General Meeting held on March 17, 2008.



On March 24, 2008,
we received a sum of ₹ 112.14 million (comprising of ₹
12.81 million towards face value and ₹ 99.33 million towards
securities premium). Subsequently, Infinity Satcom Universal communicated to the Company that they would focus their attention
on the business of Sify Communication Limited (erstwhile subsidiary) and hence shall not contribute the balance money towards the
subscription of 12,817,000 Equity Shares on call. On August 29, 2008, the Board of Directors, forfeited the shares allotted and
the application monies collected (₹ 112.14 million including
sums towards capital and premium).



31







On October 30, 2010,
we consummated the issuance and sale of 125,000,000 of our equity shares in a private placement to Raju Vegesna Infotech and Industries
Private Limited, our promoter group, and an entity affiliated with our CEO, Managing Director and Chairman, Mr. Raju Vegesna. See
note 36 in the notes to the financial statements in this Annual Report.



Acquisition of Minority
Interest in Subsidiary



In January 2008, our
Board of Directors of Sify approved the merger of our subsidiary, Sify Communications Limited (“Sify Comm”) with our
Company. The Boards of each of Sify and Sify Comm determined that a merger would produce cost savings efficiencies and as a combined
entity, benefit all shareholders. The Board then submitted the proposed merger to the shareholders and to the High Court of Madras
for approval. In August 2008, while approval for the merger was pending, the Indian Government proposed new regulations regarding
the delivery of Internet services and was expected to announce changes to the policy governing the spectrum for the delivery of
wireless data. The Board reviewed these regulatory changes and determined that it would be in the best interest of each Company
to remain as separate entities, as opposed to combining the entities as contemplated by the proposed merger. The Company submitted
a petition to the High Court of Madras to withdraw the merger, and such petition was approved.



In October 2008, the
Company again evaluated the feasibility of a merger between Sify and Sify Comm and the Board of Directors of the Company at their
meeting held on November 24, 2008 approved the merger of Sify Comm with retrospective effect from April 1, 2008, subject to approval
by the Shareholders, the Honorable High Court and other statutory authorities. The Board considered the deterioration of the Indian
and global economy, and its effect on the Company’s performance during the first half of fiscal 2009 as well as the impact
of a prolonged economic downturn on the Company during the third and fourth 2009 fiscal quarters. The Board evaluated these issues
and determined that a combined entity would provide cost savings and increased cash flow, and strengthen the Company’s ability
to borrow additional funds, if necessary. Accordingly, the Board of Sify determined that the merger should again proceed and sought
shareholder approval and submitted the merger to the High Court of Madras for approval. The Honorable High Court approved the merger
on 26th June 2009. In connection with such merger the Company has issued 10.53 million equity shares to Infinity Satcom Universal
Private Limited, a 26% stake holder in the erstwhile Sify Communications Limited prior to merger.



On July 15, 2009, Infinity
Satcom Universal Private Limited has acquired 4,000,000 shares of the Company from Infinity Capital LP, USA in a private transaction.



Principal Capital Expenditures



In fiscal years 2020, 2019 and 2018, we
spent ₹ 2,382 million (US$ 34.44 million), ₹
1,475 million (US$ 22.67 million) and ₹ 1,940 million (US$
29.92 million) respectively, on capital expenditures of which ₹1.63 million (US$ 0.024 million), ₹0.31 million (US$
0.004 million) and ₹1 million (US$ 0.02 million) were incurred
in North America in fiscal years 2020, 2019 and 2018 respectively. . The remaining amounts were incurred in India. As of March
31, 2020, we had contractual commitments of approximately ₹
6,141 million (US $81.46 million) for capital expenditures towards the acquisition of property, plant and equipment. These commitments
included approximately ₹ 4,908 million (US $ 65.11 million)
in domestic purchases and ₹ 1,232 million (US $ 16.35 million)
in imports and overseas commitments for products and spares. The total capital expenditure with respect to capital work in progress
as on March 31, 2020 amounted to ₹ 905 million (US$ 12.01 million). All our capital expenditures were financed out of cash
generated from operations, equity infusion, finance leases and borrowings from banks.



Investment Strategy



In evaluating investment
opportunities, we consider important factors, such as strategic fit, competitive advantage and financial benefit, through a formal
net present value evaluation.



Proposed demerger



Our Board of Directors, in its meeting
held on May 5, 2020 has approved the proposal to demerge the businesses carried on by Sify Technologies Limited into two wholly
owned subsidiaries. Network centric businesses will be carried on by Sify Technologies Limited, while Data center services will
be transferred to one of the wholly owned subsidiaries and IT managed Services, which comprise of Cloud and Managed Services, Technology
Integration Services and Applications Integration Services will be transferred to the other wholly owned subsidiary. This would
help in strategic focus and strategic investments in to the developing business of Data center services and IT Managed Services.
The demerger is proposed to be executed as slump sale for exchange of shares of Subsidiary companies. The transaction will have
to be approved by Members in the AGM proposed to be held during September 2020.



32







BUSINESS OVERVIEW



Industry Overview



Rapid digital revolution is transforming
businesses in every industry across the world. The ICT industry is at the forefront of the digital revolution that is cascading
across industries, redefining business processes, customer experiences and cost economics. Advanced network technologies, the explosion
of bandwidth consumption, rapid adoption of cloud technologies and cloud-based applications resulting in massive need for increased
data processing and storage capabilities are catalyst to this digital revolution.



This digital revolution also meant that
IT investments of companies has shifted from building own IT infrastructure to adopting scalable, agile infrastructure on services
model. The need to leverage these technologies and models in the digital era coupled with the need to establish future proof businesses
are key strategic imperative for business leaders. This widens the paradigm of IT environment developing human-machine interfaces,
deriving value from large volumes of digitized data, building software applications that will build efficiency on distributed cloud
computing and one that is not restricted by the technology landscape of companies.



The rapid pace and the changes brought
in by digital revolution also means that the skillsets required to manage the IT and ICT landscape of companies are continuously
evolving. This is driving business to rely on third party providers to realize their business transformation objective.



While presenting strong market opportunities,
the digital revolution also means the ICT industry itself would have to transition to provide more flexible, scalable and agile
products and solutions to customers, reimagine the cost structures, embrace automation and other emerging technologies.



The COVID-19 pandemic with its disruption of demand and supply
chains across industries and geographies, has presented with opportunities for ICT industry with more companies looking towards
technology initiatives on automation, remote working, cloud-based applications, security of the data and application in the new
environment and managment of the changed IT policies.



Strategy



Our strategic objective is keeping our
customers ahead in their digital journey through our entire stack of ICT solutions and services and delivering value to all the
stakeholders involved – employees, suppliers, environment and the society and the shareholders.



In fiscal 2020, our strategy was driven
by the theme “cloud@core” to further strengthen our products, capabilities and solutions. Our focus areas to achieve
this were:



| | 1. | To continue investing in future proof infrastructure and technologies
| | -- | ---------------------------------------------------------------------

| | 2. | To productize our solutions to achieve scale
| | -- | --------------------------------------------

| | 3. | To Reskill our employees
| | -- | ------------------------

| | 4. | Investing in tools and technologies
| | -- | -----------------------------------



In fiscal 2021, we will continue to pursue
our strategy with the same principles. The investments we have made have served us well. We will continue to make investments in
building our capacities and resources while optimizing the way in which our operations and business processes are carried out with
automation technologies. We are reaching our customers with solutions that are productized with our “cloud@core” theme.
This approach will continue to be adopted even in the light of COVID-19, as we believe there will be a surge in demand for our
products and services once businesses are restarted.



Key highlights of our strategy execution
during fiscal 2020 are as follows:



| | 1. | To continue investing in future proof infrastructure and technologies
| | -- | ---------------------------------------------------------------------



Hyperscale network in two of the cities
in India went into service during the year. With this we have hyperscale networks in 5 major cities in India. We propose to extend
this to 3 more cities in the coming year. We have also invested in setting up of Edge Data Centers (Edge DC) in Tier 2 locations
where the network consumption is scaling with mobile network penetration in India and the necessity for Network nodes closer to
the eyeballs is fueling demand for these services.



33







We have continued to increase our data center capacity during
the current year as well. Our next Tier III data center in Hyderabad went live during the year. We have reached 70.87 MWA of capacity
during the year with 29.7 MWA of capacity added during the year. We have also upgraded one of our existing data centers during
the current year.



| | 2. | To productise our solutions to achieve scale
| | -- | --------------------------------------------



Productizing the existing solutions has
helped us achieve scale in terms of ability to deliver to large number of our customers, our solutions that would involve multiple
products across our service offerings. Customer experience has improved due to this standardization.



| | 3. | To Reskill our employees
| | -- | ------------------------



We have invested in reskilling of our employees
through our Learning and Development programs. The training enablement is done through various modes like ILT, VLT, eLearning and
Webinars. Around 2,714 associates have taken advantage of the eLearning platforms of myAcademy. Around 167 learning solutions have
been internally created, amounting to an aggregate duration of more than 45,000 hours.



In line with specific business needs, certification
programs are organized with a twin objective of meeting business goals and providing associates with an opportunity to strengthen
their conceptual, functional and technical expertise. Around 96 certifications have been created internally to validate learning
effectiveness across various skills. During 2019-20, 1,285 associates undertook internal certification programs and also industry
certifications offered by Amazon, Microsoft, SAP, etc. Training programs covering the certification content were organized, followed
by certifications.



| | 4. | Investing in tools and technologies
| | -- | -----------------------------------



We have enhanced our ERP features during
the current year. We have also invested in new tools for our unified infrastructure monitoring, management and customer relationship
management. The investments are made with a view to improve customer experience by optimizing business processes, enable automation
and analytics with the large pool of data that is collected.



Service Offerings



Our 5 business segments are grouped into two
broad categories:



| | 1) | Network centric services
| | -- | ------------------------

| | 2) | Data Center centric IT services
| | -- | -------------------------------



| | a) | Network-centric services
| | -- | ------------------------



| | (i) | Network Services
| | --- | ----------------



We offer a range of
network services and the related managed services with the network that reaches more than 1600 towns and cities, with over 3150
points of presence and with our Global Network Operations Center having over 500 associates managing network and network devices
of various customers across the globe Our network extends across the globe with 9 International POPs and seamless Network to Network
Interconnection with multiple global network providers. We have a cable landing station in India which lands two of the cable systems
that come into India.



Our network is built with a combination
of leased capacities, leased fiber and own fiber. Our strength has been delivering services on wireless last mile which helped
our strategy of hyper reach and with the investments in building fiber network in major cities is helping us have hyper scale network
delivered to our clients. We lease capacities from multiple telco operators and build redundancies relevant to our architecture.
We are carrier agnostic. The prices of network capacities that we procure has been relatively stable over the years. We have our
network spread across 1600 towns and cities, which is managed by our manpower and in certain cases through our field partners who
attend to tickets. Our rental of network nodes is a combination of full lease and colocation basis, which enables optimum operating
costs for our network. Major cost for our Network operations center which delivers managed services to our clients is employee
costs.



34







The focus of the Network Services is on
the following lines:-



| | § | India Network Business– Catering to the growing data communication needs of enterprises in India that demands agility and security, , we offer Internet, MPLS, SDWAN, Managed Wi-Fi, Internet of Things (IoT), and proactive monitoring and management of the network and devices on the network for the customers.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | § | Global Network Business – catering primarily to international carriers wanting to access Indian markets for Dedicated Internet Access, India In MPLS, Layer 1/Layer 2 and managed services
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | § | Wholesale Voice – Addressing the ‘India termination’ and several other countries for Hubbing.
| | - | ---------------------------------------------------------------------------------------------



| | § | Retail Voice – The company offers services in
the retail voice market in partnership with International players.
| | - | ----------------------------------------------------------------------------------------------------------------



The
following range of services are offered as part our network services portfolio:



WAN Portfolio



| | · | SecureConnect (TM)is our comprehensive offering of secure, reliable and scalable IPVPN solutions that meet both mission- critical data networking and converged voice, video and data connectivity needs. It offers a variety of intranet and extranet configurations for connecting offices, remote sites, traveling employees and business partners, whether in India or abroad. Our platform of services includes:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | ExpressConnect(TM), which offers a premium range of high-performance Internet bandwidth solutions for connecting regional offices, branch offices and remote locations to the corporate network. These solutions complement our SiteConnect range of MPLS enabled IPVPN solutions, provide high-speed bandwidth in those situations where basic connectivity and cost are the top concerns.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | PartnerConnect(TM) is our remote access VPN offering, for providing secure and restricted dial-up access to business partners such as dealers, distributors and suppliers to the corporate extranet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | DC/Cloud Interconnect portfolio
        
        Data Center Interconnect provides access
        to 48 major data centers across the country with Data center to Data center connectivity over Ethernet, Fiber Channel, SDH or IP/VPN.
        
        GlobalCloudConnect provides seamless connectivity
        to global cloud service providers and multiple direct interconnects to Cloud Service Providers in India like Amazon web services
        (AWS), Microsoft Azure and Google Cloud Interconnect.
        
        Oracle FastConnect provides access to Oracle
        Cloud region across the globe leveraging Sify’s GlobalCloudConnect,(GCC) and Interconnection in major data centers. Sify’s
        GCC interconnects with Oracle cloud infrastructure ensuring fast and reliable access to the cloud region
        
        AMS-IX is private internet exchange set
        up in Mumbai in partnership with Amsterdam Internet Exchange (AMS-IX) where we offer services of private peering for the content
        providers and the private ISPs
        
        Managed Network Services portfolio
        
        Network Operations Center (NOC) services
        offer full network, device and performance monitoring across network infrastructure and providers. We offer these services to customers
        as Shared NOC, Dedicated NOC and Hybrid NOC.
        
        CleanConnect(TM) which
        provides managed and secured internet connectivity to customers.
        
        RoamConnect(TM), is our national
        and international remote access VPN, which is used for securely connecting employees, while they are traveling, to the corporate
        intranet. Roam Connect features “single number access” to SifyNet from anywhere in the country and provides access
        from anywhere in the world through Sify’s alliances with overseas service providers.
        
        SiteConnect (TM)which
offers site-to-site managed MPLS-enabled IPVPN solutions for securely connecting regional and large branch offices within India
to the corporate Intranet.



35







GlobalSite Connect(TM),
an international site-to-site managed MPLS-enabled IPVPN solution, is used for securely connecting international branch offices
to the corporate offices. It provides connectivity anywhere in the world through Sify’s alliances and partnerships with global
overseas service providers such as Level 3, KDDI, and PCCW Global to name a few.



| | · | DDoS Protect services which offers protection
        from DDoS attack to corporate customers.                                                                                                                                                                                                                          
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | Managed SDWAN with features such as intelligent routing, faster troubleshooting, zero-touch provisioning, providing application level visibility, security, network management and performance management is a transformational approach to design enterprise WANs to simplify deployment and management of the network.



EDGE Services Portfolio



Edge Connect (Managed WLAN) provides Managed
Wi-Fi solutions offering connect devices to the network of the customer and the internet at customer locations.



Internet of Things (IoT) services leverages
our network, cloud, applications and network integration capabilities to deliver turnkey solutions to our customers ranging from
employee/vehicle tracking to smart metering, smart energy monitoring. There are off-the shelf solutions and customized solutions
to solve customer problems.



During the year, we have offered Managed
SDWAN, Internet of Things (IoT), Application to Person (A2P), Unified Communication as a service (UCaaS) along with scaling of
our existing network services portfolio.



| | b) | Data Center-centric IT services
| | -- | -------------------------------



| | (i) | Data Center services
| | --- | --------------------



Our Data centers are designed to be reliable,
secure and scalable to host mission-critical applications. We offer co-location services which allow customers to bring in their
own rack-mountable servers and house them in shared racks or hire complete racks, and rent ‘secure cages’ at the hosting
facility as per their application requirements. We also offer a wide variety of managed data center services, such as storage and
back-up management, performance monitoring and Infrastructure monitoring and management, network availability, server load balancing,
managed shared firewall, Web server log reporting and remote hands and smart hands services. Our data center in Rabale also hosts
our private internet exchange AMS-IX.



We pioneered the
Data Center business in India with the first commercial Data Center in Vashi in the year 2000, beginning small with 0.9 MW and
since then, has expanded to become one of the largest home-grown colocation service providers. Today, we offer a combined IT power
of 71 MW across its 10 Data Centers, located in all the major business districts. Sify Data Centers have distinguishing features
that help customers to stay ahead of the competition. Apart from all of them being Concurrently maintainable, the Rabale campus
comes with an on-premise substation and the Noida Data Center is amongst the few green Data Centers available in India. Our Data
Centers are built as per the 4th generation SDA (Sify Data Center Architecture) and operate on an ITIL-based service delivery framework.
These Data Centers have highly scalable IT infrastructure with mature operational processes, strong vendor relationships, and provide
industry standard IT support functions. All our Data Centers follow professional standards of ISO 9001 for quality, ISO 27001 for
information security and ISO 20000 for service delivery.



Power is the major source of input for
our DC operations. We source power from the Government in most of our Data Centers, while we have solar power generation, wind
power generation done in few of our facilities. We constantly look for alternate and sustainable sources of power to run our DC
operations in a cost-efficient manner.



| | (ii) | Cloud and Managed services
| | ---- | --------------------------



We offer range of cloud services to our
customers:



CloudInfinit is enterprise public cloud
services managed by our experts in our concurrently maintainable data centers, with ready to use compute, storage and network resources
to host applications of customers on multitenant cloud infrastructure. We offer Infrastructure as a Services (IaaS), Platform as
a Service (PaaS), Virtual Private Data Center (VPDC) in a secure SSAE-16 and SOC-2 accreditation.



36







GoInfinit VPE is a private cloud computing
service with dedicated compute capacity and secure logically segregated storage, network and security resources delivered out of
our robust Data Centers.



GoInifit AWS+ is offering public cloud
services out of AWS infrastructure. As a consulting partner for AWS, our managed services team provides the customer with variety
of services to simplify the AWS experience.



GoInfinit Private is an enterprise-grade,
fully integrated private cloud IT platform with specific controls, compliance and IT architecture in a flexible model. Containers
and rack space are fully cloud enabled, built to meet enterprise’s needs of today and tomorrow.



GoInfinit Backup is a simplified and standardized
data backup and recovery solution. This is available on-prem or in Sify data centers. This backup process is simplified and compatible
with a wide range of backup platforms, including Sify cloud and public clouds like Microsoft Azure and AWS.



GoInfinit Recover provides an unified data
protection solution. It includes backup, snapshot, disaster/ raid recovery, Dev/Test and analytics all through a single gold copy.
This SLA-backed disaster recovery as a service (DRaaS) offering enables fast recovery with complete protection of business systems
and data. It’s a complete data recovery services platform that customers address their disaster recovery management requirements
easily through scalable, secure and automated services



GoInfinit Accelerate is provided in partnership
with Akamai, a global Content Delivery Network (CDN) with presence in over 650 cities across the world. We offer cloud-based CDN
services and other SaaS in cloud computing to enable fast and secure content delivery to any device anywhere.



Our Remote and
Onsite Infrastructure Managed services provide continuous proactive management and support of customer operating systems, applications
and database layers through deploying specialized monitoring tools and infrastructure experts to ensure that our customers’
infrastructure is performing optimally.



Our Managed Security services are enabled
with Sify’s security experts using latest tools and technologies to monitor customer’s infrastructure and network every
minute of every day. They monitor all events, provide proactive and real-time attack mitigation. Based on the Sify Cyber Threat
Intelligence Framework - a set of comprehensive services and best practices developed over the past decade.



Our associates are major source of input
for the services provided in addition to the infrastructure that is built. Most of our associates have to carry additional certifications
or skillsets to offer managed services for our customers.



| | (iii) | Technology Integration services
| | ----- | -------------------------------



TIS leverages Sify’s home-grown expertise
in design, implementation and maintenance to deliver end- to-end managed IT services across Data Centers, network and security.



Major focus is as follows:



| | • | Service Desks and Command Centers
| | - | ---------------------------------

| | • | Voice and Video Conferencing
| | - | ----------------------------

| | • | Hosted Contact Centers
| | - | ----------------------

| | • | Unified Communication and Unified Access
| | - | ----------------------------------------

| | • | Virtualization
| | - | --------------

| | • | Data Center Build
| | - | -----------------

| | • | Campus/LAN/Data Center Networking
| | - | ---------------------------------

| | • | WAN Architectures
| | - | -----------------

| | • | Enterprise and End Point Security
| | - | ---------------------------------



Sify offers turnkey solutions to clients
who are new to both technology and technology refreshes. We do this by leveraging our home-grown expertise in design, implementation
and maintenance to deliver end-to-end managed IT services across datacenters, network and security.



37







As described, this business takes the knowledge
developed from building Network architecture, Collaborative tools, Data Center build, Virtualization, LAN and WAN Architecture
and End Point Security and offers them as a complete solution package to customers.



Our
myriad mix of solutions gives us the scope to band and extend any or all of these services in multiple formats and scales for client
who wish to rest their entire infrastructure with us. Clients get the benefit of our accumulated knowledge base and technical expertise
across all points of the ICT spectrum. In terms of cost, these translate into better cost efficiencies. In terms of monitoring,
the client interacts with a singular service provider saving them both implementation and documentation efforts.



Our
suite of conferencing tools consists of Audio and Video solutions; most differentiating among being that the video solution in
partnership with a world leader, does not require a room conferencing solution thereby arming the modern enterprise with real time
data straight from the markets.



| | (iv) | Applications Integration services
| | ---- | ---------------------------------



Our applications integration services were
built to leverage on our network, cloud, security capabilities and integrator strengths that would help us offer applications that
were developed in house and manage industry standard applications. Our offerings are:



Talent Management



iTest is our in-house application through
which we offer solutions such as Online examination services, Online Registration services and student lifecycle management services
to our customers.



Supply Chain Management



Forum NXT offers tools to effectively manage
front-end supply chain of our customers. It offers an integrated inventory system software and financial accounting systems that
can be used by all stakeholders in the distribution network of customers. Forum NXT automates salesforce operations with inventory
management mobile app for order tracking, market surveys, and more.



Web portal solutions



Sify.com channels



Sify.com
provides a gateway to the Internet by offering communication and search tools such as travel, online portfolio management and channels
for personal finance, astrology, lifestyle, shopping, movies, sports and news. We have also launched mobile applications to offer
the below-mentioned services on the mobile.



| | · | The finance channel of Sify http://sify.com/finance/covers the entire spectrum of
equity markets, business news, insurance, mutual funds, loans, SME news and a host of paid and free financial services.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The sports channel http://sify.com/sports/covers the entire gamut of Indian and
international sports with special focus on cricket.
| | - | -----------------------------------------------------------------------------------------------------------------------------------



| | · | The food channel www.bawarchi.comfocuses on Indian recipes and cooking and is especially
popular among non-resident Indians (NRIs) audiences with over 90% of its content being user generated
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Our
                                         NRI news portal, www.samachar.com focuses on Indian news and allows NRIs
                                         to stay connected to India by aggregating news from across all popular newspapers and
                                         other news portals. This portal provides a range of news in English and five Indian languages.
                                         Apart from Samachar we have another India targeted news channel http://sify.com/newswhich offers national and international general, political and offbeat news.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Movies channel on Sify http://sify.com/moviesis one of the key channels which offer
updates from Bollywood/ Hollywood and all regional film industries. The content includes movie reviews, industry news, video galleries,
photo galleries, downloads (photos) etc.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Games channel of Sify http://games.sify.comoffers multiple scoring and non-scoring games.
Games include cricketing games, racing games, football specific games.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



38









Content services – From strategy
to implementation, we enable our customers to have the most relevant content that can be easily discovered and shared.



Portal development - Our portal development
and maintenance solutions, leverage an extensive experience in handling challenging web development projects for some of India’s
leading government and private sector organization



eLearning



Our eLearning services create immersive
and engaging learning experiences with new technology and interactive learning. Our innovative eLearning technologies and courseware
solutions leverages the power of the web, mobile and the cloud. We offer custom solutions to customer to develop their courses
using modern technologies like Virtual Reality, Game based Learning and Interactive 3D learning in addition to more traditional
methods of instructor led training and developing video-based learning modules for our customers.



Digital Signature Services



Safescrypt is our flagship managed CA public
key infrastructure (PKI) services offered from our world class data center in Chennai. Our solution to customers incorporates business
and audit requirements in compliance with legal and regulatory mandates.

SAP Services



We offer a range of support services,
and our experts help with everything from SAP implementation and maintenance to SAP GST ready, SAP Basis and
SAP HANA cloud hosting to system improvements and innovation strategies. With our vast experience across geographies and industries,
we have the right people, practices, and solutions to help organizations generate the greatest return on their SAP investments
and build a transparent business



Microsoft Services



We offer support and implementation services
for Microsoft Office 365, Azure cloud solutions and SQL enterprise grid.



Oracle Services



We help customers
deploy their Oracle applications and business critical infrastructure – migrate, integrate and upgrade - either in their
Data Centre or enabling them to deploy over the Cloud. We help organizations of all sizes to deploy, migrate, integrate, develop,
enhance, optimize, monitor and manage Oracle software, platforms, and infrastructure. We have extensive expertise in Oracle technology
to help deploy:



| | · | Oracle Cloud infrastructure - application, platform
or infrastructure
| | - | ---------------------------------------------------------------------



| | · | Oracle On-Premise implementations - database, middleware
and Oracle applications
| | - | --------------------------------------------------------------------------------



| | · | Design of mobile apps, intelligent chatbots and custom
analytics for Oracle environments
| | - | ----------------------------------------------------------------------------------------



Customers



Our customers from India are spread across
industries and range in sizes from large corporations to SMB. We have customers across verticals like Banking Financial Services
and Insurance (BFSI), Manufacturing, Retail and Distribution (MRD), Pharmaceuticals, Media, Printing and Publishing, Information
Technology Enabled Services (ITES), Telecommunication, Power, Public Sector Units and Governments. We have more than 10000+ customers
as on date. We also have our wholesale businesses with fellow carriers for data, voice and data center services.



As a % of total revenue by geographic segment
for the last three fiscal years are as follows:



39







|Geography         |  | 2020 |       |   | 2019 |  |       | 2018 | 
|----------------- |  | ---- | ----- | - | ---- |  | ----- | ---- | 
|India             |  |      | 77.59 | % |      |  | 78.34 | %    | 
|Rest of the world |  |      | 22.41 | % |      |  | 21.66 | %    | 



As a % of total revenue by operating segment
for the last three fiscal years are as follows:



|Operating Segment                 |  | 2020 |       |   | 2019 |  |       | 2018 | 
|--------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- | 
|Network Services                  |  |      | 55.23 | % |      |  | 53.84 | %    | 
|Data center centric services      |  |      |       |   |      |  |       |      | 
|Data center Services              |  |      | 16.66 | % |      |  | 14.60 | %    | 
|Cloud and Managed Services        |  |      | 6.95  | % |      |  | 6.84  | %    | 
|Technology Integration Services   |  |      | 13.24 | % |      |  | 16.18 | %    | 
|Applications Integration Services |  |      | 7.93  | % |      |  | 8.54  | %    | 



Customer Service and Technical Support



We have a single window
help desk for all our customers across different service lines. This helps in customers reaching the right technical support at
an accelerated pace and get issues resolved. We support both telephonic and email interactions from our clients and support for
Enterprises services is 24x7.



Sales and Marketing



Our sales and marketing
functions are structured based on geographies to cater to the needs of respective markets. We have sales and marketing teams in
India, Singapore, United Kingdom and the United States. While India sales is further divided to regions such as North, East, West,
South and based on the customer segment as Digital Sales Team and Wholesale, the Singapore is responsible for rest of Asia Pacific,
United Kingdom is responsible for Europe market and the United States is responsible for coverage in North America.



Technology and Network Infrastructure



Geographic coverage: Our network
today reaches more than 1600 towns and cities and between them have more than 125,000+ links. This network is completely owned
giving us complete control on the technology, traffic and speed over them. These points of presence, or primary nodes, reside at
the core of a larger Internet protocol network with a Star and meshed topology architecture thereby building in redundancy at every
point and translating into minimum downtime for customers.



Today we offer the following services to
our Enterprise and consumer customers using our network.



| | · | Internet access services,
| | - | -------------------------

| | · | IP/ MPLS Virtual private networks
| | - | ---------------------------------

| | · | Internet based Voice services
| | - | -----------------------------

| | · | Layer 1 / Layer 2 networks
| | - | --------------------------

| | · | Data center / cloud interconnections
| | - | ------------------------------------



Each point of presence contains data communications
equipment housed in a secure facility owned, leased or operated on an infrastructure co-location basis by our Company. The last
mile connecting to the customer can be a leased line, ISDN or point-to-multipoint radio link which we have licensed from the Wireless
Planning Commission. We also use certain frequency radios, which do not require an operating license, in some locations. Our larger
corporate customers access the point of presence directly through leased lines or wireless links.



Network Architecture: We ensure
network reliability through several methods and have invested in proven technologies. We use routers to route traffic between nodes
interconnected using a high-speed interface. Most of our applications and network verification servers are manufactured by IBM,
Sun and Hewlett-Packard.



The primary nodes on the backbone network
are connected by multiple high-speed fiber optic lines that we lease from long distance operators. The secondary nodes are connected
by lower speed leased lines. A number of nodes are accessible from at least two other nodes, if not, by two long distance operators,
allowing us to reroute traffic in the event of failure on one route. We reduce our exposure to failures on the local loop by usually
locating our points of presence within range of service providers switching equipment and purchasing connectivity from multiple
providers. To further maximize our network uptime, we are almost completely connected on fiber optic cables to the switching points
of our service providers from our POPs.



40







In addition to a fundamental
emphasis on reliability and security, our network design philosophy has focused on compatibility, interoperability, scalability
and quality of service. We use Internet protocol with Multi-Protocol Label Switching, or MPLS, to transmit data, thus ensuring
that our network is completely interoperable with other networks and systems and that we may port any application onto our network.
The modular design of our network is fully scalable, allowing us to expand without changing the network design or architecture.



Network Operations Center: We maintain
a network operation center located in Chennai (Madras) and a backup facility in Mumbai (Bombay). The Chennai facility houses our
central network servers as well as our network staff who monitors network traffic, service quality and equipment at all our points
of presence to ensure a reliable network. These operation centers are staffed 24-hours-a-day, seven-days-a-week. We have backup
power generators and software and hardware systems designed to prevent network downtime in the event of system failures. In the
future, we may add additional facilities to supplement or add redundancy to our current network monitoring capability.



Data Center Infrastructure.We operate
10 concurrently maintainable Internet Data Centers, five in Mumbai, one each at Chennai, Bangalore, Hyderabad, Kolkatta and Noida
(UP). We offer managed hosting, security and infrastructure managed services from these facilities. These Data Centers are completely
integrated with our IP / MPLS network which provides seamless connectivity for our customers from their premise to their applications
hosted in the Data Centers. The Data Centers conform to the standards to cater to the security consideration of our customer servers.



Competition



The market we operate in is extremely competitive
as the technology landscape is rapidly changing. While we compete with large incumbent players, we also face competition from smaller
niche technology companies. We go through the process of Request for Proposals (RFP) from customers. Our ability to operate across
the spectrum of ICT has put us good stead in winning many of the integrated solution customers. We foresee competition to further
intensify with the digital revolutions giving rise to many smaller companies and also due to the trend of insourcing technology
services by our customers is a threat to us.



Intellectual Property



Our intellectual property
rights are important to our business. We rely on a combination of copyright and trademark laws, trade secrets, confidentiality
procedures and contractual provisions to protect our intellectual property. We have filed trademark and service mark applications
in India for registering our product and service offerings.



Our efforts to protect
our intellectual property may not be adequate. We hold no patents, and our competitors may independently develop similar technology
or duplicate our services. Unauthorized parties may infringe upon or misappropriate our services or proprietary information. In
addition, the laws of India do not protect proprietary rights to the same extent as laws in the United States, and the global nature
of the Internet makes it difficult to control the ultimate destination of our services. For example, the legal processes to protect
service marks in India are not as effective as those in place in the United States. The misappropriation or duplication of our
intellectual property could disrupt our ongoing business, distract our management and employees, reduce our revenues and increase
our expenses. In the future, litigation may be necessary to enforce our intellectual property rights or to determine the validity
and scope of the proprietary rights of others. Any such litigation could be time-consuming and costly.



We could be subject
to intellectual property infringement claims as the number of our competitors grows and the content and functionality of our websites
or other service offerings overlap with competitive offerings. Defending against these claims, even if not meritorious, could be
expensive and divert management’s attention from operating our Company. If we become liable to third parties for infringing
their intellectual property rights, we could be required to pay a substantial damage award and forced to develop non-infringing
technology, obtain a license or cease selling the applications that contain the infringing technology. We may be unable to develop
non-infringing technology or obtain a license on commercially reasonable terms, or at all.



We also rely on a variety
of technologies that are licensed from third parties. We use software developed by these and other companies to perform key functions.
These third-party licenses may not be available to us on commercially reasonable terms in the future. The loss of any of these
licenses could delay the introduction of software enhancements, interactive tools and other features until equivalent technology
could be licensed or developed. Any such delays could materially adversely affect our business, results of operations and financial
condition.



41







Government Regulation



Our business is subject
to comprehensive regulation by the Ministry of Communications through the Telecom Commission and the DoT, pursuant to the provisions
of the Indian Telegraph Act of 1885, or Telegraph Act, the India Wireless Telegraphy Act, 1933, or Wireless Act, the Information
Technology Act, 2000 or IT Act and the terms of our Internet service provider license issued by the DoT under which we operate.
Pursuant to the Telegraph Act, the provision of any telecommunications services in India requires a license from the Government
of India, obtained through the DoT. While the Telegraph Act sets the legal framework for regulation of the telecommunications sector
and the Wireless Act regulates the possession of wireless telegraphy equipment, much of the supervision and regulation of our Company
is implemented more informally through the general administrative powers of the DoT, including those reserved to the DoT and other
governmental agencies under our license.



In March 1997, the
Government of India established the TRAI, an independent regulatory authority, under the provisions of the Telecom Regulatory Authority
of India Act. The TRAI is an autonomous body consisting of a chairperson and at least two and not more than four members.



Under the Telecom Regulatory
Authority of India Act, the functions of the TRAI are to:



| | • | make recommendations on (i) the need and timing for the introduction of new service providers, (ii) the terms and conditions of licenses granted to service providers, (iii) the revocation of licenses for non-compliance, (iv) measures to facilitate competition and promote efficiency in the operation of telecommunications services so as to facilitate growth in such services, (v) technological improvements in the services provided by service providers, (vi) the type of equipment to be used by service providers, (vii) measures for the development of telecommunications technology and the telecommunications industry and (viii) the efficient management of the available spectrum;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | discharge the following functions: (i) ensure compliance of the terms and conditions of licenses, (ii) fix the terms and conditions of interconnectivity between service providers, (iii) ensure technical compatibility and effective interconnection between service providers, (iv) regulate revenue sharing arrangements between service providers, (v) establish standards of quality of service, (vi) establish time periods for providing local and long distance telecommunications circuits between service providers, (vii) maintain and keep for public inspection a register of interconnect agreements and (viii) ensure effective compliance of universal service obligations;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | levy fees and other charges at such rates and in respect of such services as may be determined by regulation; and
| | - | -----------------------------------------------------------------------------------------------------------------



| | • | perform such other functions as may be entrusted to it by the Government of India or as may be necessary to carry out the provisions of the Telecom Regulatory Authority of India Act.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The TRAI also has the
authority to, from time to time, set the rates at which domestic and international telecommunications services are provided in
India. The TRAI does not have authority to grant licenses to service providers or renew licenses, functions that remain with the
DOT. The TRAI, however, has the following powers:



| | • | to call on service providers to furnish information relating to their operations;
| | - | ---------------------------------------------------------------------------------



| | • | to appoint persons to make official inquiries;
| | - | ----------------------------------------------



| | • | to inspect the books of service providers; and
| | - | ----------------------------------------------



| | • | to issue directives to service providers to ensure their proper functioning.
| | - | ----------------------------------------------------------------------------



Failure to follow TRAI
directives may lead to the imposition of fines. Decisions of the TRAI may be appealed to the Telecom Disputes Settlement and Appellate
Tribunal.



On May 31, 2012, the
Union Cabinet approved the National Telecom Policy-2012 (NTP-2012) and the Cabinet also approved introduction of Unified License
(UL), a new regime wherein all telecom-based government approvals are handled under one umbrella and authorized the Department
of Telecommunications (DoT) to finalize the new Unified Licensing regime. DoT issued Guidelines for Grant of Unified License -
vide No. 20-281/2010-AS-I (Vol.VI) dated August 19, 2013 and also notified Unified License agreement on August 2, 2013 with the
Corrigendum dated August 29, 2013



42







As per the new Guidelines,
any company applying for renewal of any license under New Unified License regime, such company has to apply for all the required
licenses for such company from DoT under new Unified License regime. The Company signed Unified License agreement with Government
of India on June 2, 2014 valid for 20 years.



In 2016, TRAI announced
a new VNO (Virtual Network Operator) license as a part of the Unified License regime for bringing in more players in the market
through resale model. The company applied and has been allotted this license for Chennai circle.



Organizational Structure



We are not part of
any group. A list of subsidiaries and relevant information about them is provided in Exhibit 8.1 to this Annual Report.



Property, Plant and Equipment



Investment in Network-centric services



We own approximately 100,000 square feet
corporate headquarters located in Chennai (Madras), India and an approximately 20,000 square feet regional office in Mumbai (Bombay).
We have leased approximately 3,500 square feet network operations center in Chennai.



Our Chennai facility houses our central
network servers as well as our network staff who monitors network traffic, service quality and equipment at all our points of presence,
or POPs, to ensure a reliable Internet service. We have POPs in over 1,600 towns/cities across India. Most of our POPs are staffed
24-hours-a-day, seven-days-a-week. Our POPs average approximately 750 square feet at each location. We have backup power generators
and software and hardware systems designed to prevent network downtime in the event of system failures. In the future, we may add
additional facilities to supplement or add redundancy to our current network monitoring capability. Our property, plants and equipment
are pledged towards obtaining loans / working capital facilities from banks.



The Company is part
of sub-consortium of the Europe India Gateway (EIG), undersea cable capacity between London and Mumbai. The Capacity went live
during fiscal 2013 and was upgraded during fiscal 2015, 2016, 2018 and 2019. This enables significant capacity on ground leading
to ability to service larger customers.



Investment in Data Center-centric Services



We have combined
IT power of 71 MW across our 10 data center facilities. All our data centers are concurrently maintainable, our Rabale campus comes
with an on-premise substation and our Noida DC is amongst the few green data centers in India. Our Data Centers provide high-level
security features like perimeter fence, gates, fire suppression, and 24X7 security officers. All critical areas have Biometric
Readers, Smart Card Access, and 24*7 CCTV surveillance. Noida and Rabale Data Centers come with a Z level security with advanced
fire alarm, aspirating smoke sensors, multilevel access control, and automatic fire suppression. We continue to expand our capacity
to meet the rising demands of data centers.



Item 4A. Unresolved Staff Comments



None.



Item
5.Operating and Financial Review and Prospects



The financial statements
of the Company included in this Annual Report on Form 20-F have been prepared in accordance with the English version of International
Financial Reporting Standards as issued by International Accounting Standards Board. The information set forth in Operating and
Financial Review and Prospects is also for the Company's three most recent fiscal years. The discussion, analysis and information
presented in this section should be read in conjunction with our financial statements included herein and the notes thereto. See
Note Regarding Forward-Looking Statements. Our actual results could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors, including, but not limited to, those described below and elsewhere in this annual
report, particularly in the risk factors described in “Part I — Item 3 Key Information - Risk Factors.”



43







Operating Results



This information is
set forth under the caption entitled 'Management's Discussion and Analysis of Financial Condition and Results of Operations' below.
Further, information relating to any governmental, economic policies or other factors which have materially affected, or could
materially affect, directly or indirectly, the company’s operations is set forth under the caption entitled ‘Risk Factors’
above.



Liquidity and Capital Resources



This information is
set forth under the caption entitled 'Management's Discussion and Analysis of Financial Condition and Results of Operations' below.



Research and Development



This information is
set forth under the caption entitled 'Management's Discussion and Analysis of Financial Condition and Results of Operations' below.



Trend Information



This information is
set forth under the caption entitled 'Management's Discussion and Analysis of Financial Condition and Results of Operations' below.



Management’s Discussion and Analysis
of Financial Condition and Results of Operations

(₹ in million, except share
data and where otherwise stated)



Overview



We are among the largest integrated ICT Solutions and Services
companies in India, offering end-to-end solutions with a comprehensive range of products delivered over a common data network infrastructure
reaching more than 1600 cities and towns in India. This network also connects 49 Data Centers across India including Sify’s
10 concurrently maintainable Data Centers across the cities of Chennai, Mumbai, Delhi and Bengaluru and customer Data Centers.



Our mission is building a world in which
our converged ICT ecosystem and our ‘bring it on’ attitude will be the competitive advantage to our customers. Our
7 core values which is called ‘The Sify way’ are 1) Put customers’ needs first, 2) Be accountable, 3) Treat others
with dignity, 4) Be action oriented, 5) Have the courage to confront issues, 6) Always remember that you are a part of Sify’s
team, 7) Protect Sify’s interest always.



Our primary geographic market are India
and Rest of the world. Our revenue is derived from services to enterprise customers, comprising Network services, Data Center services,
Cloud and Managed services, Technology Integration services and Applications Integration services.



We were incorporated on December 12, 1995
in Andhra Pradesh, India as Satyam Infoway Private Limited, a Company under the Indian Companies Act, 1956 to develop and offer
connectivity-based corporate services in India. We completed our initial public offering of ADSs in the United States in October
1999. We listed our ADS on the NASDAQ Global Market on October 19, 1999. In February 2000, we completed our secondary offering
of ADS in the United States.



Digital revolution is driving our customers
and prospective customers to transformation in every aspect of their businesses, which would include the entire spectrum of ICT
from network, storage, virtualization, network integration, analytics and applications on the cloud. We aim to keep our customers
ahead in this journey of digital future with our innovative products and solutions.



Our strategy was driven by the theme “cloud@core”
to further strengthen our products, capabilities and solutions. We have invested in the past and continue to invest in the future
on building future proof infrastructure and technologies. We have standardized our product offering to help us achieve scale. We
are continuously focused on reskilling and upskilling our employees while we continue to invest in tools and technologies like
Automation, Artificial Intelligence and Machine Learning.



44







Impact of COVID-19:



Global pandemic of covid-19 has resulted
in uncertainty in every aspect of life and hence we are not currently unable to predict the extent to which the pandemic will disrupt
our business and operations. In March 2020, as the COVID-19 pandemic rapidly spread,
governments across the world announced public health measures, including complete or partial lockdowns restricting movement of
people, goods and services. Economic activity was severely impacted, including disrupting the businesses of our customers.



As
a response to Covid-19, we triggered our Business Continuity Plan. Most of our employees were quickly asked to work from home.
In order to better support employees working from home, we have enhanced our cybersecurity measures by installing secure agents
in our systems. In parallel to our employees working from home, we reached out to our customers, briefed them of the measures
we were adopting and sought their approval. Through these efforts, we have been able to continue to support the majority of our
customers.



The
impact of Covid-19 on our businesses has not been material during the fiscal year ended March 31, 2020. With the increased adoption
of working from home, the needs of customers for ICT solutions are forecasted to increase in the future. The lockdown imposed in
various parts of the world, have delayed the decision-making processes of the customers, resulting in lower buoyancy in our order
book. However, we expect the impact during the year to be minimal with the higher need and acceptability for our services.



We
continue to focus on safety of our employees, infrastructure including the advent of higher cybersecurity threats and our customers.
With some impact on contracted revenue and softening of discretionary spends from customer side, and higher costs of operations
in the uncertain scenario due to covid-19, there will be some margin pressure in the near term. We are working to optimize cost
structure. Some of the activities we have initiated are:

| | · | Improve liquidity and cash management with focus on working
capital cycles managing collections and payments
| | - | ------------------------------------------------------------------------------------------------------------

| | · | Reduce capital expenditure other than committed
| | - | -----------------------------------------------

| | · | Cost optimization initiatives such as automation, optimal
capacity utilisation, optimising sub-contractor and travel costs, deferring employee compensation revisions and promotions and
delay in hiring new employees
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There are numerous risks and challenges
affecting the business. These risks and challenges are discussed in detail in the section entitled 'Risk Factors' and elsewhere
in this Annual Report.



Adoption of IFRS 16



Effective April 1,
2019, the Group adopted IFRS 16 “Leases” and applied the standard to all lease contracts existing on April 1, 2019
using the modified retrospective method. Consequently, the group recorded the lease liability at the present value of the lease
payments discounted at the incremental borrowing rate and the right of use asset at an amount equal to the lease liability adjusted
by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet immediately before
the date of Initial application. Comparatives as at and for the year ended March 31, 2019 have not been retrospectively adjusted
and therefore will continue to be reported under the accounting policies included as part of our Annual Report for year ended March
31, 2019



On transition, the adoption of the new
standard resulted in recognition of “Right of Use” asset of ₹3,997 Million, and a lease liability of ₹1,787
Million. The effect of this adoption is insignificant on the operating profit, net profit for the period and earnings per share.
IFRS 116 will result in an increase in cash inflows from operating activities and an increase in cash outflows from financing activities
on account of lease payments. Additional disclosures on IFRS 16 is given in Note 7 of financial statements



Revenues



Network Services



These
primarily include revenue from connectivity services, NLD/ILD services and to a lesser extent, revenues from the installation of
the connectivity link. In certain cases, these elements are sold as a package consisting of all or some of the elements. We sell
hardware and software purchased from third party vendors to our high value corporate clients. Our connectivity services include
IPVPN services, Internet connectivity and last mile connectivity (predominantly through wireless). We provide these services for
a fixed period of time at a fixed rate regardless of usage, with the rate for the services determined based on the type of service
and capacity provided, scope of the engagement and the Service Level Agreement, or SLA. We provide NLD (National Long Distance)
and ILD (International Long Distance) services and carry voice traffic for Inter-connect Operators. Revenue is recognized based
upon metered call units of voice traffic terminated on our network. The company offers services in the retail voice market in partnership
with Skype Communications, S.a.r.l. The company realized revenue from the sale of voice credits and subscriptions of Skype.



45







Data Center
services



Revenue
from Data Center services includes revenue from co-location of space and racks on usage of power from large contracts. The contracts
are mainly fixed rate for a period of time based on the space or the racks used, and usage revenue is based on consumption of power
on large contracts.



Cloud and Managed
Services



Revenue
from Cloud and Managed services are primarily from “Cloud and on demand storage”, “Domestic managed services
and “International managed services”. Contracts from Cloud and on demand storage, are primarily fixed and for a period
of time. Revenues from Domestic and International managed services comprise of value-added services, operations and maintenance
of projects and from remote infrastructure management. Contracts from this segment are fixed and could also be based on T&M.



Technology
Integration Service (TIS)



Revenues
from TIS comprises of DC build services and Security services. Contracts under TIS are based on completion of projects and could
also be based on T & M.



Applications
Integration Services



Revenue
from Applications Integration Services (Apps SI) comprises of Online Assessment, Web development, supply chain solutions, content
management, sale of Digital certificates and sale, implementation and maintenance of Industry Specific applications like SAP, Oracle
and Microsoft. Contracts are primarily fixed in nature for a period of time and also could be based on T & M.



Expenses



Cost of goods
sold and services rendered



Network Services



Cost
of goods sold and services rendered for the corporate network/data services division consists of telecommunications costs necessary
to provide services and cost of goods in respect of communication hardware and security services sold, commission paid to franchisees
and cable television operators, the cost of voice termination for voice and VoIP services and other direct costs. Telecommunications
costs include the costs of international bandwidth procured from TELCOs and are required for access to the Internet, providing
leased lines to our points of presence, the costs of using third-party networks pursuant to service agreements, leased line costs
and costs towards spectrum fees payable to the Wireless Planning Commission or WPC for provision of spectrum to enable connectivity
to be provided on the wireless mode for the last mile. Other costs include cost incurred towards annual maintenance contract and
the cost of installation in connectivity business. In addition, the Government of India levies an annual license fee of 8% of the
adjusted gross revenue generated from IP-VPN services and Voice services under the Unified license.



Data Center
Services



Cost
of goods sold and services rendered for the Data Center services consists of cost of electrical power consumed, cost of rental
servers offered to customers and cost of licenses used to provide services.



Cloud and Managed
Services



Cost
of goods sold and services rendered for the Cloud and Managed services consists of cost of licenses in providing services, cost
of billable resources in case of Infrastructure Managed services, third party professionals engaged in providing services, associate
costs of the delivery teams and cost of operations of DC build BOT projects.



Technology
Integration Services



Cost
of goods sold and services rendered consists of cost of hardware and software supplied for DC build projects, cost of security
hardware and software supplied and cost of hardware and software procured for System integration projects.



46







Applications
Integration Services



Cost
of goods sold and services rendered consists of professional charges payable to domain specialists and subject matter experts,
cost of billable associates of e-learning business, cost of operating in third party facility for online assessment including invigilator
costs and cost of procuring and managing content for the websites, cost of digital certificates and platform usage and other direct
costs for the revenue streams.



Selling, general and administrative
expenses



Selling, general and
administrative expenses consists of salaries and commissions for sales and marketing personnel, salaries and related costs for
executive, financial and administrative personnel, advertising and other brand building costs, travel costs, and occupancy and
overhead costs.



Depreciation and amortization



We depreciate our tangible
assets on a straight-line basis over the useful life of assets, ranging from three to eight years and, in the case of buildings,
28 years. Undersea cable capacity is amortised over a period of 12 years and other intangible assets with finite lives are amortised
over three to five years.



Impairment



The carrying amounts
of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount
is estimated. For goodwill, the recoverable amount is estimated each year at December 31.



The recoverable amount
of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets
that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing
use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).
The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that
are expected to benefit from the synergies of the combination. Corporate assets for the purpose of impairment testing are allocated
to the cash generating units on a reasonable and consistent basis.



An impairment loss
is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment
losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in
the unit or group of units on a pro rata basis.



Inventories



Inventories comprising
traded hardware and software are measured at the lower of cost (determined using first-in first-out principle) and net realizable
value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.



Deferred tax



Deferred tax is recognized
using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences:
the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting
nor taxable profit or loss, and differences relating to investments in subsidiaries and associates to the extent that it is probable
that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences
arising on the initial recognition of goodwill, as the same is not deductible for tax purposes. Deferred tax is measured at the
tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted
or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.



47







Deferred tax arising
on investments in subsidiaries and associates is recognized except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax arising on
the temporary differences arising out of undistributed earnings of the equity method accounted investee is recorded based on the
management's intention. If the intention is to realize the undistributed earnings through sale, deferred tax is measured at the
capital gains tax rates that are expected to be applied to temporary differences when they reverse. However, when the intention
is to realize the undistributed earnings through dividend, the Group’s share of the income and expenses of the equity method
accounted investee is recorded in the statement of income, after considering any taxes on dividend payable by the equity method
accounted investee and no deferred tax is set up in the Group's books as the tax liability is not with the group.



Stock compensation expense



A total of 25 million
equity shares are reserved for issuance under our Associate Stock Option Plans (ASOPs). Our ASOP 2014 was adopted at the Eighteenth
Annual General Meeting held on July 28, 2014. As of March 31, 2020, we had an aggregate outstanding of 11.06 million options under
our ASOP with a weighted average exercise price equal to approximately ₹ 70.90 ($0.94) per equity share. Unamortized stock
compensation expense as of March 31, 2020 on these options is ₹ 78.15 million ($ 1.04 million).



Results of Operations



The following table sets forth certain financial
information as a percentage of revenues:



|                                              |  | Fiscal |       
|--------------------------------------------- |  | ------ | ------
|                                              |  | 2020   |       
|                                              |  |        | %     
|Revenues                                      |  |        | 100   
|Cost of goods sold and services rendered      |  |        | (62.59
|Other income/(expense)                        |  |        | 0.42  
|Selling, general  and administrative expenses |  |        | (19.67
|Depreciation and amortization expenses        |  |        | (9.98 
|Profit from operating activities              |  |        | 8.18  
|Finance income                                |  |        | 0.84  
|Finance expenses                              |  |        | (4.59 
|Net finance income/(Expenses)                 |  |        | (3.75 
|Profit before tax                             |  |        | 4.43  
|Income tax (expense)/ benefit                 |  |        | (1.37 
|Net profit for the year                       |  |        | 3.06  



Results of year ended March 31, 2020
compared to year ended March 31, 2019



The growth in our revenues in fiscal 2020
from fiscal 2019 is given below:



|         |  | 2019 – 20 |        |  | 2018 – 19 |  |        | Increase/ (decrease) |  |  | % Change | 
|-------- |  | --------- | ------ |  | --------- |  | ------ | -------------------- |  |  | -------- | 
|         |  |           |        |  |           |  |        |                      |  |  |          | 
|Revenues |  |           | 22,952 |  |           |  | 21,547 |                      |  |  | 1,405    | 



Year 2019-20 had a 7% growth with an increase
in revenues of ₹ 1,405 million ($18.64 million) contributed largely by Network services with a revenue growth of ₹
1,076 million ($14.27 million), Data Center Services with ₹679 million ($9.00 million), Cloud and Managed Services with ₹120
million ($1.59 million). The increase is offset by decrease in revenue from Technology Integration services by ₹449 million
($5.95 million) and Application Integration Services by ₹21 million ($0.27 million).



48







The revenue by operating segments is as
follows:



|                                  |  | Revenue |        |  | Percentage of revenue |  |        | Growth % | 
|--------------------------------- |  | ------- | ------ |  | --------------------- |  | ------ | -------- | 
|                                  |  | 2019-20 |        |  | 2018-19               |  |        | 2019-20  | 
|Network services                  |  |         | 12,677 |  |                       |  | 11,601 |          | 
|Data Center Services              |  |         | 3,824  |  |                       |  | 3,145  |          | 
|Cloud and Managed Services        |  |         | 1,594  |  |                       |  | 1,474  |          | 
|Technology Integration Services   |  |         | 3,038  |  |                       |  | 3,487  |          | 
|Applications Integration Services |  |         | 1,819  |  |                       |  | 1,840  |          | 
|Total                             |  |         | 22,952 |  |                       |  | 21,547 |          | 



Revenue from Network Service increased
by ₹1,076 million ($14.27 million) primarily due to (i) an increase in revenue of ₹960 million ($12.73 million) from
Connectivity Services, contributed by net increase in number of links by 2,394 with existing and new customer engagements, and
(ii) an increase in revenue of ₹116 million ($1.54 million) in Voice Services, which is on account of an increase by ₹621
million ($8.24 million) from Hubbing services, and partially offset by decrease of ₹461 million ($6.12 million) from ILD
business, decrease of ₹6 million ($0.08 million) from VoIP services, and decrease of ₹38 million ($0.50 million) from
Voice Retail services



Revenue from Data Center Services increased
by ₹679 million ($9.00 million) due to an increase of new contracts and capacities sold.



Revenue from Cloud and Managed Services
has increased by ₹120 million ($1.59 million), primarily on account of an increase in revenue of ₹213 million ($2.83
million) from Domestic Managed Services, which is partially offset by a decrease in revenue by ₹82 million ($1.09 million)
from Cloud offerings and decrease in revenue by ₹11 million ($0.14 million) from Infrastructure Managed Services.



Revenue from Technology Integration Services
has decreased by ₹449 million ($5.96 million), on account of an increase in revenue from Integration Services by ₹
98 Million ($1.30 Million), which is offset by a decrease in revenue from Security Services by ₹ 547 Million ($7.26 Million)
due to completion of a major customer specific Project last year.



Revenue from Applications Integration Services
has decreased by ₹ 21 Million ($0.28 Million), represented by (i) an increase in revenue from application services by ₹
79 Million ($ 1.04 Million) due to execution of new online examination projects, (ii) an increase in revenue from Forum business
by ₹ 25 Million ($ 0.33 Million), (iii) an increase in revenue from e Learning services by ₹ 29 Million ($ 0.39 Million)
and (iv) an increase in revenue from Sale of licenses by ₹82 Million ($1.09 Million). These increases in revenue is offset
by (i) a decrease in revenue from web services by ₹40 Million ($0.53 Million), (ii) a decrease in revenue from digital certification
services by ₹190 Million ($2.52 Million) and (iii) a decrease in revenue from Online Content business by ₹6 Million
($0.08 Million) .



Other income



The change in other income is as follows:



|             |  | 2019 -20 |    |  | 2018 -19 |  |     | Increase/ (decrease) |  |  | % Change |  
|------------ |  | -------- | -- |  | -------- |  | --- | -------------------- |  |  | -------- | -
|Other income |  |          | 97 |  |          |  | 217 |                      |  |  | (120     | )



Other income has decreased by ₹ 120
million ($1.59 Million). The decrease is primarily on account of decrease in rental income by ₹ 75 million ($1 Million) and
decrease in other miscellaneous income during the period by ₹ 89 million ($1.18 Million). The above decrease has been partially
offset by the increase due to write back of advances/deposits no longer payable by ₹ 44 million ($0.96 Million) compared
to the same period in the previous year.



Cost of goods sold and services rendered
(COGS)



Our cost of goods sold and services rendered
in each of the business segment is set forth in the following table:



|                                  |  | 2019-20 |        |  | 2018-19 |  |        | Increase/ (decrease) |  |  | % change |  
|--------------------------------- |  | ------- | ------ |  | ------- |  | ------ | -------------------- |  |  | -------- | -
|Network services                  |  |         | 8,047  |  |         |  | 7,269  |                      |  |  | 778      |  
|Data Center Services              |  |         | 1,675  |  |         |  | 1,399  |                      |  |  | 276      |  
|Cloud and Managed Services        |  |         | 828    |  |         |  | 677    |                      |  |  | 151      |  
|Technology Integration Services   |  |         | 2,575  |  |         |  | 2,937  |                      |  |  | (362     | )
|Applications Integration Services |  |         | 1,239  |  |         |  | 1,320  |                      |  |  | (81      | )
|Total                             |  |         | 14,364 |  |         |  | 13,602 |                      |  |  | 762      |  



49







The cost of goods sold has increased by
6% on an overall basis and the movement in COGS by nature of expense is explained in detail below:



|                                        |  | 2019-20 |        |  | 2018-19 |  |        | Increase/ (decrease) |  |  | % change |  
|--------------------------------------- |  | ------- | ------ |  | ------- |  | ------ | -------------------- |  |  | -------- | -
|Network Costs                           |  |         | 6,486  |  |         |  | 5,790  |                      |  |  | 696      |  
|License fees (revenue share)            |  |         | 694    |  |         |  | 659    |                      |  |  | 35       |  
|Cost of goods sold                      |  |         | 2,908  |  |         |  | 3,348  |                      |  |  | (440     | )
|-  	Sale of products (part of COGS)     |  |         | 2,017  |  |         |  | 2,119  |                      |  |  | (102     | )
|-	  Integration services (part of COGS) |  |         | 891    |  |         |  | 1,229  |                      |  |  | (338     | )
|Direct Resources costs                  |  |         | 1,596  |  |         |  | 1,370  |                      |  |  | 226      |  
|Power costs                             |  |         | 1,595  |  |         |  | 1,359  |                      |  |  | 236      |  
|Other direct costs                      |  |         | 1,085  |  |         |  | 1,076  |                      |  |  | 9        |  
|Total                                   |  |         | 14,364 |  |         |  | 13,602 |                      |  |  | 762      |  



Network costs comprises cost of Bandwidth
leased out from TELCOS, Inter connect charges and IP termination costs payable to carriers. Increase in Network costs of ₹696
million ($9.22 million) is due to (i) ₹370 million ($4.91 million) increase in Bandwidth costs incurred on account of capacity
upgrades and newer links and (ii) increase of ₹326 million ($4.31 million) of Inter connect charges.



License fees (Revenue share) cost comprises
revenue share payable to DOT on licensed services. The increase in revenue share of ₹35 million ($0.46 million) is on account
of an increase in licensed Revenues.



Cost of Goods sold consists of cost of
Hardware and Software and integration services. Cost of Goods sold decreased by ₹440 million ($5.83 million). The same being
on account of (i) decrease in Integration services by ₹338 million ($4.48 million), (ii) decrease in token and licenses Costs
by ₹93 million ($1.23 million), (iii)decrease in hardware costs in Technology Integration business by ₹41 million ($0.54
million) and these are partially offset by (iii) increase in Cost of Hardware and Software in Data Center Services by ₹9
million ($0.12 million), (iv) increase in Cost of Hardware and Software in Managed Services by ₹11 million ($0.14 million)
and (v) increase in Cost of Hardware and Software in Network related Services by ₹12 million ($0.16 million).



Direct Resource
costs include the cost of resources deployed on the Network Infrastructure Delivery (Part of Network service), and resources
involved in delivery of applications integration services, cost of billable resources of e Learning (Part of Applications
Integration services) and Infrastructure Managed services (Part of Cloud and Managed Services). Increase in resources costs
of ₹ 226 million ($3.01 million) is primarily on account of increases of (i) ₹118 million ($1.57 million) in
delivery Network services, (ii) ₹16 million ($0.22 million) by Technology Integration Services, (iii) ₹11 million
($0.15 million) by DC Services resulting from an increase in number of employees, (iv) Applications Integration Services by
₹67 million ($0.89 million) and (v) Managed Services Delivery (Part of Cloud and Managed services) by ₹14 million
($0.18 million).



Power cost include electricity charges
incurred for our Data Center operations. Power cost increased by ₹236 million ($3.13 million) due to increase in occupancy
of Rabale DC and also increase in consumption in existing Data Centers and increased power tariff.



Other direct cost include Link implementation
and maintenance charges pertaining to Network services, direct cost of Applications Integration services business containing Online
Exams, digital certificate platform, content costs and subject matter experts for international businesses. There is a marginal
increase in other direct costs by ₹9 million ($0.11 million) is primarily on account of (i) increase by ₹128 million
($1.69 million) on account of operating costs of cloud and managed services, (ii) increase by ₹19 million ($0.25 million)
on account of Data Center Services and these increases are partially offset by decrease of (iii) ₹56 million ($0.74 million)
in applications integrations services, (iv) decrease of ₹82 million ($1.09 million) in link maintenance charges.





50







Selling, General and Administrative
expenses



Selling, General and Administrative expenses
of the Company by nature of expenses are set forth as follows:



|                                            |  | 2019-20 |       |  | 2018-19 |  |       | Increase/ (decrease) |  |  | % change |  
|------------------------------------------- |  | ------- | ----- |  | ------- |  | ----- | -------------------- |  |  | -------- | -
|Operating costs                             |  |         | 1,010 |  |         |  | 1,264 |                      |  |  | (254     | )
|Selling and Marketing Expenses              |  |         | 115   |  |         |  | 154   |                      |  |  | (39      | )
|Associate Expenses                          |  |         | 1,962 |  |         |  | 1,937 |                      |  |  | 25       |  
|Other Indirect expenses                     |  |         | 944   |  |         |  | 924   |                      |  |  | 20       |  
|Allowance for doubtful receivables/advances |  |         | 480   |  |         |  | 544   |                      |  |  | (64      | )
|Forex (gain) / Loss                         |  |         | 3     |  |         |  | 52    |                      |  |  | (49      | )
|Total                                       |  |         | 4,514 |  |         |  | 4,875 |                      |  |  | (361     | )



Operating costs includes rental, repairs
and maintenance charges of our network operating centers, base stations and other co-location sites including the rent and maintenance
for our Data Centers. Operating costs decreased by ₹254 million ($3.37 million) primarily on account of decrease in repairs
and maintenance and network operating cost.



Selling and Marketing expenses consist
of, selling commission payable to sales partners, incentive to salesmen and, marketing and promotion costs. The Selling and Marketing
expenses decreased by ₹39 million ($0.51 million).



Associate expenses consist of cost of the
employees who are part of the Sales and marketing, Business development, General management and support services. Associate expenses
increased by ₹25 million ($0.34 million) between two periods due to increase in headcounts and regular Increments.



Other indirect expense consists of, rental
and electricity cost of office, travel cost, legal charges, professional charges, communication and others. During the year Other
Indirect costs have increased by ₹20 million ($0.26 million).



Allowance for doubtful receivables/advances
consists of the charge on account of the provisions created during the year against doubtful receivables/advances. Allowance for
doubtful receivables/advances decreased by ₹64 million ($0.85 million) on account of prudent provisioning of debtors.



Forex(gain)/Loss incurred is ₹ 3
million ($0.04 million), which is due to the forex rate fluctuation compared to the previous year.



Depreciation and amortization



Depreciation and amortization is set forth
in the table below:



|                                  |  | 2019 -20 |       |   | 2018 -19 |  |       | Increase/ (Decrease) |  |  | % Change | 
|--------------------------------- |  | -------- | ----- | - | -------- |  | ----- | -------------------- |  |  | -------- | 
|Depreciation and amortization     |  |          | 2,291 |   |          |  | 1,534 |                      |  |  | 757      | 
|As a percentage of carrying value |  |          | 14.01 | % |          |  | 16.65 | %                    |  |  |          | 



The Depreciation and amortization expenses
has been increased by ₹ 757 million ($10.04 million), the increase is primarily on account of implementation of IFRS 16 Leases
by ₹ 469 million ($6.22 million) and the remaining increase is on account of capitalization of new assets during the year.



Profit from operating activities



|                           |  | 2019 -20 |       |   | 2018 -19 |  |       | Increase/ (Decrease) |  |  | % Change | 
|-------------------------- |  | -------- | ----- | - | -------- |  | ----- | -------------------- |  |  | -------- | 
|Operating profit           |  |          | 1,880 |   |          |  | 1,753 |                      |  |  | 127      | 
|As a percentage of revenue |  |          | 8.19  | % |          |  | 8.14  | %                    |  |  |          | 



Operating profit as a % has increased over
the previous year same quarter due to higher utilization of assets and mix of revenue.



Finance income / (expense)



|                               |  | 2019 -20 |        |   | 2018 -19 |  |      | Increase/ (Decrease) |  |  | % Change |  
|------------------------------ |  | -------- | ------ | - | -------- |  | ---- | -------------------- |  |  | -------- | -
|Finance income                 |  |          | 193    |   |          |  | 46   |                      |  |  | 147      |  
|Finance expense                |  |          | (1,054 | ) |          |  | (728 | )                    |  |  | (326     | )
|Net finance income / (expense) |  |          | (861   | ) |          |  | (682 | )                    |  |  | (179     | )



51







Finance income: The finance income
primarily consists of interest received from bank deposits of ₹32 million ($4.26 million), and interest income on others
of ₹162 million ($21.46 million). The interest received from bank increased by ₹6 million ($0.08 million) from last
year, and interest income on others increased by ₹141 million ($1.87 million) on account of interest on income tax refund
received during current year ₹ 146 Million ($1.94 Million). The above increase was partially offset by decrease in other
interest by ₹ 5 Million ($0.07 Million)



Finance expense:The finance expenses
is increased by ₹ 326 Million ($4.32 Million), the increase is primarily on account of implementation of IFRS 16 Leases by
₹ 172 Million ($2.28 Million), also on account increase in interest expenses on borrowings by ₹ 133 Million ($1.76
Million) due to increased borrowings demanded in increased in business operations. The above increase is also attributable to the
increase in other borrowing costs by ₹ 21 Million ($0.28 Million) paid in respect of utilization of non-fund facilities from
the banks and other processing charges.



The increase in finance expense is on account
of increase in borrowings taken mainly to fund upcoming Data Centers in Rabale and Hyderabad and other working capital arrangements.



Net Profit



|                           |  | 2019 -20 |      |   | 2018-19 |  |      | Increase/ (Decrease) |  |  | % Change |  
|-------------------------- |  | -------- | ---- | - | ------- |  | ---- | -------------------- |  |  | -------- | -
|Net Profit                 |  |          | 705  |   |         |  | 1069 |                      |  |  | (364     | )
|As a percentage of revenue |  |          | 3.07 | % |         |  | 4.96 | %                    |  |  |          |  



Net profit as a % of revenue has decreased over the previous
year primarily on account of tax expenses of ₹ 314 Million ($4.17 Million) (previous year - ₹ 2.61 Million ($0.03 Million)
after set-off of carried forward losses till 2018-19).



Results of year ended March 31, 2019
compared to year ended March 31, 2018



Refer to the section ‘Results of
year ended March 31, 2019 compared to year ended March 31, 2018 ’ under ‘Management's Discussion and Analysis of Financial
Condition and Results of Operations’ of Item 5 in our Annual Report on Form 20-F for fiscal 2019, filed with the U.S. Securities
and Exchange Commission on June 20, 2019, for analysis of our results for fiscal 2019 in comparison with fiscal 2018.



Foreign Exchange Fluctuations and Forwards



We enter into foreign exchange derivative
contracts to mitigate the risk of changes in foreign exchange rates on cash flows denominated in U.S. dollars. We enter into forward
contracts where the counter party is a bank. Forward contracts generally mature between one to six months. These contracts do not
qualify for hedge accounting under IFRS. These contracts are marked to market as at the balance sheet date and recognized in the
consolidated income statement.



Liquidity and capital resources



We have financed our operations largely
through cash generated from operations, equity issuance and bank borrowings. Our liquidity requirements are for meeting working
capital needs and capital expenditures required to upgrade and maintain our existing infrastructure.



The following table summarizes our cash
flows for periods presented:



|                                                             |  | 2020         |        |   | 2019         |  |        | 2018         |  |  | 2020            |  
|------------------------------------------------------------ |  | ------------ | ------ | - | ------------ |  | ------ | ------------ |  |  | --------------- | -
|                                                             |  | ₹ In million |        |   | ₹ In million |  |        | ₹ In million |  |  | US $ in million |  
|Net cash from / (used in) operating activities               |  |              | 5043   |   |              |  | 1,441  |              |  |  | 2,121           |  
|Net cash from / (used in) investing activities               |  |              | (4,326 | ) |              |  | (3,974 | )            |  |  | (1,794          | )
|Net cash from / (used in) financing activities               |  |              | 4      |   |              |  | 3,054  |              |  |  | (1,048          | )
|Effect of exchange rate changes on cash and cash equivalents |  |              | 0      |   |              |  | 6      |              |  |  | (5              | )
|Net increase / (decrease) in cash and cash equivalents       |  |              | 720    |   |              |  | 522    |              |  |  | (722            | )



52







As of March 31, 2020, 2019 and 2018 we
had working capital of ₹ 1,426 million, ₹ 2,671 million, ₹ 1,851 million which includes cash and cash equivalents
of ₹ 1,415 million, ₹ 695 million and ₹ 167 million. Our working capital net of cash and cash equivalents is
₹1,273 (negative) million, ₹1,976 million and ₹1,684 million (negative) as of March 31, 2020, 2019 and 2018.
We believe that cash from operations and existing lines of credit is well managed and we have sufficient resources to meet our
liquidity requirements.



Our short-term borrowings to finance working
capital requirements are primarily financed by cash credit facilities with banks. Borrowings for capital expenditures are financed
through capital leases and long-term loans. We have foreign currency term loans, which carry lower interest rates compared to loans
in Indian currency but are subject to exchange fluctuations, due to which there could be an adverse impact on cash outflows.



On October 22, 2010, the company entered
into a subscription agreement with Mr. Ananda Raju Vegesna, acting as representative (the “Representative”) of the
purchasers in connection with the offering. Pursuant to the terms of this subscription agreement, the company issued and allotted
125,000,000 equity shares to an entity affiliated and controlled by Mr. Raju Vegesna, our CEO, Chairman and Managing Director.
In accordance with Indian law, the purchase price is to be paid at such time as determined by Board of Directors of the company.
During the fiscal year 2019, 2017 and 2014, the Company has received an aggregate of ₹900 million, ₹300 million and
₹300 million each year respectively, in connection with this private placement, resulting in an aggregate of ₹ 4,000
million received till date. During the year all 125,000,000 shares were fully paid. As of the date of this Report, Mr. Vegesna
has paid for 100% of the shares of the subscription. See note 36 in the notes to the financial statements included in this
Annual Report.



We have borrowings of ₹ 11,171 million (including Lease
Liability on account of implementation of IFRS 16 “Leases” to the extent of ₹ 1,721 million) as of March 31,
2020 out of which ₹ 6,573 million will be repaid within a period of 12 months. Interest outflow on existing borrowings for
next year is expected to be ₹ 518 million. We have utilized working capital facility of ₹ 3,186 million out of limit
of ₹ 3,200 million during fiscal 2020. We have unutilized non fund limit of ₹ 1,232 million as of March 31, 2020.



Our ongoing working capital requirements
are significantly affected by the profitability of our operations and we continue to periodically evaluate existing and new sources
of liquidity and financing. We are taking steps to improve the cash position to meet our currently known requirements at least
over the next twelve months. In light of the highly dynamic nature of our business, however, we cannot assure you that our capital
requirements and sources will not change significantly in the future.



Cash and cash equivalents:



Cash and cash equivalents
comprise of ₹ 2,102 million, ₹ 1,801 million, ₹ 1,875, million in bank accounts and ₹ 548 million, ₹
446 million, ₹ 413 million in the form of bank deposits as on March 31, 2020, 2019, 2018 out of which cash deposits in the
form of margin money is restricted for use by us amounting to ₹ 333 million, ₹ 313 million, ₹ 296 million. Balances
in foreign currency amount to ₹ 249 million, ₹ 195 million and ₹ 249 million as of March 31, 2020, 2019 and 2018.



Net cash generated from operating activities for the year ended
March 31, 2020 was ₹ 5,043 million ($ 66.89 million). This is mainly attributable to cash generated during the year before
changes in working capital of ₹ 4,759 million ($ 63.13 million) which is primarily on account of implementations of IFRS
16 “Leases” in which amounts earlier considered as rental expenses has now been regrouped to Depreciation expenses,
due to which, cash flow from operating activities has increased significantly, and increases in trade and other payables by ₹235
million ($ 3.1 million), in employee benefits ₹ 18 million ($ 0.24 million) and in contract liabilities by ₹140 million
($ 1.86 million) on account of increase in advance billing in long term projects and adoption of IFRS 15, and partially offset
by increase in inventories by ₹ 413 million ($ 5.48 million) and increase in trade and other receivables by ₹ 289 million
($ 3.84 million), increase in other assets by ₹ 561 million ($ 7.42 million), increase in Contract assets by ₹ 18 million
($ 0.23 million) and increase in contract costs ₹ 11 million ($ 0.15 million)



Net cash generated
from operating activities for the year ended March 31, 2019 was ₹ 1,441 million ($ 20.83 million). This is mainly attributable
to cash generated during the year before changes in working capital of ₹ 3,907 million ($ 56.49 million), and increases in
trade and other payables by ₹1,204 million ($ 17.41 million), in employee benefits ₹ 26.43 million ($ 0.38 million)
and in contract liabilities by ₹261 million ($ 3.78 million) on account of increase in advance billing in long term projects
and adoption of IFRS 15, and partially offset by increase in inventories by ₹ 1069 million ($ 15.46 million) and increase
in trade and other receivables by ₹ 2,183 million ($ 31.55 million), increase in other assets by ₹ 158 million ($ 2.29
million), increase in Contract assets by ₹ 23.92 million ($ 0.35 million) and decrease in contract costs ₹ 4.31 million
($ 0.06 million)



53







Net cash generated
from operating activities for the year ended March 31, 2018 was ₹ 2,121 million ($ 32.61 million). This is mainly attributable
to cash generated during the year before changes in working capital ₹ 3,440 million ($ 52.89 million), increase in trade
and other payables by ₹605 million ($ 9.30 million), increase in employee benefits ₹29 million ($ 0.45 million) and
increase in deferred revenue by ₹297 million ($ 4.56 million) on account of increase in advance billing in long term projects,
decrease in inventories by ₹ 536 million ($ 8.24 million) and partially offset by increase in trade and other receivables
by ₹ 2,221 million ($ 34.14 million), increase in other assets by ₹ 519 million ($ 7.98 million).



Net cash used in investing activities for the year ended March
31, 2020 was ₹ 4,326 million ($ 57.39 million) primarily on account of additional expenditure on Data Center, upgradation
of network backbone and also on account of implementation of IFRS 16 “Leases”.



Net cash used in investing
activities for the year ended March 31, 2019 was ₹ 3,974 million ($ 57.45 million) primarily on account of additional expenditure
on Data Center, upgradation of network backbone and investment in corporate debt securities.



Net cash used in investing
activities for the year ended March 31, 2018 was ₹ 1,794 million ($ 27.58 million) primarily on account of additional expenditure
on Data Center, upgradation of network backbone and investment in corporate debt securities.



Net cash generated
from financing activities for fiscal year 2020 was ₹ 4 million ($ 0.1 million). The increase is mainly due to borrowings
amounting ₹1,411 million ($ 18.72 million) and proceeds from issue of shares including share premium under ESOP ₹5
million ($ 0.07 million) received during the year. The increase was significantly offset due to implementation of IFRS 16 “Leases”
by ₹220 million ($ 2.91 million) considered repayment of lease liabilities and finance expenses amounting to ₹1,047
million ($ 13.89 million). Also, dividends of ₹224 million ($ 2.97 million) were paid during the year.



Net cash generated
from financing activities for fiscal year 2019 was ₹ 3,054 million ($ 44.16 million). The increase is mainly due to borrowings
amounting ₹3,134 million ($ 45.31 million) and proceeds from issue of shares including share premium under ESOP and receipt
of call money in the amount of ₹935 million ($ 13.52 million) received during the year. The increase was partially offset
due to repayment of lease liabilities of ₹89 million ($ 1.29 million) and finance expenses amounting to ₹708 million
($ 10.24 million). Also, dividends of ₹218 million ($ 3.15 million) were paid during the year.



Net cash used in
financing activities for fiscal year 2018 was ₹ 1,048 million ($ 16.11 million). The increase is mainly due to repayment
of lease liabilities of ₹403 million ($ 6.20 million) and finance expenses paid amounting to ₹491 million ($ 7.55 million).
Also, dividend of ₹209 million ($ 3.20 million) was paid during the year. The increase is partially offset by borrowings
amounting ₹43 million ($ 0.66 million) and proceeds from issue of shares including share premium under ESOP ₹12 million
($ 0.19 million) received during the year.



Capital expenditure



We incurred ₹
6,460 million (US$ 85.69 million) towards capital expenditure for the year ended March 31, 2020. We expect further capital expenditure
to be incurred during the fiscal year 2020 to strengthen our infrastructure capabilities. The capital expenditure was funded out
of internal accruals and bank borrowings. Also refer to section “Principal Capital Expenditures” under Item 4 for capital
commitments as on March 31, 2020.



Research and development



The Company does not
have research and development activities and has also not undertaken any sponsored research and development activities.



Trends



The information is
set forth under the caption ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’
- ‘Operating and Financial review and Prospects’.



54







Off-balance sheet arrangements



We have not entered
into any off-balance sheet arrangements as defined by SEC Final Rule 67 (FR-67), “Disclosure in Management’s Discussion
and Analysis about Off-Balance Sheet Arrangements and Aggregate Contractual Obligations”.



Contractual obligations



Set forth below are our contractual obligations
as of March 31, 2020:



|Payments due by period (₹ 000s)
|-------------------------------
|Contractual Obligations        
|Long Term Debt Obligations     
|Short Term Borrowings          
|Lease Liability                
|Purchase Obligations           
|Total                          



Recent Accounting Pronouncements



Amendment to IFRS
3 - Business combination



On October 22,
2018, the IASB issued amendments to IFRS 3, ‘Business Combinations’, in connection with clarification of business definition,
which help in determining whether an acquisition made is of a business or a group of assets. The amendment added a test that makes
it easier to conclude that a company has acquired a group of assets, rather than a business, if the value of the assets acquired
is substantially all concentrated in a single asset or a group of similar assets. These amendments are effective for annual reporting
periods beginning on or after January 1, 2020, with earlier application permitted. The adoption of amendment to IFRS 3 is
not expected to have any impact on the consolidated financial statements of the Company.



Amendment to IFRS
9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform



On September 26,
2019, the IASB amended some of its requirements for hedge accounting. The amendments provide relief from potential effects of the
uncertainty caused by the IBOR reform. In addition, the amendments require companies to provide additional information to investors
about their hedging relationships that are directly affected by these uncertainties. These amendments are effective for annual
reporting periods beginning on or after January 1, 2020, with earlier application permitted. The Company does not expect the
amendment to have any significant impact on its consolidated financial statements.



Amendment to IAS
1 and IAS 8 – Definition of Material



On October 30,
2018, the IASB issued Amendment to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors to update a new definition of material in IAS 1. The amendments clarify the definition
of “material” and how it should be applied by including in the definition guidance that until now has featured elsewhere
in IFRS Standards. The new definition clarifies that, information is considered material if omitting, misstating, or obscuring
such information, could reasonably be expected to influence the decisions that the primary users of general-purpose financial statements
make on the basis of those financial statements. The definition of material in IAS 8 has been replaced by a reference to the definition
of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of material
or refer to the term ‘material’ to ensure consistency. These amendments are effective prospectively for annual reporting
periods beginning on or after January 1, 2020, with earlier application permitted. The Company does not expect the amendment
to have any material impact on its evaluation of materiality in relation to its consolidated financial statements.



55







Amendment to IAS
1 – Presentation of Financial Statements



On January 23,
2020, the IASB has issued “Classification of liabilities as Current or Non-Current (Amendments to IAS 1)”
providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangement in place
at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies to determine
whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified
as current (due or potentially due to be settled within one year) or non-current. The amendments also clarified the classification
requirements for debt a company might settle by converting it into equity. These amendments are effective for annual reporting
periods beginning on or after January 1, 2022 and are to be applied retrospectively, with earlier application permitted. The
Company is currently evaluating the impact of amendment to IAS 1 on its consolidated financial statements.



Amendment to IAS
37 – Onerous Contracts – Cost of Fulfilling a Contract



On May 14,
2020, the IASB issued “Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37)”, amending the
standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
The amendment specifies that the “cost of fulfilling” a contract comprises the “costs that relate directly to
the contract”. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an
allocation of other costs that relate directly to fulfilling contracts. These amendments are effective for annual reporting periods
beginning on or after January 1, 2022, with earlier application is permitted. The Company is currently evaluating the impact
of amendment to IAS 37 on its consolidated financial statements.



Amendment to IFRS
16 – Leases



On May 15,
2020, the IASB issued amendments to IFRS 16, “Leases”, provide lessees with an exemption from assessing whether a Covid-19-related rent
concession is a lease modification. The amendments allowed the expedient to be applied to Covid-19-related rent concessions
to payments originally due on or before 30 June 2021 and also require disclosure of the amount recognized in profit or loss
to reflect changes in lease payments that arise from Covid-19-related rent concessions. The reporting period in which
a lessee first applies the amendment, it is not required to disclose certain quantitative information required under IAS 8. These
amendments are effective for periods beginning on or after June 1, 2020, with earlier application is permitted. The Company
is currently evaluating the impact of amendment to IFRS 16 on its consolidated financial statements.



Critical Accounting Policies



Our accounting policies
affecting our financial condition and results of operations are more fully described in Note 3 to our Consolidated Financial Statements
included in Item 18 of this Annual Report on Form 20-F. Certain of our accounting policies require the application of judgment
by management in selecting appropriate assumptions for calculating financial estimates, which inherently contain some degree of
uncertainty. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making judgments about the reported carrying values of assets
and liabilities and the reported amounts of revenues and expenses that may not be readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.



We believe the following
are the critical accounting policies and related judgments and estimates used in the preparation of the company’s Consolidated
Financial Statements. Management has discussed the application of these critical accounting estimates with our Board of Directors
and Audit Committee.



Revenue Recognition



The Group derives revenue from converged
ICT solutions comprised of Network-centric services*, Data Center-centric IT services which includes Data Center services, Cloud
and managed services, Technology integration services and Applications integration services.



The Group has adopted IFRS 15 Revenue from
Contracts with Customers with effect from April 1, 2018 by using the cumulative effect transition method and accordingly comparatives
have not been retrospectively adjusted. The effect on adoption of IFRS 15 on initial application of ₹ 3,821.5 Million has
been adjusted in the opening retained earnings.



The Group recognizes revenue when its customer
obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive
in exchange for those goods or services excluding the amount collected on behalf of third parties. Refer to note 3 (o) Significant
accounting policies in the 2018 Annual Report in Form 20F for the previous revenue recognition policies.



56







* The word telecom was largely understood as providing telecommunication
services to consumers and also mobility services. Since the company services were not relating to either consumer services or mobility
services and that company services were limited to enterprise data network, and services on the data network that spawns multiple
services around network, the said Telecom services will henceforth be referred for appropriate representation of the substance,
as Network services and all businesses dependent on the Network infrastructure will be collectively referred to as Network Centric
Services



The revenue recognition in respect of the
various streams of revenue is described below:



(i) Network Services:



Revenue from Network services includes
Data network services and Voice services. Network services primarily include revenue from connectivity services, NLD/ILD services
and to a lesser extent, revenues from the setup and installation of connectivity links. The group provides connectivity for a fixed
period of time at a fixed rate regardless of usage. Revenue from Network services are series of distinct services. The performance
obligations are satisfied overtime.

Service revenue is recognized when services
are provided, based upon period of time. The setup and installation of connectivity links are deferred and recognized over the
associated contract period.



Sale of equipment are accounted as separate
performance obligations if they are distinct and its related revenues are recognized at a point in time when the control is passed
on to the customer.



The Group provides NLD (National Long Distance)
and ILD (International Long Distance) services through Group’s network. The Group carries voice traffic, both national and
international, using the network back-bone and delivers voice traffic to Inter-connect Operators. Revenue is recognized when the
services are provided based upon the usage (eg: metered call units of voice traffic terminated on the Group’s network).



(ii) Data Center Services:



Revenue from DC services consists co-location
of racks and power charges. The contracts are mainly for a fixed rate for a period of time. Revenue from co-location of racks,
power charges and cross connect charges are series of distinct services. The performance obligations are satisfied overtime. Service
revenue is recognized as the related services are performed. Sale of equipment, such as servers, switches, networking equipment,
cable infrastructure and racks, are accounted as separate performance obligations if they are distinct and its related revenues
are recognized at a point in time when the control is passed on to the customer.



(iii) Cloud and Managed Services:



Revenue from Cloud and managed services
include revenue from Cloud and storage solutions, managed services, value added services, domestic and International managed services.



Revenues from Cloud and on demand compute
and storage, are primarily fixed for a period of time. Revenue from Cloud and managed services are series of distinct services.
The performance obligations are satisfied overtime. The group recognize service revenue as the related services are performed.



Revenues from domestic and international
managed services, comprise of value added services, operations and maintenance of projects and from remote infrastructure management.
Contracts from this segment are fixed and could also be based on time and material contracts.



In the case of time and material contracts,
the group recognizes service revenue as the related services are performed.



In the case of fixed price contract, the
group recognizes revenue over a period of time based on progress towards completion of performance obligation using efforts or
cost to cost measure of progress (percentage completion method of accounting).



The stage of completion is measured by
efforts spent to estimated total efforts over the term of the contract.



(iv) Technology Integration Services:



Revenue from Technology Integration Services
include system integration Services, revenue from construction of Data Centers, network services, security solutions and to a lesser
extent, revenue from sale of hardware and software. Revenue from construction contract includes revenue from construction of Data
Centers to the specific needs and design of the customer. The Group recognize revenue at point in time, when the customer does
not take control of work-in-progress or over a period of time when the customer controls the work-in-progress. In the case where
revenue is recognized over a period of time and progress is measured based on the costs incurred to date as a percentage of the
total estimated costs to fulfill the contract.



57







If the Group does not have a sufficient
basis to measure the progress of completion or to estimate the total contract revenues and costs, revenue is recognized only to
the extent of contract cost incurred for which recoverability is probable.



When total cost estimates exceed revenues
in an arrangement, the estimated losses are recognized in the statement of Income in the period in which such losses become probable
based on the current contract estimates.



(v) Applications Integration Services:



Revenue from Applications Integration services
include online assessment, document management services, web development, digital certificate based authentication services, supply
chain software and eLearning software development services. eLearning software development services consist of structuring of content,
developing modules, delivery and training users in the modules developed. Revenue from Applications Integration Services is recognized
over a period of time. The progress is measured based on the amount of time/effort spent on a project. Revenue in relation to ‘time’
is measured as the agreed rate per unit of time multiplied by the units of time expended. The element of revenue related to materials
is measured in accordance with the terms of the contract. The Group enters into contracts with customers to serve advertisements
in the portal and the Group is paid on the basis of impressions, click-throughs or leads and in each case the revenue is recognized
ratably over the period of the contract based upon the usage (i.e. on actual impressions/click throughs / leads delivered.)



Revenue from commissions earned on electronic
commerce transactions are recognized when the transactions are completed.



Digital Certification revenues include
income received on account of Web certification. Generally the Group does not hold after sale service commitments after the activation
of the Digital Certificates sold and accordingly, revenue is recognized fully on the date of activation of the respective certificate.



Multiple deliverable arrangements



In certain cases, some elements belonging
to the services mentioned above are sold as a package consisting of all or some of the elements.



The Group accounts for goods or services
of the package separately if they are distinct. i.e. if a good or service is separately identifiable from other promises in the
contract and if the customer can benefit from the good or service either on its own or together with other resources that are readily
available to the customer.



The Group allocates the transaction price
to each performance obligation identified in the contract on a relative stand-alone selling price basis. Standalone selling price
is the price at which group would sell a promised good or service separately to the customer.



If the relative stand-alone selling prices
are not available, the group estimates the same. In doing so, the group maximize the use of observable inputs and apply estimation
methods consistently in similar circumstances.



Contract Cost



Costs to fulfil customer contracts, i.e
the costs relating directly to a contract or to an anticipated contract that the Group can specifically identify or the costs generate/
enhance resources of the group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future
or the costs that are expected to be recovered are recognized as asset and amortized over the contract period.



Incremental costs of obtaining a contract
are recognized as assets and amortized over the contract period if entity expects to recover those costs. The Group recognizes
incremental cost of obtaining a contract as an expense when incurred if the amortisation period of the asset that the entity otherwise
would have recognized is one year or less.



Costs to obtain a contract that is incurred
regardless of whether the contract is obtained are recognized as an expense when incurred, unless those costs are explicitly chargeable
to the customer regardless of whether the contract is obtained.



Income from operating leases:



Lease rentals arising on assets given on operating
leases are recognized over the period of the lease term on a straight line basis.



58







Indefeasible Right of Use (IRU)



The Company has entered into IRU arrangements
through which it entitles its customers to right of use of specified bandwidth capacity for a specified period of time. The upfront
payment received towards right of use of bandwidth capacities under such agreements have been treated as deferred revenue and is
recognized on a straight line basis over the term of the arrangement.



Accounting Estimates



While preparing financial
statements we make estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities
at the date of financial statements and the reported amount of revenues and expenses for the reporting period.



Our estimate of liability
relating to pending litigation is based on currently available facts and our assessment of the probability of an unfavorable outcome.
Considering the uncertainties about the ultimate outcome and the amount of losses, we re-assess our estimates as additional information
becomes available. Such revisions in our estimates could materially impact our results of operations and our financial position.
Management believes that the estimates used in the preparation of the Consolidated Financial Statements are prudent and reasonable.
The actual results could differ from these estimates.



Business Combinations, Goodwill and Intangible
Assets



Business combinations
are accounted for using IFRS 3 (Revised), Business Combinations. IFRS 3 requires the identifiable intangible assets and contingent
consideration to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities
of the acquiree. Significant estimates are required to be made in determining the value of contingent consideration and intangible
assets. These valuations are conducted by independent valuation experts.



Business combinations
have been accounted for using the acquisition method under the provisions of IFRS 3 (Revised). The cost of acquisition is measured
at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition.
The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.



Transactions costs
that the group incurs in connection with a business combination such as finder’s fees, legal fees, due diligence fees, and
other professional and consulting fees are expensed as incurred.



We amortize intangible
assets on straight line basis over their respective individual estimated useful lives. Our estimates of the useful lives of identified
intangible assets are based on a number of factors including the effects of obsolescence, demand, competition, and other economic
factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required
to obtain the expected future cash flows from the asset.



Estimated Useful Lives of Property, Plant
and Equipment



In accordance with
IAS 16, Property, Plant and Equipment, we estimate the useful lives of plant and equipment in order to determine the amount
of depreciation expense to be recorded during any reporting period. If technological changes were to occur more rapidly than anticipated
or in a different form than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition
of increased depreciation expense in future periods. Likewise, if the anticipated technological or other changes occur more slowly
than expected, the useful lives could be extended. This could result in a reduction of depreciation expense in future periods.



Impairment

Financial assets



Trade receivables, contract assets, lease
receivables under IFRS 9, investments in debt instruments that are carried at amortised cost, investments in debt instruments that
are carried at FVTOCI are tested for impairment based on the expected credit losses for the respective financial asset.



Trade receivables



An impairment analysis is performed at
each reporting date. The expected credit losses over lifetime of the asset are estimated by adopting the simplified approach using
a provision matrix which is based on historical loss rates reflecting current condition and forecasts of future economic conditions.
In this approach assets are grouped on the basis of similar credit characteristics such as industry, customer segment and other
factors which are relevant to estimate the expected cash loss from these assets.



59







Other financial assets



Other financial assets are tested for impairment
based on significant change in credit risk since initial recognition and impairment is measured based on probability of default
over the lifetime when there is significant increase in credit risk.



Non-financial assets:



The carrying amounts
of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount
is estimated. For goodwill, the recoverable amount is estimated each year at 31 December.



The recoverable amount
of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets
that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing
use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).
The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that
are expected to benefit from the synergies of the combination. Corporate assets for the purpose of impairment testing are allocated
to the cash generating units on a reasonable and consistent basis.



An impairment loss
is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment
losses are recognized in profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in
the unit or group of units on a pro rata basis.



Reversal of impairment loss:



An impairment loss
in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed
at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortization, if no impairment loss had been recognized.



Income taxes:



Income
tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it
relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.



Current
tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting
date. Minimum Alternate Tax (MAT) is accounted as current tax when the company is subjected to such provisions of the Income Tax
Act.



Deferred
tax is recognized using the balance sheet method, providing for temporary differences between the carrying amount of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the
following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and associates
to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized
for taxable temporary differences arising on the initial recognition of goodwill, as the same is not deductible for tax purposes.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realized simultaneously. Credit of MAT paid is available
when the company is subjected to tax as per normal provisions in the future. Credit on account of MAT is recognized as a deferred
tax asset based on the management’s estimate of its recoverability in the future.



60







A
deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which
the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be realized.



Deferred
tax arising on investments in subsidiaries and associates is recognized except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred
tax arising on the temporary differences arising out of undistributed earnings of the equity method accounted investee is recorded
based on the management’s intention. If the intention is to realize the undistributed earnings through sale, deferred tax
is measured at the capital gains tax rates that are expected to be applied to temporary differences when they reverse. However,
when the intention is to realize the undistributed earnings through dividend, the Group’s share of the income and expenses
of the equity method accounted investee is recorded in the statement of income, after considering any taxes on dividend payable
by the equity method accounted investee.



Item 6. Directors,
Senior Management and Employees



Directors and Executive Officers



The following table
sets forth the name, age and position of each director and senior management of our Company as of March 31, 2020:



|Name                               |  | Age |  | Designation                                                
|---------------------------------- |  | --- |  | -----------------------------------------------------------
|Raju Vegesna (4)                   |  | 60  |  | CEO, Chairman & Managing Director                          
|Ananda Raju Vegesna (4)            |  | 60  |  | Executive Director                                         
|C B Mouli (1) (2) (5)              |  | 73  |  | Director, Chairman & Financial Expert of Audit Committee   
|                                   |  |     |  |                                                            
|T H Chowdary (2) (3) (5)           |  | 88  |  | Director & Chairman of Compensation & Nominating Committees
|Vegesna Bala Saraswathi            |  | 56  |  | Director                                                   
|C E S Azariah  (1) (2) (3) (4) (5) |  | 72  |  | Director                                                   
|Arun Seth (1)                      |  | 69  |  | Director                                                   
|Kamal Nath                         |  | 55  |  | Chief Executive Officer - Sify Technologies Limited, India 
|M P Vijay Kumar                    |  | 50  |  | Chief Financial Officer                                    
|C R Rao                            |  | 60  |  | Chief Operating Officer                                    



| | (1) | Member of the Audit Committee.
| | --- | ------------------------------



| | (2) | Member of the Compensation Committee.
| | --- | -------------------------------------



| | (3) | Member of the Nominating Committee.
| | --- | -----------------------------------



| | (4) | Member of the Corporate Social Responsibility Committee.
| | --- | --------------------------------------------------------



| | (5) | Member of Nomination and Remuneration Committee.
| | --- | ------------------------------------------------



Raju Vegesna, CEO,
Chairman and Managing Director, has served as a Director of our Company since November 2005. He was appointed as the Chief Executive
Officer and Managing Director of the Company effective July 18, 2006. Mr. Raju Vegesna is a Silicon Valley entrepreneur who founded
several leading edge technology companies, including Server Works Corporation, acquired by Broadcom in 2001. After that acquisition
he had a brief stint with Broadcom. He holds a BS in Electrical Engineering from the University of Bangalore and holds an MS in
Computer Engineering from Wayne State University, USA, and holds several patents in Microprocessor and Multiprocessor technology.
He is also a Director of Raju Vegesna Infotech & Industries Private Limited.



61







Ananda Raju Vegesna, brother of Mr. Raju Vegesna, CEO, Chairman
and Managing Director, has served as an Executive Director of our Company since June 2007. He is the Director of Infinity Satcom
Universal Private Limited, Raju Vegesna Infotech and Industries Limited, Ramanand Core Investment Company Private Limited.



C.B. Mouli has served
as a Director of our Company since July 2005. Mr. Mouli is a member of the Institute of Chartered Accountants of India and also
holds a Bachelor of Law Degree. Mr. Mouli, a partner of C.B. Mouli & Associates, a Chartered Accountants firm. He is a Director
of Ammana Equity Fund Private Limited.



T.H. Chowdary has served
as a Director of our Company since February 1996. Dr. Chowdary retired as the Chief Executive Officer of VSNL. He has held key
positions in the ITU, Intelsat and other international telecommunications organizations during the course of his career and was
involved in the establishment of the Center for Telecommunications Management Studies (CTMS) at Hyderabad. Dr. Chowdary is also
a director in Softsol India Limited and Tera Software Limited.



Ms. Vegesna Bala Saraswathi,
spouse of Mr. Raju Vegesna, CEO, Chairman and Managing Director, served as Director of our Company since July 2015. Ms. Vegesna
Bala Saraswathi is a Commerce Graduate, Associate Course Work in Computer Skills (US) and Associate Course Work in US Federal and
State Taxes (US).



C E S Azariah has served
as a Director of our Company since March 2013. Prior to joining the Company, he served as CEO of Fixed Income Money Market and
Derivatives Association of India (FIMMDA). He has vast experience of more than 35 years in different segments of operations in
State Bank of India and retired as Chief General Manager.



Arun Seth an alumni
of the prestigious La Martiniere school, Indian Institute of Technology, Kanpur and Indian Institute of Management, Calcutta, Mr.
Arun Seth is recognized as among the earliest Indian Telecom leaders. He has been a founding Charter Member of TiE Delhi and Indian
Angel Network and advises/mentors a number of start-ups in the tech space in India and USA. An active evangelist of the Software
product eco-system, he co-chairs the NASSCOM Product Conclave and the NASSCOM Product Council. He had earlier served on the Executive
Council of NASSCOM for 10+ years when in British Telecom and Alcatel.



Kamal Nath has served
as the Chief Executive Officer of Sify Technologies Limited, India, since August 2012. He is a Graduate in Electronics & Communications
from BIT, Sindri. He has an overall experience of close to three decades in reputed organizations. Prior to joining Sify, he was
with HCL Technologies Limited, a major IT company, responsible for the Infrastructure Services Division. He was with Larsen &
Toubro Limited and Uptron India Limited in the early part of his career. He is responsible for the business operations in India.



M P Vijay Kumar has
served as Chief Financial Officer since October 2007 and has over two decades of experience in corporate audits, financial/management
consulting, legal advisory services, management audit and investment banking. He is a Chartered Accountant and a Fellow Member
of the Institute of Chartered Accountants of India, Fellow Member of the Institute of Company Secretaries of India and Associate
member of the Institute of Cost and Works Accountants of India.



C R Rao, the Chief
Operating Officer, has served as Vice President - Head HR & Administration since March 2009. He is a Graduate in Commerce
and Law and also holds an MBA.  He comes with an overall experience of close to three decades in Strategic
Planning and Operations Management.  Prior to joining Sify, he was with GSA Lufthansa as Vice President, responsible
for Tamil Nadu and Andhra Pradesh.  His key responsibilities included Strategic Planning, Business Development, Sales and
Marketing for the Cargo division.



Infinity Capital Ventures,
LP beneficially owned 7.76 % of our equity shares as of March 31, 2020. This shareholder is a party to the Subscription Agreement
dated November 10, 2005 with our Company. The Subscription Agreement provides that, among other things, the Company shall appoint
Mr. Raju Vegesna as the Chairman of the Board of Directors, Infinity Capital shall also nominate another person to the Board of
Directors and so long as Infinity Capital continues to own at least 10% of the Company’s outstanding Equity Shares, the Company
shall not enter into any agreement pursuant to which it would provide a third party with registration rights for Company securities,
without the consent of Infinity Capital. In November 2005, Mr. Raju Vegesna, a nominee of Infinity Capital Ventures, LP, was appointed
as Chairman of our Board of Directors. In February 2006, the Company also appointed Mr. P S Raju as the second nominee of Infinity
Capital to the Board of Directors. Consequent to the resignation of Mr. P S Raju, as a Director effective May 31, 2015, Ms. Vegesna
Bala Saraswathi was appointed as an additional Director effective July 22, 2015 of our Company as a Nominee. Further, she was elected
by shareholders as a Director at the Annual General Meeting held on July 4, 2016. She got re-elected as a director in Annual General
Meeting held on July 6, 2017.



62







Infinity Satcom Universal
Private Limited beneficially owned 8.11% of our equity shares as of March 31, 2020. Mr. Ananda Raju Vegesna, Executive Director
of the Company and brother of Mr. Raju Vegesna, is the Director of Infinity Satcom. Infinity Satcom is presently controlled by
Mr. Raju Vegesna.



Director Compensation



Our Articles of Association
provide that each of our directors may receive a sitting fee not exceeding the maximum limits prescribed under the provisions of
the Indian Companies Act, 2013. Accordingly, our Directors, other than the Chairman and Managing Director and Executive Director,
have been receiving ₹ 20,000 for each committee meeting and ₹ 50,000 for each Board meeting attended by them.



Mr. Raju Vegesna, who
is our CEO, Chairman and Managing Director, does not receive any compensation for his service on our Board of Directors. Similarly,
Mr. Ananda Raju Vegesna, who is employed as our Executive Director, also does not receive any compensation for his service on our
Board of Directors. Directors are reimbursed for travel and out-of-pocket expenses in connection with their attendance at Board
and Committee meetings. T. H. Chowdary, a Director of our Company, has been receiving ₹ 25,000 per month for the technical
services rendered by him.



Officer Compensation



The following table
sets forth all compensation paid by us during the fiscal year ended March 31, 2020 to our executive officers:



|                |  | Summary Compensation Table (₹in million) |      
|--------------- |  | ---------------------------------------- | -----
|Name            |  | Salary(1)                                |      
|                |  |                                          |      
|Kamal Nath      |  |                                          | 13.92
|M P Vijay Kumar |  |                                          | 11.82
|C R Rao         |  |                                          | 12.37



| | (1) | Includes provident fund contributions.
| | --- | --------------------------------------



As per the service
contracts entered into with the employees (including executive officers), the Company provides the following retirement benefits:
(a) Provident fund contributions and (b) Gratuity.



Provident fund contribution
is a defined contribution plan governed by a statute in India. Under this, both employer and employee make monthly contributions
(determined in relation to the basic salary of the respective employees) to a fund administered by the Government of India.



Gratuity is a defined
benefit retirement plan covering all employees and provides for lump sum payment to employees at retirement or termination (computed
based on the respective employees last drawn basic salary and years of employment with the Company). Liability for gratuity is
accrued based on an actuarial valuation on an overall Company basis.



The Directors (who
are not executive officers) are not entitled for any remuneration including any pension, retirement or similar benefit schemes.



The details of our contribution to provident
fund in respect of the executive officers are set out below:



|Name            |  | ₹  in million |     
|--------------- |  | ------------- | ----
|Kamal Nath      |  |               | 0.68
|M P Vijay Kumar |  |               | 0.52
|C R Rao         |  |               | 0.50



63







Gratuity expense is
determined at an overall Company level based on an actuarial valuation performed by an independent actuary. Thus, the cost for
the year ended March 31, 2020 in respect of gratuity and compensated absences towards executive officers of the Company was not
separately determined. Gratuity cost relating to such executive officers is not estimated to be material.



We make bonus payments
to employees including executive officers upon satisfactory achievement of the following two performance criteria.



(i) Performance of
the Company: Represents bonus payable on achievement of overall revenue and net profit targets for the Company.



(ii) Performance of
the individual: Represents bonus payable on achievement of the individual’s Key Responsibility Areas (KRA) and Key Performance
Indicators (KPI). These KRAs and KPIs vary in relation to each employee including executive officers and include both financial
and non-financial parameters.



We have provided for
₹ 166.57 million ($2.21 million) towards bonus payable for the year ended March 31, 2020 to employees including executive
officers who have achieved the KRAs and KPIs.



Total of 1.65 million
options were allotted to executive officers as part of ASOP 2014 plan during fiscal 2015. Further 1.35 million options were allotted
to executive officers during the fiscal 2020. Related charge for the fiscal 2019 amounted to ₹ 9.09 million ($ 0.12 million)



Board Composition



Our Articles of Association
sets the minimum number of directors at three and the maximum number of directors at twelve. We currently have seven directors
on the Board. The Indian Companies Act and our Articles of Association require the following:



| | • | at least two-thirds of our directors shall be subject to re-election by our shareholders; and
| | - | ---------------------------------------------------------------------------------------------



| | • | at least one-third of our directors who are subject to re-election shall be up for re-election
at each annual meeting of our shareholders.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



However Independent
Directors are not liable to retire by rotation.



On July 15, 2005, we
appointed Messrs. S.K. Rao and C.B. Mouli as independent Directors of the Board to comply with the applicable NASDAQ rules. Dr.
S.K Rao resigned effective June 4, 2018.



Mr. C E S Azariah was
appointed as an independent Director effective March 25, 2013.



Dr T H Chowdary is
also an independent Director of the Board.



Mr Arun Seth was appointed
as an Independent Director effective October 22, 2018.



Each of these Directors
(Mr. C B Mouli, Mr. C E S Azariah and, Dr T H Chowdary and, Mr. Arun Seth) continue to remain independent in accordance with NASDAQ
rules.



In addition, based on the recommendation
of the Board of Directors, (Mr. C B Mouli, Mr. C E S Azariah and Dr T H Chowdary) were appointed by the shareholders as the Independent
Directors of the Board for a term of five consecutive years from the conclusion of the Twenty Third Annual General Meeting held
on July 5, 2019 and their terms expires in July 2024. As per the provision of the Indian Companies Act, 2013 they are eligible
for reappointment for a further term of Five consecutive years from the conclusion of the ensuing Annual General Meeting subject
to the approval of Shareholders by way Special Resolution.



64







Term of Directors



|Mr. Raju Vegesna, CEO, Chairman & Managing Director                 | Appointed as Chairman & Managing Director
        for a period of five years effective July 18, 2009, Mr. Raju Vegesna was subsequently appointed as the Chairman & Managing
        Director of the Company at the Annual General Meeting of the Company under Section 203 of the Companies Act, 2013 for a period
        of five years, effective from July 18, 2014, without any remuneration from the Company. His appointment was also approved by the
        Central Government. His present term expires on July 17, 2019, upon which he will become eligible for reappointment.
        
        Pursuant to the recommendation of the Nomination
        & Remuneration Committee, the Board of Directors have reappointed Mr. Raju Vegesna as the Chairman & Managing Director
        of the Company for a further period of Five years effective July 18, 2019 without any remuneration from the Company.
        
        In terms of Section 196 of the Companies
        Act, 2013, the above reappointment is subject to the approval of the shareholders at the Annual General Meeting. Further, as Mr.
        Raju Vegesna is a Non-Resident Indian, his reappointment as the Chairman & Managing Director of the Company is also subject
        to the approval of the Central Government under Part I of the Schedule V of the Companies Act, 2013. As per Articles of Association
        of the Company, he is not required to retire by rotation and hence shall hold office for the full term.
|------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mr. Ananda Raju Vegesna, Executive Director                         | Appointed as Executive Director for a period
        of five years effective June 22, 2010 and subsequently reappointed for a further period of five effective June 22, 2015.
        
        Pursuant to the recommendation of the Nomination
        & Remuneration Committee and the Board on May 5, 2020, Mr. Ananda Raju Vegesna was reappointed as the Executive Director for
        a further period of five years effective June 22, 2020 which is subject to the approval of shareholders at the Annual General Meeting
        to be held before September 30, 2020.
        
        Further, as per the Act, he retired by
        rotation at the ensuing Annual General Meeting scheduled on July 6, 2018 and got re-elected.
        
        The Board of Directors on May 5, 2020,
        have also appointed Mr Ananda Raju Vegesna as an Additional Director under Section 161 of the Companies Act, 2013 and he shall
        hold office up to the date of the ensuing Annual General Meeting and is eligible for election as a Director by the shareholders
        at the AGM since the term of office expires on June 21, 2020.                                                                                                                                                                                                                                                                                                                                                                
|Dr T H Chowdary, Chairman of Compensation and Nominating Committees | Appointed as a Director in February 1996.  As per the Indian Companies Act, 2013, he was appointed as an Independent Director for a term of five consecutive years from the conclusion of the Eighteenth Annual General Meeting held on July 28, 2014. He was re-appointed for a further period of five years by the Shareholders at the Twenty Third Annual General Meeting held on July 5, 2019                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Ms. Vegesna Bala Saraswathi                                         | Appointed as an Additional Director in July 2015.  As per the Indian Companies Act, 2013, she was elected by the shareholders at the Annual General Meeting held on July 4, 2016. Further, as per the Act, she will retire by rotation and be eligible for re-election at the ensuing Annual General Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Mr. C B Mouli, Chairman and Financial Expert of Audit Committee     | Appointed as a Director in July 2005.  As per the Indian Companies Act, 2013, he was appointed as an Independent Director for a term of five consecutive years from the conclusion of the Eighteenth Annual General Meeting held on July 28, 2014. He was re-appointed for a further period of five years by the Shareholders at the Twenty Third Annual General Meeting held on July 5, 2019                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Mr. C E S Azariah                                                   | Appointed as a Director by the Board of Directors in March 2013.  As per the Indian Companies Act, 2013, he was appointed as an Independent Director for a term of five consecutive years from the conclusion of the Eighteenth Annual General Meeting held on July 28, 2014. He was re-appointed for a further period of five years by the Shareholders at the Twenty Third Annual General Meeting held on July 5, 2019                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Mr. Arun Seth                                                       | Appointed as an Additional Director (Independent)
        in October 2018.  As per the Indian Companies Act, 2013, he was elected by the shareholders at the Twenty Third Annual
        General Meeting held on July 5, 2019 and appointed as an Independent Director of the Company for a period of five years effective
        July 5, 2019.
        
        He shall be eligible for re appointment
for a further period of five years subject to the approval of Shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



65







The Company has service
contracts with Mr. Raju Vegesna, CEO, Chairman and Managing Director. The service contracts with Mr. Raju Vegesna do not provide
for any remuneration or benefits either during or upon termination of employment.



For other non-executive
Directors, the Company does not have any service contract and such directors’ term is governed by the Indian Companies Act,
2013.



The Company does not
have any service contract with the other Senior Executives of its administrative, supervisory or management bodies. Such senior
executives’ appointment does not have any specific term and can be terminated by either party based on the terms of the appointment.



Board Committees



Details relating to Audit, Compensation,
Corporate Social Responsibility and Nominating Committees of our board are provided below:



Audit Committee



Our Audit Committee is comprised of three
independent directors, as determined under applicable NASDAQ rules. They are:



Mr. C B Mouli;



Mr. C E S Azariah



and



Mr. Arun Seth



The primary objective of the Audit Committee
is to monitor and provide effective supervision of our financial reporting process with a view towards ensuring accurate, timely
and proper disclosures and the transparency, integrity and quality of financial reporting. Our Audit Committee oversees the work
carried out in the financial reporting process by our management, including the internal auditors and the independent auditor and
reviews the processes and safeguards employed by each. In addition, our Audit Committee has the responsibility of oversight and
supervision over our system of internal control over financial reporting, audit process, and process for monitoring the compliance
with related laws and regulations. The Audit Committee recommends to our Board the appointment of our independent registered auditors
and approves the scope of both audit and non-audit services. All members of the Audit Committee meet the independence requirements
and majority of them meet financial literacy requirements as defined by applicable NASDAQ and SEC rules.



The Audit Committee held five meetings
in person during fiscal year 2019-20.



The Audit Committee has adopted a Charter
and it is reviewed annually.



Compensation Committee



Our Compensation Committee consists of
three independent directors as determined under applicable NASDAQ rules, and consists of:



| | (i) | Dr T H Chowdary;
| | --- | ----------------



| | (ii) | Mr. C E S Azariah and
| | ---- | ---------------------



66







| | (iii) | Mr. C B Mouli
| | ----- | -------------



The Compensation Committee of the Board
of Directors determines the salaries, benefits and stock option grants for our employees, consultants, directors and other individuals
compensated by our Company. The Compensation Committee also administers our compensation plans. The Compensation Committee has
adopted a Charter, which is reviewed annually.



The Compensation Committee held four meetings
in person during fiscal 2019-20.



Corporate Social Responsibility Committee



As per Section 135 of the Indian Companies
Act, 2013, the Company is required to spend 2% of the average net profits from the three preceding financial years to Corporate
Social Responsibility (CSR) activities. For this purpose, the Board has constituted the



Corporate Social Responsibility Committee
(CSR).



The CSR Committee of the board consists
of the following Directors:



Mr. Raju Vegesna



Mr. Ananda Raju Vegesna



Mr. C E S Azariah



The purpose of the CSR Committee is to
monitor the implementation of the CSR projects or programs or activities undertaken by the Company. A responsibility statement
shall be signed by the CSR Committee confirming compliance with the CSR objectives and Policy of the Company. The Committee shall
submit its report to the Board and the Board shall report the same in its report to the shareholders annually.



The Corporate Social Responsibility (CSR)
is displayed on the Company’s website at http://sifytechnologies.com/investors/company-profile/csr-policy/.



For the financial year 2019-20, the company
has spent ₹ 17.20 million in pursuance of its Corporate Social Responsibility Policy in the following manner:



| | 1. | Contribution to the Hospital for the Disabled: The Company has contributed ₹ 15.00 million to Sri Venkateswara Institute of Research and Rehabilitation for the Disabled Trust.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Contribution towards promoting Education:The Company has contributed ₹ 0.50 million towards promotion of education.
| | -- | -------------------------------------------------------------------------------------------------------------------



| | 3. | Contribution towards Health:The Company has contributed ₹ 1.70 million towards promotion of Health.
| | -- | ---------------------------------------------------------------------------------------------------



Nominating Committee



The Nominating Committee of the board consists
exclusively of the following non-executive, independent directors as determined under applicable NASDAQ rules:



Dr T H Chowdary



Mr. C B Mouli



and



Mr. C E S Azariah



The purpose of Nominating Committee is
to oversee nomination process for top level management and specifically to identify, screen and review individuals qualified to
serve as our Executive Directors, Non-Executive Directors and Independent Directors consistent with criteria approved by our board
and to recommend, for approval by our board, nominees for election at our annual general meeting of shareholders.



67







On July 22, 2015, the Nominating Committee
has reviewed and recommended the appointment of Ms. Vegesna Bala Saraswathi as an additional Director of the Company who holds
office up to the Annual General Meeting. Further, she was elected by shareholders as a Director at the Annual General Meeting held
on July 4, 2016, Further, as per the Act, she retires by rotation and eligible for re-election. She was re-elected at the Annual
General Meeting held on July 6, 2017. The Nominations Committee has adopted a charter.



On October 22, 2018, the Nominating Committee
reviewed and recommended the appointment of Mr. Arun Seth as an additional Director of the Company who shall hold office up to
the ensuing Annual General Meeting scheduled on July 5, 2019. After election, he will be appointed as an Independent Director of
the Company for a period of five years effective July 5, 2019.



On May 5, 2020, the Nominating Committee
reviewed and recommended the reappointment of Mr. Ananda Raju Vegesna as an Executive Director and also approved for appointment
as an additional Director of the Company who shall hold office up to the ensuing Annual General Meeting to be held before September
30, 2020.



Employees



As of March 31, 2020,
we had 2,794 employees, compared with 2,655 as of March 31, 2019. Of our current employees, 136 are administrative, 378 form our
sales and marketing, 121 are in product and content development, 2,114 are dedicated to technology and technical support, and 45
are in business process and customer care. None of our employees are represented by a union. We believe that our relationship with
our employees is good.



Stock Ownership



The following table
sets forth information with respect to the beneficial ownership of our equity shares as of May 31, 2020 by each director and our
senior management executives. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and
investment power with respect to equity shares. Unless otherwise indicated, the persons named in the table have sole voting and
sole investment control with respect to all equity shares beneficially owned.



|                        |  | Equity Shares Beneficially Owned |            
|----------------------- |  | -------------------------------- | -----------
|Beneficial Owner        |  | Number                           |            
|Raju Vegesna *          |  |                                  | 154,053,326
|Ananda Raju Vegesna     |  |                                  | -          
|Vegesna Bala Saraswathi |  |                                  | -          
|T. H. Chowdary          |  |                                  | -          
|C B Mouli               |  |                                  | -          
|Arun Seth               |  |                                  | -          
|C E S Azariah           |  |                                  | -          



* Other than the above, none of the Directors
or Executive Officers of the Company holds any shares in the Company.



The following options were granted to our
senior management executives as part of our ASOP plan described below:



|Total options outstanding (Shares)       |  |  | 2,980,000 | 
|---------------------------------------- |  |  | --------- | 
|Weighted average exercise price (INR)    |  |  | 83.77     | 
|Weighted average exercise period (years) |  |  | 3.31      | 



Associate Stock Option Plan



We have an Associate Stock Option Plan,
or ASOP, which provides for the grant of options to employees of our Company.



The Company introduced
a new Stock Option Plan under Associate Stock Option Plan 2014 (ASOP 2014) for granting ESOPs as Equity Shares and/or ADSs linked
warrants to the eligible Associates of the Company and its Holding/Subsidiaries/Associates. This was in addition to the earlier
ASOP Plans of 2000, 2002, 2005 and 2007. For this purpose, the Company allocated 25 million Equity Shares of ₹ 10/- each
under ASOP 2014. The proposal was approved by the Board of Directors and the shareholders of the Company at the Eighteenth Annual
General Meeting held on July 28, 2014 and 25,000,000 shares were reserved for issuance under the plan. The Company also filed Form
S-8 on December 21, 2015 with SEC for the options issued under the plan. As of March 31, 2020, we had outstanding options of 11.06
million under our ASOP Plans with a weighted average exercise price equal to approximately ₹ 70.90 ($0.94) per equity share.



68







The Board at their meeting held on January
20, 2015 approved to grant of 5,870,800 options to 85 Associates and issued Grant Letters. The vesting of options commenced in
January 2016. During the year ended 2020, 3 associates have exercised 78,900 vested options.



Further during fiscal 2016, 2017, 2018,
2019 and 2020, the Company granted 184,300, 525,000, 150,000, 335,000 and 7,220,000 options to eligible Associates.



The ASOP Plans are administered by the
Compensation Committee of our Board of Directors. On the recommendation of the Compensation Committee, we issue option letters
to identified employees, with the right to convert the issued options into our equity shares at the rates indicated in the options.



An employee holding options may apply for
exercise of the options on a date specified therein which is referred to as the conversion date. The options are not transferable
by an employee. The options lapse in the event of cessation of employment due to reasons of non-performance or otherwise. The equity
shares transferred to the employee after conversion from options is the absolute property of the employee and will be held by the
employee.



Item 7. Major
Shareholders and Related Party Transactions



Principal Shareholders



The following table
sets forth information with respect to the beneficial ownership of our equity shares as of March 31, 2020 by each person or group
of affiliated persons who is known by us based on our review of public filings to beneficially own 5% or more of our equity shares.
The table gives effect to equity shares issuable within sixty days upon the exercise of all options and other rights beneficially
owned by the indicated shareholders on that date. Beneficial ownership is determined in accordance with the rules of the SEC and
includes voting and investment power with respect to equity shares as well as the power to receive the economic benefits of ownership
of securities. Unless otherwise indicated, the persons named in the table have sole voting and sole investment control with respect
to all equity shares beneficially owned. The information below is based on a review of filings made by such persons with the SEC.



Mr. Raju Vegesna, the
Co-Trustee of the Vegesna Family Trust, which is the owner of Infinity Capital Venture Management LLC, which is the general partner
of Infinity Capital Ventures, LP, exercise voting control and dispositive power over the equity shares owned by Infinity Capital
Ventures, LP. Mr. Raju Vegesna, CEO, Chairman and Managing Director of our Company, is affiliated with Infinity Capital Ventures,
LP.



Infinity Satcom Universal
Private Limited is owned and controlled by Mr. Raju Vegesna, CEO, Chairman and Managing Director of the Company.



Ramanand Core Investment
Company Private Limited is a wholly owned subsidiary company of Raju Vegesna Infotech and Industries Private Limited which is owned
and controlled by Infinity Satcom Universal Private Limited, which in turn is owned and controlled by Mr. Raju Vegesna, CEO, Chairman
and Managing Director of the Company.



As of March 31, 2020,
entities affiliated with our CEO, Chairman and Managing Director, Mr. Raju Vegesna, beneficially owned approximately 85.96% of
our outstanding equity shares, which includes the 125,000,000 shares fully paid during the current year (partly paid with proportionate
voting rights until previous year) issued in connection with the private placement described below.



69







|                                                                                           |  | Equity Shares Beneficially
owned |            
|------------------------------------------------------------------------------------------ |  | -------------------------------- | -----------
|Shareholder                                                                                |  | Number                           |            
|Infinity Capital Ventures, LP, 11601 Wilshire Boulevard, Suite 1900, Los Angeles, CA 90025 |  |                                  | 13,902,860 
|Vegesna Family Trust, LP, 11601 Wilshire Boulevard, Suite 1900, Los Angeles, CA, 90025     |  |                                  | 620,466    
|Infinity Satcom Universal Private Limited, Visakhapatnam                                   |  |                                  | 14,530,000 
|Ramanand Core Investment Company Private Limited, Visakhapatnam*                           |  |                                  | 125,000,000



* Ramanand Core Investment Company Private
Limited is controlled by Raju Vegesna Infotech and Industries Private Limited, which is in turn, controlled by Infinity Satcom
Universal Private Limited and therefore Infinity Satcom Universal Private Limited holds the beneficial interest in Ramanand Core
Investment Company Private Limited.



Details of significant change in the
percentage ownership held by the major shareholders:



|Name of the shareholder                                 |  | 2017-18       |             |  | 2018-19 |  |       | 2019-20       | 
|------------------------------------------------------- |  | ------------- | ----------- |  | ------- |  | ----- | ------------- | 
|                                                        |  | No. of shares |             |  | %       |  |       | No. of shares | 
|Infinity Capital Ventures, LP, USA                      |  |               | 13,902,860  |  |         |  | 7.78  |               | 
|Vegesna Family Trust, USA                               |  |               | 620,466     |  |         |  | 0.35  |               | 
|Infinity Satcom Universal Private Limited               |  |               | 14,530,000  |  |         |  | 8.13  |               | 
|*  Raju Vegesna Infotech and Industries Private Limited |  |               | -           |  |         |  | -     |               | 
|**  Ramanand Core Investment Company Private Ltd.       |  |               | 125,000,000 |  |         |  | 69.96 |               | 



* 125,000,000 shares were issued to Raju
Vegesna Infotech and Industries Private Limited at a discount of 50% to the prevailing American Depositary Share market price since
the allotment of shares was for unlisted Indian equity shares. The shareholders of the Company approved the unregistered offering
through voting in a general meeting where the promoter group beneficially owned 85.96% of the equity shares eligible to vote in
the meeting.



** Raju Vegesna Infotech and Industries
Private Limited transferred its entire 125,000,000 shares to Ramanand Core Investment Company Private Ltd., its wholly owned subsidiary
company.



Reference is made to note 36 to the Consolidated
Financial Statement as regards the shareholding of Ramanand Core Investment Company Private Limited. As of such date, these shares
are fully paid up of the face value and hence carry entire voting rights of these shares.



The Company has not issued any shares having
differential voting rights and hence the Company’s major shareholders do not have differential voting rights.



United States Shareholders



As of March 31, 2020,
39,692,595 of our ADSs were held in the United States and we had approximately 10,032 shareholders in the United States. Each ADS
represents one equity share.



Host country Shareholders



As on March 31, 2020,
139,530,652 of our equity shares were held in India and we had 24 shareholders on record in India. Each equity share has a par
value of ₹ 10/- each.



Control of Registrant



Based on our review
of filings made with the SEC, Infinity Capital Ventures, LP beneficially owned 7.76% of our equity shares as of March 31, 2020.
This shareholder is a party to the Subscription Agreement dated November 10, 2005 with our Company. The Subscription Agreement
provides that, among other things, the Company shall appoint Mr. Raju Vegesna as the Chairman of the Board of Directors, Infinity
Capital shall also nominate another person to the Board of Directors and for so long as Infinity Capital continues to own at least
10% of the Company’s outstanding Equity Shares, the Company shall not enter into any agreement pursuant to which it would
provide a third party with registration rights for Company securities, without the consent of Infinity Capital. In November 2005,
Mr. Raju Vegesna, a nominee of Infinity Capital Ventures, LP, was appointed as Chairman of our Board of Directors. In February
2006, the Company also appointed Mr. P S Raju as the second nominee of Infinity Capital to the Board of Directors. Consequent to
the resignation of Mr. P S Raju, as a Director effective May 31, 2015, Ms. Vegesna Bala Saraswathi was appointed as an additional
Director of our Company effective July 22, 2015, as a Nominee. Further, as per the Act, she retires by rotation and is eligible
for re-election. She was re-elected at the Annual General Meeting held on July 6, 2017.



70







Infinity Satcom Universal
Private Limited, India also beneficially owned 8.11% of our equity shares as of March 31, 2020.



As of March 31, 2020,
entities affiliated with our CEO, Chairman and Managing Director, Mr. Raju Vegesna, beneficially owned approximately 85.96% of
our outstanding equity shares, which includes the 125,000,000 shares issued in connection with the private placement described
below.



These shareholders
are presently able to exercise control over many matters requiring approval by our shareholders, including the election of directors
and approval of significant corporate transactions. Under Indian law, a simple majority is sufficient to control all shareholder
actions except for those items, which require approval by a special resolution. If a special resolution is required, the number
of votes cast in favor of the resolution must be not less than three times the number of votes cast against it. Examples of actions
that require a special resolution include:



| | • | altering our Articles of Association;
| | - | -------------------------------------



| | • | issuing additional shares of capital stock, except for pro rata issuances to existing shareholders;
| | - | ---------------------------------------------------------------------------------------------------



| | • | commencing any new line of business; and
| | - | ----------------------------------------



| | • | commencing a liquidation.
| | - | -------------------------



Circumstances may
arise in which the interests of Infinity Capital Ventures, LP or Infinity Satcom Universal Private Limited or a subsequent purchaser
of their shares could conflict with the interest of our other shareholders or holders of our ADSs. These shareholders could prevent
or delay a change in control of our Company even if a transaction of that sort would be beneficial to our other shareholders, including
the holders of our ADSs.



On October 30, 2010,
we consummated the issuance and sale of 125,000,000 of our equity shares in a private placement with our promoter group, including
an entity affiliated with our CEO, Chairman and Managing Director, Mr. Raju Vegesna. See note 36 in the notes to the financial
statements in this Annual Report.



Forfeiture of equity shares issued in
a private placement



During the year ended
March 31, 2008, Sify proposed a scheme of amalgamation to merge Sify Communications Limited (erstwhile subsidiary) with the Company
and made applications to the appropriate authorities in India for approval of the proposed scheme of amalgamation to take over
the IP-VPN services from Sify Communications Limited ( erstwhile subsidiary) upon the consummation of the merger. Under the provisions
of the local telecom regulations, a Company engaged in the business of providing IP-VPN services was required to maintain Indian
shareholding at least 26% of the total paid up share capital of the Company. In order to maintain the Indian shareholding at 26%
in Sify consequent to the approval of the proposed scheme of amalgamation, Sify and Infinity Satcom Universal, an Indian entity
(the Purchaser) entered into a Subscription Agreement (effective March 24, 2008), whereby the Company agreed to sell, and Infinity
agreed to purchase, 12,817,000 equity shares of the Company (herein after referred to as ‘the Share Purchase’), at
a per share purchase price of USD $4.46/ - per share (referred to as ‘the Purchased Shares’), equivalent to ₹
175/- per share in Indian Rupees.



In connection with
the private placement of shares to Infinity Satcom Universal, the independent directors of the Board of the Directors waived the
provision of the Standstill Agreement dated November 10, 2005 prohibiting Infinity Capital Ventures, Raju Vegesna and any Affiliate
from acquiring additional shares of the Company. Each of Messrs. Raju Vegesna and Ananda Raju Vegesna abstained from voting
on the waiver.



The Company received
a sum of ₹ 112,149 (comprising of ₹ 12,817 towards face value and ₹ 99,332 towards securities premium) and called
up a sum of ₹ 448,595 (comprising of ₹ 25,634 towards face value and ₹ 422,961 towards securities premium). Subsequent
to fiscal 2008, the Company withdrew its applications made to appropriate authorities for the approval of the proposed scheme of
amalgamation with Sify Communications Limited (erstwhile subsidiary). Consequent upon the withdrawal of the merger, Infinity Satcom
Universal communicated to Sify that they would not contribute to calls already made and any balance monies which would become payable
under the Subscription Agreement. Hence, the Board of Directors forfeited the shares allotted and the monies collected (₹
112,149 including sums towards capital and premium) at the meeting held on August 29, 2008.



71







Sale of shares in a private transaction



Pursuant to a Share
Purchase Agreement dated May 31, 2009 between Infinity Capital Venture Management and Infinity Satcom Universal Private Limited,
a Company owned and controlled by Ananda Raju Vegesna, Executive Director of the Company and brother of Raju Vegesna, CEO, Chairman
and Managing Director of the Company, Raju Vegesna has sold 4,000,000 Equity Shares of ₹ 10/- each of the Company to Infinity
Satcom for a consideration of $ 3,000,000 in a private transaction.



Issuance of Equity Shares in private
placement to the promoter group:



On October 30, 2010,
we consummated the issuance and sale of 125,000,000 of our equity shares in a private placement with our promoter group, including
an entity affiliated with our CEO, Chairman and Managing Director, Mr. Raju Vegesna. See note 36 in the notes to the consolidated
financial statements in this Annual Report.



The proceeds from the
said issue have been utilized towards capital expenditure and expansion plans of the Company. During the fiscal 2019 the shares
have become fully paid up.



Related Party Transactions



Refer to Note 33 ‘Related Parties’
in Item 18 of this Annual report for the list of related parties and their relationships as on March 31, 2019 and March 31, 2020.



Related party transactions & balances
with subsidiaries on standalone basis



₹ in million

|Particulars                              |  | Sify Technologies (Singapore) Pte. Limited |    |  | Sify Technologies North America Corporation |  |     | Sify Data and Managed Services Limited |  |  | Sify Infinit Spaces Limited |  |  | Total |  
|---------------------------------------- |  | ------------------------------------------ | -- |  | ------------------------------------------- |  | --- | -------------------------------------- |  |  | --------------------------- |  |  | ----- | -
|Transactions during the year            
|Advances Paid                            |  |                                            | -  |  |                                             |  | -   |                                        |  |  | 129                         |  |  |       | -
|Receipt of Services                      |  |                                            | 63 |  |                                             |  | -   |                                        |  |  | -                           |  |  |       | -
|Rendering of Services                    |  |                                            | 6  |  |                                             |  | 287 |                                        |  |  | 1                           |  |  |       | 2
|Outstanding balances as at 31 March 2020
|Advance Receivable                       |  |                                            | -  |  |                                             |  | -   |                                        |  |  | 131                         |  |  |       | 2
|Trade Payables                           |  |                                            | 98 |  |                                             |  | -   |                                        |  |  | -                           |  |  |       | -
|Trade Receivables                        |  |                                            | 33 |  |                                             |  | 102 |                                        |  |  | -                           |  |  |       | 2



All transactions between Sify Technologies
Limited and its subsidiaries till the date of this Annual Report have been in the ordinary course of business



Refer to Note 33 ‘Related Parties’
for details of transactions with KMP



72







Loans to employees



We provide salary
advances to our employees in India who are not executive officers or directors. The annual rate of interest for these loans is
0 %. As of March 31, 2020, the loan outstanding from employees is ₹ 12.40 million.



Item 8.
Financial Information



Financial Statements



The following financial
statements and auditors’ report appear under Item 18 in this Annual Report on Form 20-F and are incorporated herein by reference:



| | · | Report of Independent Registered Public Accounting Firm
| | - | -------------------------------------------------------

| | · | Consolidated Balance Sheet as of March 31, 2020 and 2019
| | - | --------------------------------------------------------

| | · | Consolidated Statements of comprehensive income for the years ended March 31, 2020, 2019 and 2018
| | - | -------------------------------------------------------------------------------------------------

| | · | Consolidated Statements of changes in equity for the years ended March 31, 2020, 2019 and 2018
| | - | ----------------------------------------------------------------------------------------------

| | · | Consolidated Statements of cash flows for the years ended March 31, 2020, 2019 and 2018
| | - | ---------------------------------------------------------------------------------------

| | · | Notes to the consolidated financial statements
| | - | ----------------------------------------------



Legal Proceedings



| | a) | Proceedings before Department of Telecommunications
| | -- | ---------------------------------------------------



| | (i) | License fees
| | --- | ------------



DoT had issued separate licenses
to Sify Technologies Ltd (Sify) for providing Internet, National Long Distance & International Long Distance services.. The
license fee was payable to the DoT on the Adjusted Gross Revenue (AGR) as per the terms of each license. Sify has been regularly
paying license fee on the revenue arising out of services as per the license conditions.



DoT has raised demands on service
providers providing Internet, NLD, ILD services etc. demanding license fee on the revenue made by the service providers from other
business income such as Data Centre, Cloud, application services, power, Gas, etc. DoT contended that all the income of the company
irrespective of the business was required to be considered as part of 'income' for the purpose of calculation of the license fee.
The Internet Service Providers through its association ISPAI challenged DoT's demand by way of separate petitions. The company
filed a Writ Petition before Hon’ble Madras High Court challenging the demand made by DoT on the Income accruing from other
business units which is still pending. Meanwhile TDSAT passed a separate order in favor of Access Telecom service providers &
Internet Service Providers.



"DoT subsequently challenged
the order of TDSAT passed in favor of Access Telecom Service Providers before Hon’ble Supreme Court of India. The Hon’ble
Supreme Court by its order dated 24.10.2019 set aside the order of the TDSAT & held that Access Telecom Service Providers should
pay the license fee as per its license conditions.



DoT attempted to apply the judgement
of the Hon’ble Supreme Court on the Service Providers providing ISP, NLD, ILD services. These Service providers which had
different license conditions and having revenue from other business units approached the Hon’ble Supreme Court stating that
Hon’ble Supreme Court judgement dated 24.10.2019 on the access Telecom Service Providers is not applicable to other services
providers as license conditions were different from the Access Telecom Service Providers. The Hon’ble Supreme Court chose
not to hear the petitions and directed the other service providers to approach the appropriate forum.



The Company which had approached
Hon’ble High Court of Madras (Court) in 2013 by filing a writ petition prohibiting Department of Telecommunications (DOT)
from levying a license fee on non-licensed activities obtained stay of the demands. The Hon’ble Court restrained DoT from
recovering the license fee in respect of non- telecom activities and the case is pending for hearing. The Company believes that
it has adequate legal defenses against the demand raised by DoT and that the ultimate outcome of these actions will not have a
material adverse effect on the Company's financial position and result of operations. ISPAI, association representing the internet
service providers including the company issued a letter to DoT stating that the Hon’ble Supreme Court judgement dated 24.10.2019
is not applicable to Internet Service Providers and the license conditions are different.



73







The Company which had received
notices for earlier years from DoT claiming License fee on the total Income (including income from Non Licensed activities) has
already responded to these notices stating that license fees are not payable on income from non-licensed activities. The Company
believes that it has adequate legal defenses against these notices and that the ultimate outcome of these actions may not have
a material adverse effect on the Company's financial position and result of operations.""



DoT in its written submission
made before the Hon’ble Supreme Court had clearly mentioned that non telecom revenue would stand excluded from the purview
of the gross revenue . In 2017, the Hon’ble Tripura High Court held that Service Providers are not liable to pay license
fee on the income accruing from other businesses."



(ii) The present license for
ISP under Unified License issued by DOT on June 2, 2014 provides for payment of License fee on pure internet services. However,
the Company through Internet Service Providers Association of India (ISPAI) challenged the said clause before TDSAT and has not
made payment in this regard. TDSAT passed a stay order on DOT from charging the License fee on pure internet services. The Company
has appropriately accounted for any adverse effect that may arise in this regard in the books of account. However TDSAT by its
order dated 18.10.2019 held that license fee is not chargeable on the Internet Service Providers.



| | b) | The Group is party to additional legal actions arising in the ordinary course of business. Based
on the available information as at March 31, 2020, the Group believes that it has adequate legal defenses for these actions and
that the ultimate outcome of these actions will not have a material adverse effect [the maximum financial exposure would be ₹
88.3 million (March 31, 2019: ₹ 91.6 million)] on the Group's financial position and results of operations.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | The Company has received an order passed under section 7A of the Employees Provident Fund &
Miscellaneous Provisions Act, 1952 from Employees Provident Fund Organization (EPFO) claiming provident fund contribution aggregating
to ₹ 6.4 million on special allowances paid to employees. The company has filed a writ petition before High court of Madras
and obtained the stay of demand. In Feb 2019, the Supreme Court held, in a similar case, that Special allowances paid by the employer
to its employee will be included in the scope of basic wages and subject to provident fund contribution. However, the Supreme Court
has not fixed the effective date of order.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | During the year, Directorate General of Goods and Services Tax Intelligence (DGGI) did an inspection
based on the analysis of service tax returns filed by the Group in the past. The Group has been categorizing services relating
to e-Learning and Infrastructure Management Services provided to foreign customers billed in convertible foreign currency under
OIDAR services while filing its half-yearly service tax return. However, based on the Place of Provision of Services Rules then
applicable under the Finance Act, 1994, Service Tax has to be paid for OIDAR services provided to foreign customers even if the
conditions for qualifying as export of services are met. Hence, the DGGI contended that Service Tax should be paid on the services
classified as OIDAR services in the returns. The total contended during the period April 2014 to November 2016 of Service Tax was
₹ 161.8 million and the Interest & Penalty as applicable. The Group believes that the services relating to e-learning
and infrastructure management services will not fall under OIDAR services and also the activities covered under E-learning and
IMS does not meet the conditions for taxation under the provisions applicable as OIDAR and hence there is no liability. However,
during the investigation, the Group has paid ₹ 64.6 million under protest to continue the proceeding with the relevant adjudicating
authorities. Thereafter, the DGGI has issued Show Cause Notice and the Group has replied on the same. The matter is pending with
the Adjudicating Authority. The Group believes that no provision is required to be made against this demand.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Dividends



Under Indian law, a
Company may pay dividends upon recommendation by its Board of Directors and approval by a majority of its shareholders. Any future
cash dividends on our equity shares represented by ADSs will be paid to the depository in rupees and will generally be converted
into dollars by the depository and distributed to holders of ADSs, net of the depository’s fees and expenses.



74







However, the dividend
payment policy of the Company is not certain and is contingent upon each year’s profits of the Company. Investors seeking
cash dividends should consider this at the time of purchase of our ADRs.



In view of the unexpected
outbreak of pandemic COVID 19 and the consequent lockdown and reduced economic activities, compounded by uncertainty of timing
of return to normalcy, your Directors consider it appropriate to conserve resources within the company to stay liquid and use prudently
for expansion. Hence, the Board of Directors did not recommend any dividend for the year 2019-20.



Significant changes



None



Item 9.
The Offer and Listing



Trading Markets



There is no public
market for our equity shares in India, the United States or any other market. Our ADSs evidenced by American Depository Receipts,
or ADRs, are traded in the United States only on the NASDAQ Capital Market under the symbol “SIFY”. Each ADS represents
one equity share. The ADRs evidencing ADSs were issued by our depository, Citibank, N.A., pursuant to a Deposit Agreement.



Item 10. Additional
Information



Our Authorized capital
stood at ₹ 2,040,000,000, divided into 204,000,000 Equity Shares, having a par value ₹ 10 per share. As of March 31,
2020, 179,223,247 Equity Shares were issued and fully paid. There are no partly paid up shares. The equity shares are our only
class of share capital. We have 11,056,100 options outstanding to purchase equity shares as of March 31, 2020.



Some of the share capital,
39,692,595 shares, is represented by American Depository Shares issued by our Company in accordance with applicable laws and regulations.
Our Articles of Association and the Indian Companies Act permit us to issue classes of securities in addition to the equity shares.
For the purposes of this annual report, “shareholder” means a shareholder who is registered as a member in the register
of members of our Company. The term shareholders and ADSs holders have the same meaning in this annual report since the Indian
Companies Act only defines a shareholder.



There have no significant changes in the
share capital of the company during the fiscal 2020 and 2018 except for exercise of stock options by eligible employees. In addition
to exercise of stock options during the fiscal 2019, the partly paid shares as part of the subscription agreement entered into
with Mr. Ananda Raju Vegesna, dated October 22, 2010 were converted to fully paid up after receiving the balance money of ₹900
million towards the 125,000,000 equity shares.



Memorandum and Articles of Association



Set forth below is the material information
concerning our share capital and a brief summary of the material provisions of our Articles of Association, Memorandum of Association
and the Indian Companies Act, all as currently in effect. The following description of our equity shares and the material provisions
of our Articles of Association and Memorandum of Association does not purport to be complete and is qualified in its entirety by
our Memorandum of Association and Articles of Association that are incorporated by reference to this Annual Report on Form 20-F.



Objects of Memorandum
of Association



The following is a
summary of our Objects as set forth in Section 3 of our Memorandum of Association:



| | 1. | To develop and provide Internet service, Internet Telephony, Infrastructure based services, Virtual
Private Network and other related data, voice and video services, wide area communication network, value added services on the
network, lease or other transfers of network, software, peripherals and related products, and to provide marketing services.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | To provide security products for corporate, carry on the business of consulting, software and hardware,
integrated platform(s) for the e-commerce solutions, applications, information technology, security and all other kinds of technology
solutions or services, and to acquire, maintain, operate, manage and undertake technology and infrastructure for this purpose.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



75







| | 3 | To develop, service & sell/lease data based through direct or electronic media, to develop
a wide area communication network of sell / lease the network or provide value added services on the network to develop, service,
buy / sell computers, software, peripherals and related products to provide marketing services rising direct as well as electronic
media;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4 | To undertake the designing and development of systems and applications software either for its
own use or for sale in India or for export outside India and to design and develop such systems and application software for or
on behalf of manufacturers, owners and users of computer systems and digital / electronic equipment's in India or elsewhere in
the world;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5 | To set up and run electronic data processing centers and to carry on the business of data processing,
word processing, software consultancy, system studies, management consultancy, techno-economic feasibility studies of projects,
design and development of management information systems, share / debenture issues management and / or registration and share/debenture
transfer agency;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | To undertake and execute feasibility studies for Computerization,
setting up of all kind of computer systems and digital/electronic equipment's and the selection, acquisition and installation
thereof whether for the Company or its customers or other users;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7 | To conduct, sponsor or otherwise participate in training programs, courses, seminar conferences
in respect of any of the objects of the Company and for spreading or imparting the knowledge and use of computers and computer
programming languages including the publication of books, journals, bulletins, study / course materials, circulars and news-letters;
and to undertake the business as agents, stockist, distributors, franchise holders or otherwise for trading or dealing in computer
systems, peripherals, accessories, parts and computer consumables, continuous and non-continuous stationery, ribbons and other
allied products and things and standard software packages.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8 | To conduct e-commerce for sale of all kinds of products and services through direct or electronic
media as well as on and off line e-commerce including travel related services, buying and selling of products and services / merchandise,
software, data information etc., in India and abroad.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our Articles of Association
provide that the minimum number of directors shall be 3 and the maximum number of directors shall be 12. Presently, we have 7 directors.
Our Articles of Association provide that at least two-thirds of our directors shall be subject to re-election by our shareholders;
and. at least one-third of our directors who are subject to re-election shall be up for re-election at each Annual General Meeting
of the shareholders.



Our Articles of Association
do not require that our directors have to hold shares of our Company in order to serve on our board of directors.



Our Articles of Association
provide that any director who has a personal interest in a transaction must disclose such interest, must abstain from voting on
such a transaction and may not be counted for the purposes of determining whether a quorum is present at the meeting. Such director's
interest in any such transaction shall be reported at the next meeting of shareholders. The remuneration payable to our directors
may be fixed by the board of directors in accordance with provisions prescribed by the Government of India. Our Articles of Association
provide that our board of directors may generally borrow or secure the payment of any sum of money for our business purposes, provided,
however, where any amounts are to be borrowed, that when combined with any already outstanding debt, exceed the aggregate of our
paid-up capital and free reserves, we cannot borrow such amounts without the consent of our shareholders.



Board of Directors



In terms of the provisions
of the Articles of Association of the Company and the Indian Companies Act 2013:



| | (a) | no director of the Company can vote on a proposal, arrangement or contract in which he is materially
interested;
| | --- | ----------------------------------------------------------------------------------------------------------------



| | (b) | the directors of the Company cannot vote on a proposal in the absence of an independent quorum
for compensation to themselves or their body;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | each of our directors is entitled to receive a sitting fee not exceeding ₹ 100,000 for every
meeting of the Board of Directors and each meeting of a Committee of the Board of Directors, as well as all traveling and out-of-pocket
expenses incurred in attending such meetings; however, effective May 2014, the Company has been paying ₹ 50,000 to the directors
for each Board Meeting attended by them. However, there is no increase in the sitting fee for the Committee meetings, which is
Rs.20,000 for each Meeting.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



76







| | (d) | the directors are empowered to borrow moneys through board meetings up to the prescribed limit
and beyond that with the approval of the shareholders through a General Meeting;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | retirement of directors are determined by rotation and not based on age limit; and
| | --- | ----------------------------------------------------------------------------------



| | (f) | no director is required to hold any qualification shares.
| | --- | ---------------------------------------------------------



For additional information,
please see “Item 6. Director, Senior Management and Employees – Board Composition,” “-Board Committees”
and “-Director Compensation,” and “-Officer Compensation” of this Annual Report on Form 20-F.



Dividends



Under the Indian Companies
Act, our Board of Directors recommends the payment of a dividend which is then declared by our shareholders in a general meeting.
However, the board is not obliged to recommend a dividend. Similarly, under our Articles of Association and the Indian Companies
Act, although the shareholders may, at the annual general meeting, approve a dividend by an amount less than that recommended by
the Board of Directors, they cannot increase the amount of the dividend. In India, dividends generally are declared as a percentage
of the par value of a Company’s equity shares. The dividend recommended by the Board of Directors, and thereafter declared
by the shareholders in the annual general meeting and subject to the limitations described above, is required to be distributed
and paid to shareholders in proportion to the paid up value of their shares within 30 days of the declaration by the shareholders
at the annual general meeting. Pursuant to our Articles, our Board of Directors has the discretion to declare and pay interim dividends
without shareholder approval. Under the Indian Companies Act, dividends can only be paid in cash to the registered shareholder,
the shareholder's order or the shareholder's banker's order, at a record date fixed on or prior to the date of the Annual General
Meeting. We must inform the stock exchanges on which our equity shares and ADSs are listed on the record date for determining the
shareholders who are entitled to receive dividends.



The Indian Companies
Act provides that any dividends that remain unpaid or unclaimed after the 30-day period from the date of declaration of a dividend
are to be transferred to a special bank account opened by the Company at an approved bank. We have to transfer any dividends that
remain unclaimed for seven years from the date of the transfer to an Investor Education and Protection Fund established by the
Government of India under the provisions of the Indian Companies Act. Under the Companies Act, 2013, after the transfer to this
fund, such unclaimed dividends may be claimed by the shareholders on submission of such documents and in accordance with the procedures
as may be prescribed by the Government.



With respect to equity
shares issued during a particular fiscal year (including any equity shares underlying ADSs issued to the depository), cash dividends
declared and paid for such fiscal year generally will be prorated from the date of issuance to the end of such fiscal year.



The Indian Companies
Act, 2013 further provides that, in the event of an inadequacy or absence of profits in any year, a dividend may be declared for
such year out of the Company’s accumulated profits subject to the fulfillment of the following conditions:



| | · | the rate of dividend to be declared may not exceed
the average of the rate at which dividends were declared by it in the three years immediately preceding that year provided that
this sub-rule shall not apply to a company, which has not declared any dividend in each of the three preceding financial years.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the total amount to be drawn from the accumulated
profits shall not exceed one-tenth of the such sum of its paid up capital and free reserves as appearing in the last audited financial
statement,
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the amount so drawn shall first be utilized to set
off the losses incurred in the financial year in which a dividend is declared before any dividend in respect of equity shares
is declared.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
balance of reserves after such withdrawal shall not fall below fifteen per cent of its paid up share capital as appearing in the
latest audited financial statement.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | No
company shall declare dividends unless carried over previous losses and depreciation not provided in previous year or years are
set off against profit of the company of the current year.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



77







Voting Rights



At any general meeting,
voting is by show of hands unless a poll is demanded by a shareholder or shareholders present in person or by proxy holding (a)
not less than one-tenth of the total voting power entitled to vote on a resolution or (b) shares with an aggregate paid up capital
of at least ₹ 500,000. Upon a show of hands, every shareholder entitled to vote and present in person has one vote and, on
a poll, every shareholder entitled to vote and present in person or by proxy has voting rights in proportion to the paid up capital
held by such shareholders. The Chairperson has a casting vote in the case of any tie.



Any shareholder of
the Company entitled to attend and vote at a meeting of the Company may appoint a proxy. The instrument appointing a proxy must
be delivered to us at least 48 hours prior to the meeting. Unless the articles of association otherwise provide, a proxy may not
vote except on a poll. A corporate shareholder may appoint an authorized representative who can vote on behalf of the shareholder,
both upon a show of hands and upon a poll. An authorized representative is also entitled to appoint a proxy.



Ordinary resolutions
may be passed by simple majority of those present and voting at any general meeting for which the required period of notice has
been given. However, specified resolutions such as amendments to our Articles and the Memorandum of Association, commencement of
a new line of business, the waiver of pre-emptive rights for the issuance of any new shares and a reduction of share capital, require
that votes cast in favor of the resolution (whether by show of hands or on a poll) are not less than three times the number of
votes, if any, cast against the resolution by members so entitled and voting. As per the Indian Companies Act, unless the articles
of association of a Company provide for all directors to retire at every annual general meeting, not less than two-third of the
directors of a public Company must retire by rotation, while the remaining one-third may remain on the board until they resign
or are removed. Our Articles of Association require two thirds of our Directors to retire by rotation. One-third of the directors
who are subject to retirement by rotation must retire at each Annual General Meeting. Further, the Indian Companies Act requires
certain resolutions such as those listed below to be voted on only by a postal ballot:



(a) alteration of the objects
clause of the memorandum and in the case of the company in existence immediately before the commencement of the Act, alteration
of the main objects of the memorandum;



(b) alteration of articles of
association in relation to insertion or removal of provisions which, under sub-section (68) of section 2, are required to be included
in the articles of a company in order to constitute it a private company;



(c) change in place of registered
office outside the local limits of any city, town or village as specified in sub-section (5) of section 12;



(d) change in objects for which
a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised under
sub-section (8) of section 13;



(e) issue of shares with differential
rights as to voting or dividend or otherwise under sub-clause (ii) of clause (a) of section 43;



(f) variation in the rights attached
to a class of shares or debentures or other securities as specified under section 48;



(g) buy-back of shares by a company
under sub-section (1) of section 68;



(h) election of a director under
section 151 of the Act;



(i) sale of the whole or substantially
the whole of an undertaking of a company as specified under sub-clause (a) of sub-section (1) of section 180;



(j) giving loans or extending
guarantee or providing security in excess of the limit specified under sub-section (3) of section 186.



78







Bonus Shares



In addition to permitting
dividends to be paid out of current or retained earnings as described above, the Indian Companies Act permits us to distribute
an amount transferred from the reserve or surplus in our profit and loss account to our shareholders in the form of bonus shares,
which are similar to a stock dividend. The Indian Companies Act also permits the issuance of bonus shares from a share premium
account. Bonus shares are distributed to shareholders in the proportion recommended by the Board. Shareholders of record on a fixed
record date are entitled to receive such bonus shares.



Consolidation and Subdivision
of Shares



The Indian Companies
Act permits a Company to split or combine the par value of its shares, provided such split or combination is not made in fractions.
Shareholders of record on a fixed record date are entitled to receive the split or combination.



Pre-emptive Rights and Issue
of Additional Shares



The Indian Companies
Act gives shareholders the right to subscribe for new shares in proportion to their respective existing shareholdings unless otherwise
determined by a special resolution passed by a General Meeting of the shareholders. Under the Indian Companies Act, in the event
of an issuance of securities, subject to the limitations set forth above, a Company must first offer the new shares to the shareholders
on a fixed record date. The offer must include: (i) the right, exercisable by the shareholders of record, to renounce the
shares offered in favor of any other person; and (ii) the number of shares offered and the period of the offer, which may
not be less than 15 days from the date of offer. If the offer is not accepted it is deemed to have been declined and thereafter
the board of directors is authorized under the Indian Companies Act to distribute any new shares not purchased by the pre-emptive
rights holders in the manner that it deems most beneficial to the Company.



Annual General Meetings of Shareholders



We must convene an
annual general meeting of shareholders each year within 15 months of the previous annual general meeting or within six months of
the end of previous fiscal year, whichever is earlier and may convene an extraordinary general meeting of shareholders when necessary
or at the request of a shareholder or shareholders holding not less than one-tenth of our paid up capital carrying voting rights.
In certain circumstances a three month extension may be granted by the Registrar of Companies to hold the Annual General Meeting.
The Annual General Meeting of the shareholders is generally convened by our Company Secretary pursuant to a resolution of the board
of directors. In addition, the Board may convene an Extraordinary General Meeting of shareholders when necessary or at the request
of a shareholder or shareholders holding not less than one-tenth of our paid up capital carrying voting rights. Written notice
setting out the agenda of any meeting must be given at least 21 days prior to the date of the General Meeting to the shareholders
of record, excluding the days of mailing and date of the meeting. Shareholders who are registered as shareholders on the date of
the General Meeting are entitled to attend or vote at such meeting. The Annual General Meeting of shareholders must be held at
our registered office or at such other place within the city in which the registered office is located, and meetings other than
the Annual General Meeting may be held at any other place if so determined by the board of directors.



Our Articles provide
that a quorum for a general meeting is the presence of at least five shareholders in person.



2019 Annual General Meeting



Our Annual General
Meeting for the fiscal year 2019 was held on July 5, 2019 as decided by the Board of Directors at the registered office of our
Company, 2nd Floor, TIDEL Park, 4 Rajiv Gandhi Salai, Taramani, Chennai 600 113, India.



At the Annual General
Meeting, the shareholders approved the following items:



| | · | Adoption of audited financials for the fiscal year ended March 31, 2019 as per Indian GAAP.
| | - | -------------------------------------------------------------------------------------------

| | · | Declaration of Dividend for the year ended March 31, 2019.
| | - | ----------------------------------------------------------

| | · | Appoint a Director in place of Ms. Vegesna Bala Saraswathi(DIN 07237117), who retires by rotation
and being eligible, offers himself for reappointment.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Reappointment of Dr T H Chowdary as an Independent Director of the Company for a further period of
Five years
| | - | -------------------------------------------------------------------------------------------------------------

| | · | Reappointment of Mr C B Mouli as an Independent Director of the Company for a further period of Five
years
| | - | ----------------------------------------------------------------------------------------------------------

| | · | Reappointment of Mr C E S Azariah as an Independent Director of the Company for a further period of
Five years
| | - | --------------------------------------------------------------------------------------------------------------

| | · | Appointment of Mr Arun Seth as an Independent Director of the Company for a period of Five years
| | - | ------------------------------------------------------------------------------------------------

| | · | Reappointment of Mr Raju Vegesna as Chairman & Managing Director of the Company for a further
period of Five years
| | - | ------------------------------------------------------------------------------------------------------------------

| | · | To enhance borrowing powers of the Company
| | - | ------------------------------------------

| | · | Creation of security on the assets of the Company
| | - | -------------------------------------------------

| | · | Ratification of Remuneration payable to Mr. S Ramachandran, Cost Auditor.
| | - | -------------------------------------------------------------------------



79







Limitations on the Rights to Own Securities



The limitations on
the rights to own securities of Indian companies, including the rights of non-resident or foreign shareholders to hold securities,
are discussed in the section entitled “Ownership Restrictions” below.



Register of Shareholders;
Record Dates; Transfer of Shares



We maintain a register
of shareholders as required under the Indian Companies Act, 2013. For the purpose of determining the shares entitled to annual
dividends, the register is closed for a specified period prior to the annual general meeting. The date on which this period begins
is the record date.



To determine which
shareholders are entitled to specified shareholder rights such as dividend, we may close the register of shareholders. The Indian
Companies Act requires us to give at least seven days’ prior notice to the public before such closure. We may not close the
register of shareholders for more than thirty consecutive days, and in no event for more than forty-five days in a year.



Following the introduction
of the Depositories Act, 1996, and the repeal of Section 22A of the Securities Contracts (Regulation) Act, 1956, which enabled
companies to refuse to register transfers of shares in some circumstances, the equity shares of a public Company are freely transferable,
subject only to the provisions of Section 58 of the Indian Companies Act, 2013 and the listing agreement entered into between the
Company and relevant stock exchange on which the shares of the Company are listed. Since we are a public Company under Indian law,
the provisions of Section 58 will apply to us. Our Articles currently contain provisions that give our directors discretion to
refuse to register a transfer of shares in some circumstances. According to our Articles, our directors are required to exercise
this right in the best interests of our Company. While our directors are not required to provide a reason for any such refusal
in writing, they must give notice of the refusal to the transferee within 30 days after receipt of the application for registration
of transfer by our Company. In accordance with the provisions of Section 58 of the Indian Companies Act, our directors may exercise
this discretion if they have sufficient cause to do so. If our directors refuse to register a transfer of shares, the shareholder
wishing to transfer his, her or its shares may file a civil suit or an appeal with the National Company Law Tribunal.



Pursuant to Section
58, if a transfer of shares contravenes any of the provisions of the Indian Companies Act and Securities and Exchange Board of
India Act, 1992 or the regulations issued there under or the Sick Industrial Companies (Special Provisions) Act, 1985 or any other
Indian laws, the Tribunal may, on application made by the relevant Company, a depository incorporated in India, an investor, a
participant, or the Securities and Exchange Board of India or other parties, direct the rectification of the register, record of
members and/or beneficial owners. Pursuant to Section 58, the CLB/Tribunal may, in its discretion, issue an interim order suspending
the voting rights attached to the relevant shares before making or completing its investigation into the alleged contravention.
Notwithstanding such investigation, the rights of a shareholder to transfer the shares will not be restricted.



Under the Indian Companies
Act, unless the shares of a Company are held in a dematerialized form, a transfer of shares is effected by an instrument of transfer
in the form prescribed by the Indian Companies Act and the rules there under together with delivery of the share certificates.
Our transfer agent is GNSA Infotech Limited, Chennai.



Disclosure of Ownership Interest



Section 89 of
the Indian Companies Act 2013 requires holders on record who do not hold beneficial interests in shares of Indian companies to
declare to the Company certain details, including the nature of the holder's interest and details of the beneficial owner. Any
person who fails to make the required declaration within 30 days may be liable for a fine which may extend to ₹50 and
where the failure is a continuing one with a further fine which may extend to ₹ 1 for every day after the first during
which the failure continues.



Disclosure of Significant Beneficial
Ownership



Section 90 of the Indian
Companies Act, 2013 read with Companies (Significant Beneficial Owners) Rule, 2018, as amended from time to time a
significant beneficial owner to submit necessary declarations to the company regarding the details of ownership interests held
in that company. Further, every company shall take necessary steps to identify an individual who is a significant beneficial owner
in relation to the company and require such individual to comply with the applicable provisions



80







A
significant beneficial owner means every individual who, acting alone or together, or through one or more persons or trust, possesses
one or more of the following rights or entitlements in such reporting company: a) holds indirectly, or together with any direct
holdings, not less than 10% of the shares; b) holds indirectly, or together with any direct holdings, not less than 10% of the
voting rights in the shares; c) has the right to receive or participate in not less than 10% of the total distributable dividend
or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings; or d) has
the right to exercise, or actually exercises, significant influence or control, in any manner other than through direct holdings
alone, over the company.



As
per the SBO Rules, a reporting company shall send notice to all its non-individual members who hold more than 10% of
shares, voting rights or right to receive or participate in dividends or any other distribution in order to identify the individual
SBO and cause such individual to make the required reporting to the company. On receipt of such declaration, the company shall
intimate the same to the Ministry of Corporate Affairs.



Any
person failing to submit the required disclosures is punishable with imprisonment for a term which may extend to one year or a
minimum fine of one lakh rupees, but which may extend to ten lakh rupees or both imprisonment and fine. Where the failure
is a continuing one, the individual will be levied a further fine which may extend to one thousand rupees for every day after the
first during which the failure continues.



Independent Director
Databank



On
October 22, 2019, the MCA introduced the Companies (Creation and Maintenance of databank of Independent Directors) Rules,
2019 and amended the Companies (Appointment and Qualification of Directors) Rules, 2014, effective December 1, 2019. The amendments
prescribe new requirements for independent directors to register themselves on an online databank and mandatorily undergo an online
proficiency self-assessment test.



The
Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 has authorized the Indian Institute of Corporate
Affairs (“IICA”) as the institute responsible for the creation and maintenance of the online databank, empanelment
of existing and aspiring independent directors and for providing a platform for them to acquire knowledge, develop new skills,
assess their understanding and apply best practices.



The
amendment to the Companies (Appointment and Qualification of Directors) Rules, 2014 mandated that existing Independent Directors
as well as the every individual who intends to get appointed as an independent directors, apply online to IICA for inclusion of
their name in the Independent Directors Databank.



The
individuals registered with IICA are required to pass an online proficiency self-assessment test within a period of one year from
the date of inclusion of his/her name in the databank. Exemption from passing the test has been granted to individuals who have
served for a period of not less than 10 years as a director or key managerial personnel in a listed public company in India or
in an unlisted public company in India having a paid-up share capital of ₹10
crores or more.. However, registration with the online databank will remain compulsory even for exempted individuals.





81









Income Tax Amendments



Finance Bill, 2020, passed by the Lower
House of the Parliament on 23rd March 2020, received Presidential assent on 27th March 2020. The following
were the key amendments in the Budget presented in Feb 2020 regarding income tax proposals for FY 2020-21:



| | Ø | Dividends no longer exempt in the hands of shareholders:
| | - | --------------------------------------------------------

| | o | Effective 1-Apr-20, dividends will be taxable in the
hands of shareholders under the head “Income from Other Sources”.
| | - | ----------------------------------------------------------------------------------------------------------------------

| | o | Intercorporate dividends: Accordingly, dividends received
by holding company from its subsidiary will be taxable in the hands of holding company. Nevertheless, to remove cascading effect,
deduction is allowed for dividends paid from such dividends received.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Amendments in withholding tax provisions:
| | - | -----------------------------------------

| | o | Withholding tax on technical services reduced to 2%
from 10%. However, withholding tax on professional services continues to be at 10%.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------

| | o | Since dividends have become taxable in the hands of
shareholders, corresponding provisions introduced in withholding taxes wherein mutual funds (deductors) will have to apply TDS
@ 10% on dividend income (if more than Rs.5,000/-) paid to shareholders.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Concessional TDS rate of 5% is applicable on interest
to Non-residents on specified borrowings under existing provisions. The time limit for such borrowings is extended to 1-Jul-23
from 1-Jul-20.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Time limit for receipt of investments extended to
1-Jul-23 from 1-Jul-20 for TDS @ 5% on interest to FPIs
| | - | ---------------------------------------------------------------------------------------------------------

| | o | FPIs are now permitted by SEBI & RBI to invest
in municipal debt securities under limits applicable to State Development Loans. Above concession granted to interest on such
securities
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | TDS @ 1% to be applied by E-commerce operators on
payments to E-commerce participants (i.e. sellers); (5% if PAN/Aadhaar not available). TDS to be applied even if customer pays
directly to e-commerce participant. However, TDS is not applicable if sales through e-commerce operator is less than Rs.0.5 Million
& E-commerce participant furnishes PAN / Aadhaar.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Tax Collected at Source (TCS) @ 5% introduced on remittances
under ‘liberalized remittance scheme’ of the Reserve Bank of India if aggregate receipts exceed Rs.0.7 Million from
a buyer.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | TCS @ 5% introduced on sale of overseas tour package
| | - | ----------------------------------------------------

| | o | In the above cases, if PAN / Aadhaar of the deductee
is not available, TCS is to be applied @ 10%
| | - | -------------------------------------------------------------------------------------------------

| | o | Similarly, TCS @ 0.1% introduced on amount received
on sale of goods exceeding Rs. 5 Million (TCS @ 1% if PAN / Aadhaar not available)
| | - | --------------------------------------------------------------------------------------------------------------------------------------



| | Ø | The following services have also been brought under tax
net. If income from these services accrue or arise due to business connection in India, such income is taxable in India:
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Income from such advertisement which targets a customer
who resides in India or a customer who accesses the advertisement through internet protocol address located in India;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Income from sale of data collected from a person who
resides in India or from a person who uses internet protocol address located in India; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------

| | o | Income from sale of goods or services using data collected
from a person who resides in India or from a person who uses internet protocol address located in India
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Residential Status:
| | - | -------------------

| | o | A person is said to be resident in India if:
| | - | --------------------------------------------

| | · | A person of Indian Origin becomes resident if stay
in India > 120 days (currently, 182 days) & stays for 1 out of 4 preceding years
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | · | If a resident who is not an ordinary resident stays in India for 7 out of 10 preceding years (currently,
9 out of 10)
| | - | ---------------------------------------------------------------------------------------------------------------------

| | · | Deemed to be resident if an Indian citizen is not liable to tax in any other country due to any
reason.
| | - | -------------------------------------------------------------------------------------------------------

| | § | CBDT clarified that Indian citizens who are bonafide
workers in other countries are not included and their foreign income is not taxable in India
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------





82







| | Ø | Filing of Return of Income (ROI) by Non-residents:
As per earlier provisions, Non-Residents / foreign companies need not file ROI if their income includes dividend & interest
income. Now, royalty & Fees for Technical Services have also been included in this exception. However, corresponding Transfer
Pricing provisions have not been amended and hence Transfer Pricing compliances are still to be adhered to. Further, if withholding
taxes were applied on such royalty / fee for technical services under the provisions of Double Taxation Avoidance Agreement, above
concession is not applicable.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | New tax regime introduced for individuals:
| | - | ------------------------------------------

| | o | A new tax regime has been introduced which can be
exercised at the option of individuals. The details are as follows:
| | - | ---------------------------------------------------------------------------------------------------------------------



|Income slabs               |  | New tax regime (if prescribed deductions / 
exemptions not claimed) OPTIONAL |  |  | Current tax regime (with deductions / 
exemptions) | 
|-------------------------- |  | ---------------------------------------------------------------------------- |  |  | -------------------------------------------------- | 
|Upto INR 0.25 Mn           |  | 0%                                                                           |  |  | 0%                                                 | 
|INR 0.25 Mn to INR 0.50 Mn |  | 5% (Nil after tax rebate)                                                    |  |  | 5% (Nil after tax rebate)                          | 
|INR 0.50 Mn to INR 0.75 Mn |  | 10%                                                                          |  |  | 20%                                                | 
|INR 0.75 Mn to INR 1 Mn    |  | 15%                                                                          |  |  | 20%                                                | 
|INR 1 Mn to INR 1.25 Mn    |  | 20%                                                                          |  |  | 30%                                                | 
|INR 1.25 Mn to INR 1.50 Mn |  | 25%                                                                          |  |  | 30%                                                | 
|Above INR 1.50 Mn          |  | 30%                                                                          |  |  | 30%                                                | 



| | o | The new tax regime is at the option of the individuals
which if once exercised by individuals having business income applies to subsequent AYs as well; The option can be withdrawn only
once. For other individuals, this option can be exercised every year separately.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Alternate Minimum Tax (similar to MAT for corporates)
for individuals is withdrawn & existing AMT credit can’t be carried forward
| | - | ---------------------------------------------------------------------------------------------------------------------------------

| | o | To avail the option, individuals need to forego certain
deductions / exemptions such as exemption for Leave Travel Allowance, House Rent Allowance, standard deduction, interest on house
property loans, deductions for investments, etc. Further, losses pertaining to such deductions & losses under the head house
property cannot be claimed.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Ø | Faceless assessments by Income Tax Department & disposal
of appeals introduced wherein returns filed by corporates can be scrutinised and orders issued through an online process. Relevant
directives
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On 20th Sep 2019, Hon’ble
Finance Minister announced various fiscal measures with the aim of promoting “Make in India” and with a view to attract
foreign investments into India. These amendments were brought into effect by way of Tax Laws Amendment Ordinance, 2019. A new corporate
tax regime was introduced vide the aforesaid Ordinance.





83







| | 1. | INTRODUCTION OF SEC 115BAA
| | -- | --------------------------



| | Ø | Indian
companies can now opt for a lower corporate tax rate of 22%
| | - | ------------------------------------------------------------------

| | Ø | Conditions
for availing this lower rate - If the following are not claimed in the computation of taxable income:
| | - | ----------------------------------------------------------------------------------------------------------------

| | o | Exemption
of profits of units in SEZ - Section 10AA
| | - | ---------------------------------------------------

| | o | Additional
Depreciation of 20% (for P&M of manufacturing companies) – Sec 32(1)(iia)
| | - | ------------------------------------------------------------------------------------

| | o | 15%
allowance for investment in P&M in backward areas – Sec 32AD
| | - | ----------------------------------------------------------------

| | o | Deposit
in development accounts, site restoration fund – Sec 33AB & 33ABA
| | - | -------------------------------------------------------------------------

| | o | Deduction
for expenditure on scientific research – Sec 35(2AA) & 35(2AB)
| | - | ------------------------------------------------------------------------

| | o | Capex
deduction for specified business – Sec 35AD
| | - | -------------------------------------------------

| | o | Expenditure
on agricultural extension projects & skill devt projects – Sec 35CCC & 35CCD
| | - | ----------------------------------------------------------------------------------------

| | o | Chap
VIA deductions under Heading C (except deduction u/s 80JJAA on additional employee costs) i.e deductions u/s 80H, 80HH,
80I, 80IA, etc. for profits of industrial undertakings
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | If
brought forward losses not set off to the extent attributable to aforesaid deductions, such loss will not be allowed to
be carried forward
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | Regular
Income Tax Depn (excluding addl depn) allowed
| | - | -----------------------------------------------------

| | Ø | Option
to be exercised before due date of filing return for FY 2019-20 (AY 2020-21)
| | - | -----------------------------------------------------------------------------------

| | Ø | Option
once exercised can’t be withdrawn
| | - | ----------------------------------------



| | 2. | INTRODUCTION
OF SEC 115BAB
| | -- | --------------------------



| | Ø | Newly
incorporated Indian manufacturing companies can opt for a lower corporate tax rate of 15%
| | - | -----------------------------------------------------------------------------------------------

| | Ø | Conditions
for availing the lower rate:
| | - | ---------------------------------------

| | o | Company
set-up & registered after 1-Oct-2019 and manufacturing commenced before 31-Mar-2023
| | - | -------------------------------------------------------------------------------------------

| | o | Company
not formed by splitting up / reconstruction of business already in existence
| | - | ------------------------------------------------------------------------------------

| | o | Company
doesn’t use P&M previously used for any purpose
| | - | -------------------------------------------------------

| | o | Company
doesn’t use any building previously used as hotel or convention centre
| | - | ------------------------------------------------------------------------------

| | o | Company
is not engaged in any business other than its business of manufacture / production & research / distribution of article /
thing produced by it
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | Ø | Conditions
specified in Sec 115BAA in regard to computation of total income & exercise of this option apply to this Section as well
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | Ø | Business
transacted between new manufacturing companies opting for lower tax regime treated as Specified Domestic Transaction from Transfer
Pricing perspective and Transfer Pricing regulations would apply.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



84







| | 3. | OTHER AMENDMENTS
| | -- | ----------------



| | Ø | MAT
rate reduced to 15% from 18.5%
| | - | ----------------------------------

| | Ø | Further,
MAT not applicable to companies exercising the options for reduced rates of 25% or 15% under sections 115BAA / 115BAB
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | Ø | Amendment
of Sec 115QA: No tax on buy-back of shares announced before 5-Jul-2019
| | - | --------------------------------------------------------------------------------

| | Ø | Surcharge
on CG on sale of security by FIIs restricted to 15% (where total income > Rs 2 Crores)
| | - | ------------------------------------------------------------------------------------------------

| | Ø | Surcharge
on reduced Corp tax rates under Sec 115BAA & 115BAB will be @ 10%
| | - | ---------------------------------------------------------------------------



Surcharge on CG on sale of equity shares
of a company / units of an equity-oriented fund / units of a business trust restricted to 15% (10% on total income between Rs 50
Lakhs & Rs 1 Crore and 15% where total income > Rs 2 Crores)



Compliances
under COVID-19



Government
of India and various departments of the Government have given few relaxations for compliances due to COVID-19 pandemic. We have
listed relevant relaxations and measures announced whether or not we have utilized those relaxations.



Relaxations
given by Ministry of Corporate Affairs (MCA):



Due
to COVID-19 pandemic, the MCA has given the following relaxations on the compliances with applicable laws under the Companies
Act, 2013 vide its circular dated March 19, 2020.



| | · | Conducting board meetings through video conferencing:
| | - | -----------------------------------------------------



Matters
pertaining to approval of financial statements, board’s report, mergers, demergers, amalgamations, among others are permitted
to be taken up at board and committee meetings held through video-conferencing or other audiovisual means, for meetings held up
to June 30, 2020.



| | · | Time gap between board meetings:
| | - | --------------------------------



The
maximum time gap for holding consecutive meetings of the board has been extended by a period of 60 days, i.e., from the existing
120 days to 180 days until September 30, 2020.





| | · | Introduction of Company Affirmation of Readiness towards COVID-19 Form
(Form CAR) to ascertain companies’ compliance with COVID-19 related measures and guidelines.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | No requirement for payment of additional fees for late filings
under the Companies Act, 2013 during the period from April 1, 2020 to September 30, 2020.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Introduction of Companies Fresh Start Scheme, 2020:
| | - | ---------------------------------------------------



The
scheme aims to provide an opportunity to companies to make good any filing related defaults and make a fresh start as a fully compliant
entity.



85







| | · | Requirement of Resident Director:
| | - | ---------------------------------



The
requirement for companies to have at least one director who stays in India for a total period of not less than 182 days during
the financial year has been relaxed for fiscal year 2020 and shall not be treated as a non-compliance.





| | · | Conducting General meeting through video conferencing:
| | - | ------------------------------------------------------



The
MCA through its circular No. 14/2020 dated April 8, 2020, Circular No. 17/2020 dated April 13, 2020 and Circular
No. 20/2020 dated May 5, 2020, permitted to hold extra ordinary general meetings and Annual General Meeting through video
conferencing or other audio-visual means, subject to compliance of various conditions mentioned therein.



Income
Taxes:



| | · | Time
limit for filing belated / revised income tax return for FY 2018-19 has been extended from 31-Mar-20 to 31-Jul-20. However, late
filing fee for belated income tax returns have not been waived off.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Due date for remittance of withholding taxes has not been extended. However, interest payable on
such taxes withheld has been reduced from 1.5% to 0.75% per month.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Similarly, interest for delayed payments of advance tax, self-assessment tax, etc. made between
20-Mar-20 to 29-Jun-20 reduced to 9% p.a from existing 12% or 18% p.a
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Due dates for issue of notice, intimation, notification, approval
order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time
limit for completion of proceedings by the authority where the time limit is expiring between 20-Mar-20 to 29-Jun-20 shall be extended
to 31-Jul-20.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Time limit for investment in savings instruments or investments for
roll over benefit of capital gains under Income Tax Act extended to 30-Sep-20.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Due date for filing Tax Audit Report of FY 2019-20 extended to 31-Oct-20 and for filing Income
Tax Returns for FY 2019-20 extended to 30-Nov-20 in all cases.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In addition to the above specific measures, a blanket extension
for all due dates falling in between 20-Mar-20 to 29-Jun-20 has been granted till 31-Jul-20.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In order to provide relief for individuals who are facing cash crunch due to pay cuts or job loss
or waiting for their salaries or wages to be released by their employers, the Income Tax Department also announced to issue all
pending income tax refunds up to Rs 5 lakhs immediately to individuals, charitable trusts and business entities
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Relief for rules for determination of residential status:
| | - | ---------------------------------------------------------

| | o | For persons who came to India before 22-Mar-20, the period of stay from 22-Mar-20 to 31-Mar-20
will not be considered for determining the number of days of stay in India.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | For persons who have been quarantined in India due to COVID-19 on or after 1-Mar-20 and have either
not been able to leave India prior to 31-Mar-20 or were able to leave India on an evacuation flight on or before 31-Mar-20, the
period of the stay from the beginning of the quarantine till 31-Mar-20 or the date of departure, will not be considered for determining
the number of days of stay in India.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | For persons who have departed on an evacuation flight on or before 31-Mar-20, the period of stay
in India from 22-Mar-20 to the date of departure, shall not be considered for determining the number of days of stay in India.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | To promote cashless economy, electronic payment methods (such as debit cards powered by RuPay,
unified payments interface (UPI) and UPI quick response code) were to be offered compulsorily. However, relief from such provision
was granted for wholesalers.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Moreover, Central Board of Direct Taxes
(CBDT) released an instruction on 31-Mar-20 providing relief to the deductees wherein certificates for lower withholding tax rates
of FY 2019-20 can be adopted for FY 2020-21 as well up to 30-Jun-20. In view of this pandemic wherein there would be a delay in
granting certificates for tax deduction at lower rates by Income Tax Department, this would be a great relief for deductees who
have applied and waiting for such certificates from Income Tax Department. CBDT also further clarified on 9-Apr-20 that full threshold
limit of earlier year certificate can be considered for FY 2020-21 and not only the remaining amount. Hence, Sify had requested
our customers to deduct withholding taxes during FY 2020-21 at lower rates based on lower deduction certificates provided during
FY 2019-20.



86







In addition to the aforesaid measures,
in order to provide more funds at the disposal of taxpayers for dealing with the economic situation arising out of COVID-19 pandemic,
Ministry of Finance made a Press release on 13-May-20 reducing all withholding tax rates by 25% effective 14-May-20 till 31-Mar-21.



Goods
& Services Tax (GST):



| | · | As per existing provisions (Rule 36(4)), Input tax credit
claimed in GSTR-3B every month cannot exceed 110% of eligible credit appearing in GSTR-2A. The condition of availment of ITC in
GSTR-3B to the extent of 110% of the total eligible ITC appearing in GSTR-2A has been deferred for February 2020 to August 2020
and the same shall not be required to be fulfilled monthly but on a cumulative basis.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Where an e-way bill has been generated and its period of
validity expires between 20-Mar-20 to 15-Apr-20, the validity period was extended to 30-Apr-20.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | As regards filing of GST returns, late fee for late filing
of GSTR-1 for the months Mar 2020 to May 2020 is waived off if the returns are filed on or before 30-Jun-20.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In respect of GSTR 3B, the following relief is available:
| | - | ---------------------------------------------------------

| | o | Due date of filing GSTR-3B
for May 2020 extended from 20-June-20 to 27-June-20.
| | - | -------------------------------------------------------------------------------

| | o | For GSTR-3B of Feb to Apr 2020, following are the relief
measures:
| | - | ------------------------------------------------------------------



|Month of the return |  | Due date  |  | Date of payment & filing   |  | Interest for late payment                              |  | Fee for late filing of return                     
|------------------- |  | --------- |  | -------------------------- |  | ------------------------------------------------------ |  | --------------------------------------------------
|Feb 2020            |  | 20-Mar-20 |  | Up to 4-Apr-20             |  | NIL                                                    |  | NIL                                               
|                    |  |           |  | From 5-Apr-20 to 24-Jun-20 |  | 9%
        (reduced int rate applicable from 5-Apr-20) |  | NIL                                               
|                    |  |           |  | After 24-Jun-20            |  | 18%
        (Interest from 21-Mar-20)                  |  | Rs.20 or Rs.50 per day till the return filing date
|Mar 2020            |  | 20-Apr-20 |  | Up to 5-May-20             |  | NIL                                                    |  | NIL                                               
|                    |  |           |  | From 6-May-20 to 24-Jun-20 |  | 9%
        (reduced int rate applicable from 6-May-20) |  | NIL                                               
|                    |  |           |  | After 24-Jun-20            |  | 18%
        (Interest from 21-Apr-20)                  |  | Rs.20 or Rs.50 per day till the return filing date
|Apr 2020            |  | 20-May-20 |  | Up to 4-Jun-20             |  | NIL                                                    |  | NIL                                               
|                    |  |           |  | From 5-Jun-20 to 24-Jun-20 |  | 9%
        (reduced int rate applicable from 5-Jun-20) |  | NIL                                               
|                    |  |           |  | After 24-Jun-20            |  | 18%
        (Interest from 21-May-20)                  |  | Rs.20 or Rs.50 per day till the return filing date



| | · | Due dates for issue of notice, intimation, notification, approval order, sanction order, filing
of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings
by the authority where the time limit is expiring between 20-Mar-20 to 29-Jun-20 shall be extended to 30-Jun-20.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In addition to the above specific measures, a blanket extension for all due dates falling in between
20-Mar-20 to 29-Jun-20 has been granted till 30-Jun-20 for GST provisions as well.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | GST Annual return: GSTR 9 is an annual return to be filed annually by taxpayers registered under
GST. It consists of details regarding the outward and inward supplies made/received during the relevant previous year under different
tax heads viz., CGST, SGST & IGST and HSN codes. It is a consolidation of all the monthly/quarterly returns (GSTR-1, GSTR-2A,
GSTR-3B) filed in that year. Due date of filing this annual return for FY 2018-19 has been extended from 31-Mar-20 to 30-Sep-20.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



87







| | · | Ease of filing GST Returns: Nil GSTR 3B returns can be filed just by sending out an SMS from the
registered mobile number and verified using a One-time password (OTP). Other GST returns can be now filed with E-Verification code
as well, in addition by way of Digital Signature Certificate.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Reserve
Bank of India:



| | · | Repo Rate under LAF reduced by 40 bps to 4.0 per cent from 4.40 per cent
| | - | ------------------------------------------------------------------------

| | · | Reverse repo rate under the LAF stands reduced to 3.35 per cent from 3.75 per cent.
| | - | -----------------------------------------------------------------------------------

| | · | Cash Reserve Ratio Reduced by 100 bps to 3 % to infuse liquidity in the system and Reduced daily
CRR maintenance to 80% till June 2020.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------

| | · | Marginal standing facility (MSF) rate and the Bank Rate stand reduced to 4.25 per cent from 4.65
per cent.
| | - | ----------------------------------------------------------------------------------------------------------

| | · | Moratorium on Term Loans - All commercial banks and NBFCs are being permitted to allow a moratorium
of Six months on payment of instalments in respect of all term loans outstanding as on March 1, 2020.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Deferment of Interest on Working Capital Facilities- lending institutions are being permitted to
allow a deferment of Six months on payment of interest in respect of all such facilities outstanding as on March 1, 2020.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Easing of Working Capital Financing - In respect of working capital facilities lending institutions
may recalculate drawing power by reducing margins and/or by reassessing the working capital cycle for the borrowers.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Export Credit - Maximum permissible period of pre-shipment and post-shipment export credit sanctioned
by banks from the existing one year to 15 months, for disbursements made up to July 31, 2020.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Extension of Time for Payment for Imports -  RBI extends the time period for completion of
remittances against normal imports into India (except in cases where amounts are withheld towards guarantee of performance) from
six months to twelve months from the date of shipment for such imports made on or before July 31, 2020.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Permitting Banks to Deal in Offshore Non-Deliverable Rupee Derivative Markets (Offshore NDF Rupee
Market)
| | - | ---------------------------------------------------------------------------------------------------------

| | · | Increase in the investment limit for foreign portfolio investors (FPIs) in corporate bonds to 15%
| | - | -------------------------------------------------------------------------------------------------



Audit and Annual Report



Under the Indian Companies
Act, a Company must file its annual report with the Registrar of Companies within 7 months from the close of the accounting
year or within 30 days from the date of the Annual General Meeting, whichever is earlier. At least 21 days before the annual
general meeting of shareholders excluding the days of mailing and receipt, we must distribute to our shareholders a detailed version
of our audited balance sheet, profit and loss account and cash flow statement and the related reports of the Board and the auditors,
together with a notice convening the annual general meeting. These materials are also generally made available at our corporate
website, www.sifytechnologies.com Under the Indian Companies Act; we must file the audited financial statements presented
to the shareholders within 30 days of the conclusion of the annual general meeting with the Registrar of Companies in Tamil Nadu,
India, which is the state in which our registered office is located. We must also file an annual return containing a list of our
shareholders and other information within 60 days of the conclusion of the meeting.



As per the directive
of the Ministry of Corporate Affairs, Government of India, effective fiscal year ended March 31, 2011 onwards, the Company is required
to file the audited financials in Extensible Business Reporting Language (XBRL) mode by using XBRL taxonomy.



The Company has filed
the financial statements and other documents with Ministry of Corporate Affairs, Government of India (“MCA”) for the
financial year 2018-19 in Extensible Business Reporting Language (XBRL) mode by using XBRL taxonomy.



Company Acquisition of Equity Shares



A Company may, under
some circumstances, acquire its own equity shares without seeking the approval of the High Court. However, a Company would have
to extinguish the shares it has so acquired within the prescribed time period. Generally, a Company is not permitted to acquire
its own shares for treasury operations. An acquisition by a Company of its own shares (without having to obtain the approval of
the High Court) must comply with prescribed rules, regulations and conditions as laid down in the Indian Companies Act and the
Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998, or Buy-back Regulations.



88







Any ADS holder may
participate in a Company's purchase of its own shares by withdrawing his or her ADSs from the depository facility, acquiring equity
shares upon the withdrawal and then selling those shares back to the Company.



There can be no assurance
that equity shares offered by an ADS investor in any buyback of shares by us will be accepted by us. The regulatory approvals required
for ADS holders to participate in a buyback are not entirely clear. ADS investors are advised to consult their legal advisors for
advice prior to participating in any buyback by us, including advice related to any related regulatory approvals and tax issues.



Liquidation Rights



Subject to the rights
of creditors, employees and the holders of any shares entitled by their terms to preferential repayment over the equity shares
and taxes, if any, as may be prescribed under the Indian Companies Act, in the event of our winding-up the holders of the equity
shares are entitled to be repaid the amounts of paid up capital or credited as paid up on those equity shares. All surplus assets
after payments due to the holders of any preference shares at the commencement of the winding-up shall be paid to holders of equity
shares in proportion to their shareholdings.



Redemption of Equity
Shares



Under the Indian Companies
Act, equity shares are not redeemable.



Discriminatory Provisions
in Articles



There are no provisions
in our Articles of Association discriminating against any existing or prospective holder of such securities as a result of such
shareholder owning a substantial number of shares.



Alteration of Shareholder
Rights



Under the Indian Companies
Act, and subject to the provisions of the articles of association of a Company, the rights of any class of shareholders can be
altered or varied (i) with the consent in writing of the holders of not less than three-fourths of the issued shares of that
class; or (ii) by special resolution passed at a separate meeting of the holders of the issued shares of that class. In the
absence of any such provision in the articles, such alteration or variation is permitted as long as it is not prohibited by the
agreement governing the issuance of the shares of that class.



Under the Indian Companies
Act, the articles of association may be altered by a special resolution of the shareholders



Provisions on Changes
in Capital



Our authorized capital
can be altered by an ordinary resolution of the shareholders in a General Meeting. The additional issue of shares is subject to
the pre-emptive rights of the shareholders. In addition, a Company may increase its share capital, consolidate its share capital
into shares of larger face value than its existing shares or sub-divide its shares by reducing their par value, subject to an ordinary
resolution of the shareholders in a General Meeting.



Material Contracts



See the agreements
listed in Item 7, “Major Shareholders and Related Party Transactions” regarding our material contracts involving certain
of our officers and directors.



Exchange Controls



General



The subscription, purchase
and sale of shares of an Indian Company by Person Resident outside India (non-residents) are governed by various Indian laws regulating
the transfer or issue of Securities by the Company to non-residents. These regulations have been progressively relaxed in recent
years. Set forth below is a summary of various forms of investment, and the regulations applicable to each, including the requirements
under Indian law applicable to the issuance of ADSs.



Foreign Direct Investment



Foreign Direct Investment
(FDI) in India is governed by the FDI Policy announced by the Government of India and the provisions of the Foreign Exchange Management
Act (FEMA), 1999. Reserve Bank has issued Notification No. FEMA 20 /2000-RB dated May 3, 2000 which contains the Regulations in
this regard. This Notification has been amended from time to time. The various amendments are compiled every year in Master Circulars.
In terms of Master Circular issued in July 1, 2009, FDI is freely permitted in almost all sectors. Under the FDI Scheme, investments
can be made by non-residents in the shares / convertible debentures / preference shares of an Indian Company, through two routes;
the Automatic Route and the Government Route. Under the Automatic Route, the foreign investor or the Indian Company does not require
any approval from the Reserve Bank or Government of India (RBI) for the investment. Under the Government Route, prior approval
of the Government of India, Ministry of Finance and Foreign Investment Promotion Board (FIPB) / Department of Industrial Policy
and Promotion (DIPP) is required. The details of FDI are contained in the policy and procedures in respect of FDI in India are
available in "the Manual on Investing in India - Foreign Direct Investment, Policy & Procedures".



89







In terms of Master
Circular issued in April 2014, in most manufacturing / service sectors do not require prior approval of the FIPB/DIPP, or the RBI,
if the activity of the investee-Company fulfill the conditions prescribed for Automatic Route. These conditions include certain
eligibility norms, pricing requirements, subscription in foreign exchange, compliance with the Takeover Code (as described below),
and ownership restrictions based on the nature of the foreign investor (as described below). Purchases by foreign investors of
ADSs are treated as direct foreign investment in the equity issued by Indian companies for such offerings. Foreign investment up
to 100 % of our share capital is currently permitted in telecom industry.



Subsequent Transfers



Restrictions for subsequent
transfers of shares of Indian companies between residents and non-residents were relaxed significantly as of October 2004. As a
result, for a transfer between a resident and a non-resident of securities of an Indian Company in the Telecom sector, such as
ours, no prior approval of either the RBI or the Government of India is required, as long as the terms and conditions set out in
A.P. (DIR Series) Circular No. 16 of October 4, 2004 is complied with. These conditions / procedure include compliance with pricing
guidelines, Consent letters from the Transaction Parties, applicability of regulatory requirements such as FDI and the Takeover
Code, filing Form FC TRS with Authorized Dealers (authorized bankers) with relevant enclosures and so on.



Transfers of shares
or convertible debenture, by way of sale or gift, between two non-residents are not subject to RBI approvals or pricing restrictions,
provided the buying non-residents do not have investment in similar business / collaboration / commercial arrangements in India.
If the buying non-residents have similar investment / collaboration / commercial arrangements in India, prior Government Approval
is required for such transaction.



Takeover Code



Upon conversion of
ADSs into equity shares, a holder of ADSs will be subject to the Takeover Code as prescribed by the Securities and Exchange Board
of India.



Reduction of limit for Overseas Direct
Investment



In terms of the extant provisions under
the Foreign Exchange Management Act, 1999 (FEMA, 1999) on overseas direct investments, the total overseas direct investment (ODI)
of an Indian Party in all its Joint Ventures (JVs) and / or Wholly Owned Subsidiaries (WOSs) abroad engaged in any bonafide business
activity should not exceed 400 per cent of the net worth of the Indian Party as on the date of the last audited balance sheet under
the Automatic Route.



As of September 2013, however, the Ministry
of Finance has decided,



| | a) | To reduce the existing limit of 400 per cent of the net worth of the Indian Party to 100 per cent
of its net worth under the Automatic Route (no pre-approval required). Accordingly, AD Category - I banks may allow overseas direct
investments under the Automatic Route up to 100 per cent of the net worth of the Indian party, as on the date of the last audited
balance sheet;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) | To reduce the existing limit of 400 per cent of the net worth of the Indian company, investing
in the overseas unincorporated entities in the energy and natural resources sectors, under the automatic route, to 100 per cent
of the net worth of the Indian company investing in the overseas unincorporated entities in the energy and natural resources sectors,
as on the date of last audited balance sheet; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | Any ODI in excess of 100% of the net worth shall be considered under the Approval Route by the
Reserve Bank of India.
| | -- | ---------------------------------------------------------------------------------------------------------------------



However, the above limits have been reversed
in the year 2014.



90







Fungibility of ADSs



A limited two-way fungibility
scheme has been put in place by the Government of India for ADRs / GDRs. Under this Scheme, a stock broker in India, registered
with SEBI, can purchase shares of an Indian Company from the market for conversion into ADRs/GDRs based on instructions received
from overseas investors. Re-issuance of ADRs / GDRs would be permitted to the extent of ADRs / GDRs which have been redeemed into
underlying shares and sold in the Indian market.



Currently, there is
no public trading market for our equity shares in India or elsewhere nor can we assure you that we will take steps to develop one.
Our equity securities are only traded on NASDAQ through the ADSs as described in this report. Under prior Indian laws and regulations,
our Depository could not accept deposits of outstanding equity shares and issue ADRs evidencing ADSs representing such equity shares
without prior approval of the Government of India. The Reserve Bank of India has announced fungibility regulations permitting,
under limited circumstances, the conversion of ADSs to equity shares and the reconversion of equity shares to ADSs provided that
the actual number of ADSs outstanding after such reconversion is not greater than the original number of ADSs outstanding. If you
elect to surrender your ADSs and receive equity shares, you will not be able to trade those equity shares on any securities market
and, under present law, likely will not be permitted to reconvert those equity shares to ADSs.



If in the future a
market for our equity shares is established in India or another market outside of the United States, those shares may trade at
a discount or premium to the ADSs. Under current Indian regulations and practice, the approval of the Reserve Bank of India is
not required for the sale of equity shares underlying ADSs by a non-resident Indian to a resident Indian as well as for renunciation
of rights to a resident of India, unless the sale of equity shares underlying the ADSs is through a recognized stock exchange or
in connection with the offer made under the regulations regarding takeovers. The shareholders who intend transferring their equity
shares shall comply with the procedural requirements set out under the head ‘subsequent transfers’ above.



The Government is yet
to notify the scheme.



Transfer of ADSs and Surrender
of ADSs



A person resident outside
India may transfer the ADSs held in Indian companies to another person resident outside India without any permission. An ADS holder
is permitted to surrender the ADSs held by him in an Indian Company and to receive the underlying equity shares under the terms
of the Deposit Agreement. Under Indian regulations, the re-deposit of these equity shares with the Depository for ADSs may not
be permitted.



Government of India Approvals



Pursuant to the RBI's
regulations relating to sponsored ADS offerings, an issuer in India can sponsor the issue of ADSs through an overseas depository
against underlying equity shares accepted from holders of its equity shares in India. The guidelines specify, among other conditions,
that:

| | · | the ADSs must be offered at a price determined by
the lead manager of such offering;
| | - | ------------------------------------------------------------------------------------

| | · | all equity holders may participate;
| | - | -----------------------------------

| | · | the issuer must obtain special shareholder approval; and
| | - | --------------------------------------------------------

| | · | the proceeds must be repatriated to India within one month of the closure of the issue.
| | - | ---------------------------------------------------------------------------------------



Ownership Restrictions



The Securities and
Exchange Board of India and Reserve Bank of India regulate Portfolio Investments in Indian Companies by Foreign Institutional Investors
and Non-Resident Indians, both of which we refer to as foreign portfolio investors. The Reserve Bank of India issued a circular
in August 1998 stating that foreign institutional investors in aggregate may hold no more than 30% of the equity shares of an Indian
Company and non-resident Indians and overseas corporate bodies in aggregate may hold no more than 10% of the shares of an Indian
Company through portfolio investments. Under current Indian Law, the aggregate of the investment by the Foreign Institutional Investors
can’t be more than 24% of the equity share capital of an Indian Company, and the aggregate of the investment by the Non-Resident
Indians can’t be more than 10% of the equity share capital of an Indian Company through Portfolio Investments. The 24% and
10% limit referred above may be increased to 49% and 24% respectively on passing of a Special Resolution by the Shareholders to
that effect. Moreover, no single Foreign Institutional Investor may hold more than 10% of the shares of an Indian Company and no
single Non-Resident Indian may hold more than 5% of the shares of an Indian Company.



91







Foreign institutional
investors are urged to consult with their Indian legal and tax advisers about the relationship between the foreign institutional
investor regulations and the ADSs and any equity shares withdrawn upon surrender of ADSs.



Under the Securities
and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, Every purchaser who acquires (directly
or indirectly) more than 5% of the equity share capital at any point of time (the aggregate of the existing shares and the newly
acquired shares) of a Listed Public Indian Company, is required to notify the Company within four days of such acquisition or receipt
of allotment information and the Company in turn is required to notify all the stock exchanges on which the shares of the Company
are listed with seven days.



Any purchaser whose
proposed acquisition entitled him to hold 15% (the aggregate of the existing shares and the newly acquired shares) or more of such
shares or a change in control of the Company, either by himself or with others acting in concert is required to make annual disclosures
of the purchaser’s holdings in the Company and to make an Open Offer to the other Shareholders offering to purchase at least
20% of all the outstanding shares of the Company at a minimum offer price as determined pursuant to the provisions of the regulations.
A purchaser who holds between 15 % and 75 % of a Company’s shares cannot acquire additional shares or voting rights that
would entitle the purchaser to exercise an additional 5.% of the voting rights in any 12 month period unless such purchaser makes
a public announcement offering to acquire an additional 20% of the Company’s shares. Upon conversion of ADSs into equity
shares, an ADS holder will be subject to the Takeover Code. The Takeover Code does not apply to purchases involving the acquisition
of shares (i) by allotment in a public and rights issue, (ii) pursuant to an underwriting agreement, (iii) by registered stockbrokers
in the ordinary course of business on behalf of customers, (iv) in unlisted companies, (v) pursuant to a scheme of reconstruction
or amalgamation or (vi) pursuant to a scheme under Section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985.
The Takeover Code does not apply to purchases in the ordinary course of business by public financial institutions either on their
own account or as a pledgee. In addition, the Takeover Code does not apply to the purchase of ADSs so long as they are not converted
into equity shares. However, since we are an unlisted Company, the provisions of the new regulations will not apply to us. If our
shares are listed on an Indian stock exchange in the future, the new regulations will apply to the holders of our ADSs.



Open market purchases
of securities of Indian companies in India by foreign direct investors or investments by non-resident Indians and foreign institutional
investors above the ownership levels set forth above require Government of India approval on a case-by-case basis.



Voting Rights of
Deposited Equity Shares Represented by ADSs



Holders of ADSs generally
have the right under the deposit agreement to instruct the depository bank to exercise the voting rights for the equity shares
represented by the related ADSs. At our request, the depository bank will mail to the holders of ADSs any notice of shareholders’
meeting received from us together with information explaining how to instruct the depository bank to exercise the voting rights
of the securities represented by ADSs.



If the depository bank
timely receives voting instructions from a holder of ADSs, it will endeavor to vote the securities represented by the holder’s
ADSs in accordance with such voting instructions. In the event that voting takes place by a show of hands, the depository bank
will cause the custodian to vote all deposited securities in accordance with the instructions received by holders of a majority
of the ADSs for which the depository bank receives voting instructions.



Please note that the
ability of the depository bank to carry out voting instructions may be limited by practical and legal limitations and the terms
of the securities on deposit. We cannot assure you that ADS holders will receive voting materials in time to enable them to return
voting instructions to the depository bank in a timely manner. Securities for which no voting instructions have been received will
not be voted except as discussed above.



As a foreign private
issuer, we are not subject to the SEC’s proxy rules, which regulate the form and content of solicitations by United States-based
issuers of proxies from their shareholders. To date, our practice has been to provide advance notice to our ADS holders of all
shareholder meetings and to solicit their vote on such matters, through the depository, and we expect to continue this practice.
The form of notice and proxy statement that we have been using does not include all of the information that would be provided under
the SEC’s proxy rules.



Under Indian law, the ADS holders have
the right to vote on any general meetings either by show of hands or by poll only on becoming the Shareholder of the Company by
converting the ADS into equity shares of the Company.



92







Taxation



Given below summary of tax implications
for holders of ADSs and equity shares received upon withdrawal of such equity shares who are not resident in India, whether of
Indian origin or not. These tax provisions are governed by Income Tax Act read with the Issue of Foreign Currency Convertible Bonds
and Ordinary Shares (through Depository Receipt Mechanism) Scheme, 1993 or the Scheme, as amended.



Every year, new financial proposals are
given effect in the Income-tax Act by way of a Finance Act. Thus, current or existing tax implications as provided in Sections
115AC and 115ACA may undergo a change based on the financial proposals made every year.



THIS SECTION IS NOT INTENDED TO CONSTITUTE
A COMPLETE ANALYSIS OF THE INDIVIDUAL TAX CONSEQUENCES TO NON-RESIDENT HOLDERS UNDER INDIAN LAW FOR THE ACQUISITION, OWNERSHIP
AND SALE OF ADSS AND EQUITY SHARES. PERSONAL TAX CONSEQUENCES OF AN INVESTMENT MAY VARY FOR NON-RESIDENT HOLDERS IN VARIOUS CIRCUMSTANCES,
AND POTENTIAL INVESTORS SHOULD THEREFORE CONSULT THEIR OWN TAX ADVISORS ON THE TAX CONSEQUENCES OF SUCH ACQUISITION, OWNERSHIP
AND SALE, INCLUDING SPECIFICALLY THE TAX CONSEQUENCES UNDER THE LAW OF THE JURISDICTION OF THEIR RESIDENCE AND ANY TAX TREATY BETWEEN
INDIA AND THEIR COUNTRY OF RESIDENCE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT HIS, HER OR ITS OWN TAX ADVISORS WITH RESPECT TO
INDIAN AND LOCAL TAX CONSEQUENCES OF ACQUIRING, OWNING OR DISPOSING OF EQUITY SHARES OR ADSs



Residential status of individuals:



A person is said to be resident in India
during any fiscal year if he or she stays in India in that year:



| | · | For a period of at least 182 days or
| | - | ------------------------------------

| | · | For a period of at least 60 days and, within the four preceding years has been in India for a period
or periods amounting to at least 365 days.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



However, in case a:



| | · | citizen of India who leaves India in a previous year for the purposes of employment outside of
India
| | - | ----------------------------------------------------------------------------------------------------

| | · | citizen of India or a person of Indian origin living abroad who visits India
| | - | ----------------------------------------------------------------------------



then, the second condition as mentioned
above will be applicable only if the person stays in India for a minimum of 182 days.



Finance Act 2020 has amended the provisions
of residential status as below:



| | · | In case of Indian citizens or a person of Indian origin living abroad visiting India having
total income, other than income from foreign source, exceeding Rs. 15 lakhs, the period of stay would be considered at 120 days
as against 182 days as provided above. Further such person would be treated as Not Ordinarily Resident (NOR) if his stay in India
is less than 182 days.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Moreover, such person would be deemed to be a Resident of India if his total income (not including
foreign sourced income) exceeds Rs. 15 lakhs during the previous year and if he/she is not liable to income tax in any other country
or territory by reason of his domicile or residence or any other criteria of similar nature. Such person who is deemed to be resident
of India would be treated as NOR.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Residential status of corporates:



As per the provisions of Income Tax Act,
a company is said to be resident in India if it is an Indian company or if the control and management of its affairs is situated
wholly in India. If any one of the aforesaid conditions is not satisfied, the company is treated as a non-resident as per Income
Tax Act.



| | · | However, Finance Act 2015 brought in a concept called POEM (Place of Effective Management). Accordingly,
the residential status of companies was redefined as a company would be considered a resident if it is an Indian company or if
its place of effective management, in that year, is in India. POEM was defined that a place where key management and commercial
decisions that are necessary for conduct of business as an entity, as a whole are, in substance, made. Thus, a foreign company
will become a resident of India if its POEM is in India. POEM is a well recognized concept in OECD Model Tax Convention & UN
Model Tax Convention. OECD recognized POEM as a tie-breaker rule for determining residential status and hence most of Double Taxation
Avoidance Agreements with India recognize it as a tie-breaker rule.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



93







| | · | Finance Act 2016 has deferred the applicability of POEM by one year and accordingly POEM was applicable
from fiscal 2017 onwards. Ministry of Finance issued detailed guidelines for POEM compliances vide CBDT circular dated January
24, 2017 and also prescribed guidelines specifying the exceptions, modifications and adaptations to the provisions of the Income-tax
Act relating to computation of total income, treatment of unabsorbed depreciation, set off or carry forward and set off of losses,
collection and recovery and special provisions relating to avoidance of tax applicable to foreign companies having POEM in India
vide CBDT Notification No. 29/2018 dated June 22, 2018. This could increase the burden of compliances for our subsidiary companies
situated outside India.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Taxation of Distributions:



Up to fiscal year 2020, dividend income
was exempt in the hands of shareholders since corporates, while disbursing dividends, paid dividend distribution tax (DDT) thereon.
Finance Act 2017 provided that, dividend income in excess of Rs.1 million per annum is taxable at the rate of 10% (plus applicable
surcharge and education cess) for non-corporate resident investors.



However, Finance Act 2020 brought back the earlier provisions
relating to taxability of dividends, wherein dividend income will be taxed in the hands of shareholders based on their respective
taxation limits and provided that companies can do away with payment of DDT. Accordingly, it was also provided that companies are
required to withhold taxes on the dividends paid to shareholders as per the relevant provisions of Income Tax Act also adhering
to the provisions of Double Taxation Avoidance Agreements (DTAA) / Multilateral Instruments (MLI) with respective countries.



In order to remove the cascading effect
on taxes on the dividends paid on the same profits, the amendments also provided for deductions of dividends received from subsidiary
companies from the dividends distributed by the holding companies out of the dividends received from their subsidiaries. Such deductions
available for dividends distributed by the holding companies up to one month prior to the due date of filing Income Tax Return.
Consequent amendment was also made in the provisions for deductions to be allowed on dividend income. It was provided that no deduction
shall be allowed from dividend income, other than the deduction on account of interest expense and such deduction shall not exceed
twenty percent of the dividend income.



A brief history of taxation of dividend
distributions is given below:



Up to fiscal 2013, the domestic companies
were liable to pay a dividend distribution tax at the rate of 16.22% inclusive of applicable surcharge and education cess. The
Finance Act, 2013 has increased the surcharge on dividend distribution tax from 5% to 10% which resulted in increase in the effective
rate of dividend distribution tax to 16.995% as against 16.22% effective April 1, 2013. Any distributions of additional ADSs or
equity shares to resident or non-resident holders will not be subject to Indian tax. The Finance Act, 2014 made an amendment in
section 115-O, which requires grossing up of dividend amount distributed for computing DDT. As a result, the effective rate of
DDT increased from 16.995% to 19.994% inclusive of surcharge and cess. This was effective from October 1, 2014. Further as a result
of increase in rate of surcharge in the Finance Act, 2015, the effective rate of DDT has increased to 20.3576% from 19.994%. However,
for fiscal year 2019 the Government replaced existing 3 per cent education cess with a 4 per cent ‘Health and Education
Cess’ resulting in effective tax rate of 20.555%. Further, the Government of India, through Finance Act, 2017, introduced
a tax on dividends accrued to non-corporate resident investors in excess of  1 million per annum at the rate of 10% (plus
applicable surcharge and education cess). This is in addition to a dividend distribution tax payable by us.  If the effective
rate of dividend distribution tax increases or new forms of taxes on distribution of profits is introduced, the dividend amount
receivable by our shareholders after taxes may decrease. Any distributions of additional ADSs or equity shares to resident or
non-resident holders will not be subject to Indian tax.



Taxation of Employee Stock Option Plans:



Finance Act, 2009 brought provisions to
tax any specified securities or sweat equity shares allotted or transferred, directly or indirectly, by a company free of cost
or at concessional rate to its current or former employees. Accordingly, the fair market value (FMV) of the specified security
or share as on the date of exercise of the option by the employee as reduced by the amount actually paid by, or recovered from
the employee is taxable as a perquisite in the hands of the employee under the head ‘Salaries’. This treatment extends
to all options granted under a company’s stock option plan, where such option is exercised on or after April 1, 2009. It
is to be noted that such securities or sweat equity shares allotted or transferred by a company free of cost or at concessional
rate to its employees were earlier subject to a fringe benefit tax which was abolished in 2009.



94







Taxation of Capital Gains:



Any gain realized on the sale of ADSs 
by a non-resident holder to any non-resident outside India is not subject to Indian capital gains tax as it is not regarded as
transfer by virtue of section 47(viia) of Indian Income tax laws which is prerequisite for taxing as capital gains. Since our ADS
offerings were approved by the Government of India under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme,
non-resident holders of the ADSs have the benefit of tax concessions available under Section 115AC.



The following provisions pertain to taxation
of capital gains as per the provisions of Income Tax Act:



| | · | Shares (including shares issuable on the conversion of the ADSs) held by the non-resident investor
for a period of more than 12 months is treated as long term capital assets. If the shares are held for a period of less than 12
months from the date of conversion, the same is treated as short term capital asset.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Taxable gain realized in respect of equity shares held for more than 12 months, or long-term gain,
is subject to tax at the rate of 10.00% (excluding applicable surcharge and cess).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Taxable gain realized in respect of equity shares held for 12 months or less, or short-term gain,
is subject to tax at variable rates with a maximum rate of 30.00% (excluding applicable surcharge and cess). The actual rate of
tax on short-term gain depends on a number of factors, including the country of residence of the non-resident holder and the type
of income chargeable in India
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Long Term Capital Gain arising from sale of equity shares in a company (or a unit of an equity-oriented
fund or a unit of a business trust) on or after October 1, 2004 and on which STT is paid at the time of sale, was earlier exempt
from Tax. The Finance Act 2017 had amended the Income Tax Act to provide that the Long-term capital gains realized by any person
upon the sale of equity shares in a company is exempt from tax only if the sale of such shares is made on a recognized stock exchange
and Securities Transaction Tax, or STT (described below) is paid both at the time of purchase and sale of such shares, or such
acquisition has been notified by the central government. The Finance Act, 2018 has amended the Income Tax Act to provide that Long
Term Capital Gain exceeding ₹100,000 arising from sale of equity shares in a company or a unit of an equity oriented fund
or a unit of a business trust will be taxable at a rate of 10%, subject to satisfaction of certain conditions and will not get
the benefit of indexation. Thus, any transfer carried out after 1 April 2018, would result in Long Term Capital Gains in excess
of ₹100,000 and will attract tax at the rate of 10 percent. Further if investments are made on or before January 31, 2018,
a method of determining the Cost of Acquisition (COA) of such investments has been specifically laid down. The COA of such investments
shall be deemed to be the higher of-
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | o | The actual COA of such investments; and
| | - | ---------------------------------------

| | o | The lower of
| | - | ------------



| | § | Fair Market Value (‘FMV’) of such investments as on January 31, 2018; and
| | - | -------------------------------------------------------------------------

| | § | Full Value of Consideration received or accruing as a result of the transfer of the capital asset
i.e. the Sale Price.
| | - | ----------------------------------------------------------------------------------------------------------------------



| | · | With respect to assets listed as on January 31, 2018, the FMV would be the highest price quoted
on the recognized stock exchange on January 31, 2018. In case there is no trading of the said asset in such stock exchange, the
highest price on a day immediately preceding January 31, 2018 shall be considered to be the FMV; and any short-term capital gain
is taxed at 15% excluding the applicable surcharge and education cess, if the sale of such equity shares is settled on a recognized
stock exchange and STT is paid on such sale.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Surcharge and education cess:



As per the Finance Act, 2015, the rate of surcharge for domestic
companies having total taxable income exceeding INR 10 Million but not exceeding INR 100 Million is 7% and in the case
of domestic companies whose total taxable income is greater than INR 100 Million, the applicable surcharge is 12%. For foreign
companies, the rate of surcharge is 2% if the total taxable income exceeds INR 10 Million but does not exceed INR 100
Million and it is 5% if the total taxable income of the foreign company exceeds INR 100 Million. The taxes and applicable
surcharge will be increased by incremental levy known as ‘Health and Education cess’ at 4%.Since October 1, 2004, with
respect to a sale and purchase of equity shares entered into on a recognized stock exchange in India, (i) both the buyer and seller
are required to pay a Securities Transaction Tax (STT) at the rate of 0.1% of the transaction value of the securities, if the transaction
is a delivery based transaction, i.e. the transaction involves actual delivery or transfer of shares; (ii) the seller of the shares
is required to pay a STT at the rate of 0.025% of the transaction value of the securities if the transaction is a non-delivery
based transaction, i.e. a transaction settled without taking delivery of the shares. STT is leviable with respect to a sale and
purchase of a derivative and the rates of STT as substituted by Finance Act, 2008 effective June 1, 2008 is as follows: (i) in
case of sale of an option in securities, the seller is required to pay an STT at the rate of 0.05% of the option premium; (ii)
in case of a sale of an option in securities, where the option is exercised, the buyer is required to pay a STT at the rate of
0.125% of the settlement price; and (iii) in case of sale of futures in securities, the seller is required to pay STT at 0.01%
on transaction value.



95







| | · | Any resulting taxes on capital gains arising out of such transaction may be offset by the applicable
credit mechanism allowed under double tax avoidance agreements. The capital gains tax is computed by applying the appropriate tax
rates to the difference between the sale price and the purchase price of the ADSs or equity shares. Under the Scheme, the purchase
price of equity shares in an Indian listed company received in exchange for ADSs will be the market price of the underlying shares
on the date that the Depositary gives notice to the custodian of the delivery of the equity shares in exchange for the corresponding
ADSs, or the “stepped up” basis purchase price. The market price will be the price of the equity shares prevailing
on the BSE or the NSE, as applicable.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | There is no corresponding provision under the Income-tax Act in relation to the “stepped
up” basis for the purchase price of equity shares. However, to the best of our knowledge, the tax department in India has
not denied this benefit. In the event that the tax department denies this benefit, the original purchase price of ADSs would be
considered the purchase price for computing the capital gains tax.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | According to the Scheme, a non-resident holder’s holding period for the purposes of determining
the applicable Indian capital gains tax rate relating to equity shares received in exchange for ADSs commences on the date of the
notice of the redemption by the Depositary to the custodian. However, the Scheme does not address this issue in the case of resident
employees, and it is therefore unclear when the holding period for the purposes of determining capital gains tax commences for
such a resident employee.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The Finance Act, 2017 has also introduced section 56(2)(x) in the Indian Income Tax Act to include
that following shall be chargeable to Income tax as “Income from other sources”:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Where any person receives, in any previous year, from any person or persons on or after the first
day of April, 2017, amongst others, any shares or securities without consideration, the fair market value of which exceeds fifty
thousand rupees, the whole of the fair market value of such shares or securities or for a consideration which is less than the
fair market value of the shares or securities by an amount exceeding fifty thousand rupees, the fair market value of such shares
or securities as exceeds such consideration. For this purpose, the fair market value is required to be computed as per prescribed
taxation rules. Further, this provision is subject to certain specified exemptions, as an example, receipt of shares or securities
from specified relatives, or pursuant to tax neutral mergers and demergers. It is unclear whether capital gains derived from the
sale of subscription rights or other rights by a non-resident holder not entitled to an exemption under a tax treaty will be subject
to Indian capital gains tax. If such subscription rights or other rights are deemed by the Indian tax authorities to be situated
within India, the gains realized on the sale of such subscription rights or other rights will be subject to Indian taxation. The
capital gains realized on the sale of such subscription rights or other rights, which will generally be in the nature of short-term
capital gains, will be subject to tax at a maximum rate of 40% (excluding applicable surcharge and education cess), in case of
a foreign company and at a maximum rate of 30% (excluding applicable surcharge and education cess), in case of resident employees
and non-resident individuals with taxable income over INR 1 Million.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Withholding Tax on Capital Gains:



Any taxable gain realized by a non-resident
on the sale of ADSs or equity shares is to be withheld at the source by the buyer. According to section 196C of the Income Tax
Act (“the Act’), where any income by way of interest or dividends in respect of bonds or global depository receipts
referred to in section 115AC of the Act or by way of long-term capital gains arising from the transfer of such bonds or global
depository receipts is payable to a non-resident, the person responsible for making the payment shall, at the time of credit of
such income to the account of the payee or at the time of payment thereof in cash or by the issue of a check or draft or by any
other mode, whichever is earlier, deduct income tax thereon at the rate of ten per cent subject to any concession rate of tax provided
as per Tax Treaty of respective countries read along with applicable Multilateral Instruments (MLI). The concessional tax rate
benefit as per Tax Treaty would be available subject to providing various Tax forms including Tax Residency certificate by non-resident
shareholders. However, as per the provisions of Section 196D(2) of the Income Tax Act, no withholding tax is required to be
deducted from any income by way of capital gains arising to Foreign Institutional Investors as defined in Section 115AD of
the Income Tax Act on the transfer of securities defined in Section 115AD of the Income Tax Act.



96







Buy-back of Securities:



Prior to July 5, 2019, Indian listed companies
were not subject to any tax on the buy-back of their shares. However, the shareholders will be taxed on any resulting gains. In
case of resident shareholders in absence of any specific provision under the Income Tax Act, the Company is not required to deduct
tax on the consideration payable to resident shareholders pursuant to the Buyback. In case non-resident FPIs, section 196D (2)
of the Income Tax Act provides for specific exemption from withholding tax. Thus, no withholding of tax is required in case of
consideration payable to FPIs. In case other than FPIs Indian companies would be required to deduct tax at source (including applicable
surcharge and cess) on any sum chargeable to tax under section 195(1) of the Income Tax Act. Subject to regulations in this regard,
wherever applicable and it is required to do so, tax at source (including applicable surcharge and education cess) shall be deducted
at appropriate rates as per the Income Tax Act. In doing this, the Company will be guided by generally followed practices and make
use of data available in its records except in cases where the non-resident shareholders provide a specific mandate in this regard.
Since the buyback is through the recognized stock exchanges in India, the responsibility of discharge of the tax due on the gains
(if any) is primarily on the non-resident shareholder given that practically it is very difficult to withhold taxes. It is therefore
important for the non-resident shareholders to suitably compute such gains (if any) on this transaction and immediately pay taxes
in India in consultation with their custodians, authorized dealers and/or tax advisors, as appropriate. Further in case of buyback
of unlisted shares as per section 115QA of the Income Tax Act, domestic companies are subject to tax on buyback of unlisted shares.
The statutory obligation of the non-resident shareholder to pay tax dues on gains (if any) is a separate and independent from the
statutory obligation of the Company to withhold taxes. Correspondingly exemption to shareholder under section 10(34A) of the Income
Tax Act is provided.



Further with effect from July 5, 2019,
the Finance Act (No 2) 2019 has extended the buy-back Tax to shares of listed company under section 115QA of the Income Tax Act,
domestic companies are subject to tax on buyback of listed shares. The statutory obligation of the non-resident shareholder to
pay tax dues on gains (if any) is a separate and independent from the statutory obligation of the Company to withhold taxes. Correspondingly
exemption to shareholder under section 10(34A) of the Income Tax Act is provided.



Further Taxation Law (Amendment) Act 20219
provided that the Tax on buy-back of shares would not apply to such buy-back of shares (being the shares listed on a recognized
stock exchange), in respect of which public announcement has been made on or before the 5th day of July, 2019 in accordance with
the provisions of the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 made under the Securities
and Exchange Board of India Act, 1992 (15 of 1992).



Stamp Duty and Transfer Tax



A sale of equity shares in physical form
by a non-resident holder will be subject to Indian stamp duty at the rate of 0.25% of the market value of the equity shares on
the trade date, although customarily such tax is borne by the transferee. Shares must be traded in dematerialized form. The transfer
of shares in dematerialized form is currently not subject to stamp duty. Transfer of ADSs is not subject to Indian stamp duty.



As per the Finance Act 2019 stamp duty
shall be chargeable on transfer of shares in Dematerialized Form. Rate in such case shall be 0.015% of total market value of shares
in case transfer is made on delivery basis and 0.003% in case transfer is made on non-delivery basis. This provision would be applicable
from July 1, 2020.



Goods and Service Tax



Brokerage or commission paid to stockbrokers
in connection with the sale or purchase of shares is subject to GST of 18% with effect from July 1, 2017. The stockbroker is responsible
for collecting the GST from the shareholder and paying it to the relevant authority. In Erstwhile service tax regime, the service
tax rate was 15% inclusive of all cess.



Minimum Alternate Tax



The Indian Government had introduced Section
115JA to the Income Tax Act which came into effect in April 1, 1997, to bring certain zero tax companies under the ambit of a Minimum
Alternative Tax, or MAT. Finance Act, 2000 introduced Section 115JB to the Income Tax Act modifying the MAT provisions. Accordingly,
if the tax on taxable income of a Company computed under this Act, in respect of a financial year is less than 7.5% of its book
profits, the tax on total income of such Company for the relevant financial year shall be deemed to be an amount equal to 7.5%
 (plus applicable surcharge & cess) of such book profits. Further, the Income tax Act provides that the MAT paid by the
companies can be adjusted against its tax liability under the normal provisions of the Indian Income tax laws but limited to the
extent that is over and above the tax computed under MAT provisions. The taxable rate under MAT provisions was revised over the
years. The Finance Act, 2015 increased the surcharge to 12% from 10% and Finance Act, 2019 replaced 3 percent Education Cess with
a 4 percent ‘Health and Education Cess’. Consequent to the aforesaid amendments, the effective rate of MAT was 21.5488%.
During FY 2019-20, Tax Laws Amendment Ordinance, 2019 was passed and MAT rate was reduced to 15% from the earlier 18.5%. Consequently,
effective rate of MAT reduced to 17.47%. Further, a new corporate tax regime was introduced in which MAT was fully abolished if
such regime is opted by the corporates. The new tax regime is discussed in detail under the head “Additional information”.



97







The Income Tax Act provides that the MAT
paid by companies can be adjusted against its tax liability over the next fifteen years. However, if corporates opt for the new
tax regime, existing MAT Credit cannot be carried forward & adjusted in subsequent years.



Material United States Federal Income Tax
Consequences



The
following is a summary of the material U.S. federal income tax consequences that may be relevant with respect to the ownership
and disposition of equity shares or ADSs and is for general information only. This summary addresses the U.S. federal income tax
considerations of U.S. holders. For purposes of this discussion, “U.S. holders” are (a) individuals who are citizens
or residents of the United States, (b) corporations (or other entities treated as corporations for U,S, federal income tax
purposes) created in or under the laws of the United States or any political subdivision thereof or therein, (c) estates,
the income of which is includable in gross income for U.S. federal income tax purposes, regardless of its source and (d) trusts
having a valid election to be treated as “United States persons” (within the meaning of Section 7701(a)(30) of
U.S. Internal Revenue Code of 1986, as amended (the “Code”)) in effect under U.S. Treasury Regulations or the
administration of which a U.S. court exercises primary supervision and with respect to which a United States person has the authority
to control all substantial decisions.



This
summary is limited to U.S. holders who hold or will hold equity shares or ADSs as capital assets. In addition, this summary is
limited to U.S. holders who are not residents in India for purposes of the Convention between the Government of the United States
of America and the GoI for the avoidance of Double Taxation and the prevention of Fiscal Evasion (the “Convention”)
with respect to taxes on income. If a partnership holds the equity shares or ADSs, the tax treatment of a partner will generally
depend upon the status of the partner and upon the activities of the partnership. A partner in a partnership holding equity shares
or ADSs should consult its own tax advisor.



This
summary does not address any tax considerations arising under the laws of any U.S. state or local or foreign jurisdiction, or tax
considerations under any U.S. non-income tax laws. In addition, this summary does not address tax considerations applicable
to holders that may be subject to special tax rules, such as banks, insurance companies, regulated investment companies, real estate
investment trusts, financial institutions, dealers in securities or currencies, tax-exempt entities, persons liable for
alternative minimum tax, persons that will hold equity shares or ADSs as a position in a “straddle” or as part of a
“hedging” or “conversion” transaction for tax purposes, persons holding ADSs or equity shares through partnerships
or other pass-through entities, persons that have a “functional currency” other than the U.S. dollar or holders of
10% or more, by voting power or value, of the shares of our company. This summary is based on the Code, U.S. Treasury Regulations
in effect or, in some cases, proposed, as of the date of this document, as well as judicial and administrative interpretations
thereof available on or before such date and is based in part on the assumption that each obligation in the deposit agreement and
any related agreement will be performed in accordance with its terms. All of the foregoing is subject to change, which could apply
retroactively and could affect the tax consequences described below.



EACH PROSPECTIVE INVESTOR SHOULD CONSULT
HIS, HER OR ITS OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, U.S. STATE, U.S. LOCAL AND NON-U.S. TAX CONSEQUENCES OF ACQUIRING,
OWNING OR DISPOSING OF EQUITY SHARES OR ADSs



Ownership
of ADSs. For U.S. federal income tax purposes, holders of ADSs generally will be treated as the owners of equity shares represented
by such ADSs. Accordingly, the conversion of ADSs into equity shares generally will not be subject to United States federal income
tax.



Dividends.
The gross amount of any distributions of cash or property (other than, generally, distributions of our equity shares) with respect
to equity shares or ADSs will generally be included in income by a U.S. holder as foreign source dividend income at the time of
receipt, which in the case of a U.S. holder of ADSs generally should be the date of receipt by the depositary, to the extent such
distributions are made from the current or accumulated earnings and profits (as determined under U.S. federal income tax principles)
of our company. Such dividends will not be eligible for the dividends received deduction (“DRD”) generally allowed
to corporate U.S. holders, other than certain corporate U.S. holders who own 10% or more of us. 10% corporate U.S. holders should
consult their tax advisors regarding any DRD to which they are entitled. To the extent, if any, that the amount of any distribution
by our company exceeds our company’s current or accumulated earnings and profits as determined under U.S. federal income
tax principles, such excess will be treated first as a tax-free return of capital to the extent of the U.S. holder’s
tax basis in the equity shares or ADSs and thereafter as capital gain. However, because we do not intend to determine our earnings
and profits under U.S. federal income tax principles, any distribution will generally be treated as a dividend for U.S. federal
income tax purposes.



98







Subject
to certain conditions and limitations, including the passive foreign investment company rules described below, dividends paid to non-corporate U.S.
holders, including individuals, may be eligible for a reduced rate of taxation if we are deemed to be a “qualified foreign
corporation” for U.S. federal income tax purposes.



A
qualified foreign corporation generally includes a foreign corporation (1) with respect to any dividend it pays on its shares
(or ADSs in respect of such shares) that are readily tradable on an established securities market in the United States, or (2) it
is eligible for the benefits under a comprehensive income tax treaty with the United States which the U.S. Treasury Secretary determines
is satisfactory and which includes an exchange of information program. In addition, a corporation is not a qualified foreign corporation
if it is a passive foreign investment company (as discussed below) for the taxable year in which the dividend is paid or the preceding
taxable year. Our ADSs are traded on the NYSE, an established securities market in the United States as identified by Internal
Revenue Service guidance. We may also be eligible for benefits under the Convention.



Subject
to certain conditions and limitations, Indian dividend withholding tax, if any, imposed upon distributions paid to a U.S. holder
with respect to such holder’s equity shares or ADSs generally should be eligible for credit against the U.S. holder’s
U.S. federal income tax liability. Alternatively, a U.S. holder may claim a deduction for such amount, but only for a year in which
a U.S. holder does not claim a credit with respect to any foreign income taxes. The overall limitation on foreign taxes eligible
for credit is calculated separately with respect to specific classes of income. For this purpose, distributions on equity shares
or ADSs will be income from sources outside the United States and will generally be “passive category income” for purposes
of computing the United States foreign tax credit allowable to a U.S. holder. No foreign tax credit or deduction is allowed for
taxes paid or accrued with respect to a dividend that qualifies for the DRD. If dividends are paid in Indian rupees, the amount
of the dividend distribution included in the income of a U.S. holder will be in the U.S. dollar value of the payments made in Indian
rupees, determined at a spot exchange rate between Indian rupees and U.S. dollars applicable to the date such dividend is included
in the income of the U.S. holder, regardless of whether the payment is in fact converted into U.S. dollars. Generally, gain or
loss, if any, resulting from currency exchange fluctuations during the period from the date the dividend is paid to the date such
payment is converted into U.S. dollars will be treated as U.S. source ordinary income or loss.



Sale
or Exchange of Equity Shares or ADSs. A U.S. holder generally will recognize gain or loss on the sale or exchange of equity
shares or ADSs equal to the difference between the amount realized on such sale or exchange and the U.S. holder’s adjusted
tax basis in the equity shares or ADSs, as the case may be. Subject to the “Passive Foreign Investment Company” discussion
below, such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the equity shares or ADSs,
as the case may be, were held for more than one year. Gain or loss, if any, recognized by a U.S. holder generally will be treated
as U.S. source passive category income or loss for U.S. foreign tax credit purposes. Capital gains realized by a U.S. holder upon
sale of equity shares (but not ADSs) may be subject to tax in India, including withholding tax. See the “Taxation of Distributions”
and “Taxation of Capital Gains” discussion above. Due to limitations on foreign tax credits, however, a U.S. holder
may not be able to utilize any such taxes as a credit against the U.S. holder’s federal income tax liability.



Backup
Withholding Tax and Information Reporting.Any dividends paid, or proceeds on a sale of, equity shares or ADSs to or by
a U.S. holder may be subject to U.S. information reporting, and backup withholding, currently at a rate of 24%, may apply unless
the holder is an exempt recipient or provides such holder’s correct U.S. taxpayer identification number, certifies that such
holder is not subject to backup withholding and otherwise complies with any applicable backup withholding requirements. Any amount
withheld under the backup withholding rules may be allowed as a refund or credit against the holder’s U.S. federal income
tax liability, provided that the required information is timely furnished to the IRS.



Estate
taxes. An individual U.S. holder will have the value of the equity shares or ADSs held by such holder included in his or her
gross estate for U.S. federal estate tax purposes. An individual holder who actually pays Indian estate tax with respect to the
equity shares may, however, be entitled to credit the amount of such tax against his or her U.S. federal estate tax liability,
subject to a number of conditions and limitations.



Additional
Tax on Net Investment Income.U.S. holders that are individuals, estates or trusts and whose income exceeds certain thresholds
are subject to a 3.8% tax on certain net investment income, including, among other things, dividends on, and capital gains from
the sale or other taxable disposition of, equity shares or ADSs, subject to certain limitations and exceptions.



Passive
Foreign Investment Company. A non-U.S. corporation will be classified as a passive foreign investment company for
any taxable year for U.S. federal income tax purposes if either:



| | • | 75% or more of its gross income for the taxable year is passive income; or
| | - | --------------------------------------------------------------------------



| | • | on average for the taxable year by value, or, if it is not a publicly traded corporation and so elects
or is a controlled foreign corporation, by adjusted basis, if 50% or more of its assets produce or are held for the production
of passive income.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



99







We
do not believe that we satisfy either of the tests for passive foreign investment company status for the taxable year ended March 31,
2020. However, because this determination is made on an annual basis and depends on a variety of factors (including the value of
our ADSs), no assurance can be given that we were not considered a passive foreign investment company in a prior taxable year,
or that we will not be considered a passive foreign investment company for the current taxable year and/or future taxable years.
If we were to be a passive foreign investment company for any taxable year, U.S. holders would be required to either:



| | • | pay an interest charge together with tax calculated at ordinary income rates on “excess distributions,”
as the term is defined in relevant provisions of U.S. tax laws, and on any gain on a sale or other disposition of ADSs or equity
shares;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | if an election is made for us to be a “qualified electing fund” (as the term is defined
in relevant provisions of the U.S. tax laws), include in their taxable income their pro rata share of undistributed amounts of
our income; or
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | if the equity shares are “marketable” and a mark-to-market election is made, mark-to-market the
equity shares each taxable year and recognize ordinary gain and, to the extent of prior ordinary gain, ordinary loss for the increase
or decrease in market value for such taxable year.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



If
we are treated as a passive foreign investment company, we do not plan to provide information necessary for the qualified electing
fund election.



If
we are treated as a passive foreign investment company for any taxable year during which a U.S. holder holds the ADSs or equity
shares, we will continue to be treated as a passive foreign investment company with respect to such U.S. holder for all succeeding
years during which the U.S. holder holds the ADSs or equity shares, unless we were to cease to be a passive foreign investment
company and the U.S. holder makes a “deemed sale” election with respect to the ADSs or equity shares.



In
addition, certain information reporting obligations may apply to U.S. holders if we are determined to be a passive foreign investment
company.



THE
ABOVE SUMMARY IS NOT INTENDED TO BE A COMPLETE ANALYSIS OF ALL TAX CONSEQUENCES RELATING TO OWNERSHIP OF EQUITY SHARES OR ADSs.
YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR
CIRCUMSTANCES, AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROM AN INVESTMENT IN THE ADSs OR EQUITY SHARES, INCLUDING
THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCAL OR NON-U.S. JURISDICTION, AND ANY ESTATE, GIFT AND INHERITANCE
LAWS.



Documents on Display



This report and other
information filed or to be filed by us can be inspected and copied at the public reference facilities maintained by the SEC at
100 F Street, N.E., Washington, D.C. 20549. Copies of these materials can also be obtained from the Public Reference Section of
the SEC, 100 F Street, NE., Washington, DC 20549, at prescribed rates. Additionally, all of our publicly filed SEC reports are
available at the SEC’s website, www.sec.gov, which contains all the public filings and other information regarding
registrants that make electronic filings with the SEC using its EDGAR system.



Additionally,
documents referred to in this Annual Report may be inspected at our corporate offices which are located at TIDEL Park. No, 4, Rajiv
Gandhi Salai, Taramani, Chennai, 600 113 India.



Item
11. Quantitative and Qualitative Disclosures About Market Risk



General



Market risk is the
risk of loss of future earnings, to fair values or to future cash flows that may result from a change in the price of a financial
instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange
rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable
to all market risk sensitive financial instruments including investments, foreign currency receivables, payables and debt. Our
exposure to market risk is a function of our investment and borrowing activities and our revenue generating activities in foreign
currency. The objective of market risk management is to avoid excessive exposure of our earnings and equity to loss.



100







Risk Management Procedures



We manage market risk
through a corporate treasury department, which evaluates and exercises independent control over the entire process of market risk
management. Our corporate treasury department recommends risk management objectives and policies which are approved by senior management
and our Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies
for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies on a daily basis.



Refer to note 35 of
the notes to consolidated financial statements to this Annual Report for further analysis and exposure arising out of credit risk,
liquidity risk and currency risk



Item 12. Description
of Securities Other Than Equity Securities



Item 12(d).
American Depositary Shares



Citibank,
N.A. (the “Depositary”) serves as the depositary for our ADSs, pursuant to that certain Deposit Agreement by and between
the Company and the Depositary, dated as October 18, 1999, as amended from time to time. ADS holders are required to pay various
fees to the Depositary and the Depositary may refuse to provide any service for which a fee is assessed until the applicable fee
has been paid. For purposes of this section, “Shares” means the Company’s equity shares.



The fees and charges payable by holders
of our ADSs include the following:



| | (i) | a fee not in excess of US $5.00 per 100 ADSs is charged for each issuance of ADS upon deposit of Shares,
excluding certain issuances described below;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | a fee not in excess of US $5.00 per 100 ADSs is charged for each surrender of ADSs, property and cash
in exchange for the underlying deposited securities;
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | a fee not in excess of US $2.00 per 100 ADSs for each distribution of cash dividend or other cash
distribution pursuant to the deposit agreement;
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | a fee not in excess of US $2.00 per 100 ADSs for the distribution of ADSs pursuant to stock dividends
or other free distributions or an exercise of rights; and
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | a fee not in excess of $5.00 per 100 ADSs for depositary services.
| | --- | ------------------------------------------------------------------



Additionally, under
the terms of our deposit agreement, the depositary is entitled to charge each registered holder, beneficial owner, persons depositing
Shares and person surrendering ADS for cancellation and for the purpose of withdrawing deposited securities the following:



(i) taxes (including
applicable interest and penalties) and other governmental charges;



(ii) such registration
fees as may from time to time be in effect for the registration of shares or other deposited securities on the share register and
applicable to transfers of shares or other deposited securities to or from the name of the custodian, the Depositary or any nominees
upon the making of deposits and withdrawals, respectively;



(iii) such cable, telex
and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the
person depositing shares or holders and beneficial owners of ADSs;



(iv) the expenses and
charges incurred by the Depositary in the conversion of foreign currency;



(v) such fees and expenses
as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements
applicable to shares, deposited securities, ADSs and ADRs; and



(vi) the fees and expenses
incurred by the Depositary in connection with the delivery of deposited securities.



101







If any tax or other governmental charge
is payable by the holders and/or beneficial owners of ADSs to the depositary, the depositary, the custodian or the Company may
withhold or deduct from any distributions made in respect of deposited securities and may sell for the account of the holder and/or
beneficial owner any or all of the deposited securities and apply such distributions and sale proceeds in payment of such taxes
(including applicable interest and penalties) or charges, with the holder and the beneficial owner thereof remaining fully liable
for any deficiency.



Amendment to the Depositary Agreement
with Citibank NA. New York.



By Letter dated October 4, 2016, the Company
has executed an amendment to the Letter Agreement dated February 17, 2009 with Citibank N.A., New York wherein the Depository Service
Fees was reduced from USD 0.025 to USD 0.015 per ADS per year.



As per the amendment agreement, Citibank
will make available to the Company an Annual Financial Contribution for each Program Year equal to 33% of the Depositary Service
Fee collected from the ADS holders and the Contribution will be used by the Company solely to defray Program Related Expenses.



Further on September 18, 2018, the Company
executed an amendment to the Letter agreements dated February 17, 2009, April 20, 2010, June 3, 2011 and October 4, 2016 with Citibank
N.A., New York waiving the issuance fees for ADRs issued pursuant to the Company’s Associate Stock Option Plan on the issuance
of up to 25 million ADRs. Also, the term was extended until March 31, 2025.



Direct and Indirect Payments by the
Depositary to Sify



Pursuant to the Deposit
Agreement with Citibank N.A, we have not received any payments from Citibank during the fiscal year ended March 31, 2020 in connection
with our ADS Program



PART II



Item 13. Defaults,
Dividend Arrearages and Delinquencies



Not applicable.



Item 14. Material
Modifications to the Rights of Security Holders and Use of Proceeds



None



Item 15. Controls
and Procedures



Disclosure Controls and Procedures



As of the end of the period covered by
this Annual Report on Form 20-F, our management, with the participation of our CEO, Chairman and Managing Director and CFO, has
carried out an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) or 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at March 31, 2020. The
term “disclosure controls and procedures” means controls and other procedures that are designed to ensure that information
required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit
under the Exchange Act is accumulated and communicated to management, including our CEO, Chairman and Managing Director and CFO,
as appropriate to allow timely decisions regarding our required disclosure. In designing and evaluating our disclosure controls
and procedures, management recognizes that any controls and procedures, no matter how well conceived and operated, can only provide
reasonable assurance that the objectives of the disclosure controls and procedures are met.



Based on their evaluation as of the end
of the period covered by this Annual Report on Form 20-F, our CEO, Chairman and Managing Director and CFO have concluded that our
disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed
in filings and submissions under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified
by the SEC’s rules and forms, and that material information related to us and our consolidated subsidiaries is accumulated
and communicated to management, including the Chief Executive Officer, Chairman and Managing Director and Chief Financial Officer,
as appropriate to allow timely decisions about required disclosure.



102







Management’s annual report on
internal control over financial reporting



| | 1) | Our management is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards
(IFRS), as issued by the International Accounting Standards Board (IASB). Our internal control over financial reporting includes
those policies and procedures that:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of our assets.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------

| | · | provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with applicable accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of our management and directors; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of our assets that could have a material effect on the financial statements.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.



| | 2) | Management assessed the effectiveness of our internal control
over financial reporting as of March 31, 2020. In conducting its assessment of internal control over financial reporting,
management based its evaluation on the framework in Internal Control — Integrated Framework 2013 issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment, management has concluded that our internal
control over financial reporting was effective as of March 31, 2020.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | Our independent registered public accounting firm, ASA &
Associates LLP, has audited the consolidated financial statements included in this Annual Report on Form 20-F, and as part of
their audit, has issued their report, included herein, on the effectiveness of our internal control over financial reporting as
of March 31, 2020.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



103







Report of Independent Registered Public
Accounting Firm



The Board of Directors and Shareholders
Sify Technologies Limited



Opinion on Internal Control over Financial
Reporting



We have audited Sify Technologies Limited’s
(“the Company”) internal control over financial reporting as of March 31, 2020, based on criteria established
in Internal Control — Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of March 31, 2020, based on criteria established in Internal Control — Integrated Framework
(2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission.



We also have audited, in accordance with
the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial position
of the Company and subsidiaries as of March 31, 2020 and March 31, 2019 and the related consolidated statements of income,
comprehensive income, changes in equity and cash flows for each of the years in the three year period ended March 31, 2020
and the related notes (collectively referred to as the ‘financial statements’) and our report dated July 27, 2020 expressed
an unqualified opinion on those financial statements.



Basis for Opinion



The Company’s management is responsible
for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control
over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. Federal Securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.



We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.



Our audit included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures
as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.



Definition and Limitations of Internal
Control over Financial Reporting



A company’s internal control 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 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.



Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



ASA & Associates LLP

Independent Registered Public Accounting
Firm

Chennai, India



July 27th 2020



104







Changes
in internal control over financial reporting



During the period covered by this Annual
Report, there were no changes in our internal control over financial reporting that have materially affected or are reasonably
likely to materially affect our internal control over financial reporting.



Item 16A.
Audit Committee financial expert



Mr. C. B. Mouli, a member of our audit
committee, has been deemed “independent” per the applicable SEC and NASDAQ rules. The Board of Directors has determined
that Mr. Mouli is the “audit committee financial expert” as defined by the applicable rules of the SEC. See Item 6
for description of Mr. Mouli’s relevant experience.



Item
16 B. Code of Ethics



The Company has adopted a Code of Conduct
and Conflict of Interest Policy that is applicable to all employees. The text of the policy was filed as an Exhibit under Item
19 to the Annual Report for the year ended March 31, 2005. This policy is available on our corporate website http://sifytechnologies.com/investors/company-profile/code-of-conduct/.



We have also adopted a written Code of
Ethics, as defined in Item 406 of Regulation S-K, applicable to our principal executive officer, principal financial officer, principal
accounting officer and all officers working in our finance, accounting, treasury, tax, legal, purchase, investor relations functions,
disclosure committee members and senior management, as well as members of the audit committee and the board of directors. This
policy is available in our http://sifytechnologies.com/investors/company-profile/code-of-conduct/. We will post any amendments
to, or waivers from, our Code of Ethics at that location on our website.



Our Audit Committee has also adopted a
Whistleblower Policy wherein it has established procedures for receiving, retaining and treating complaints received, and procedures
for the confidential, anonymous submission by employees of complaints regarding questionable accounting or auditing matters, conduct
which results in a violation of law by Sify or in a substantial mismanagement of Company resources. Under this policy, our employees
are encouraged to report questionable accounting matters, any reporting of fraudulent financial information to our shareholders,
the government or the financial markets any conduct that results in a violation of law by Sify to our management (on an anonymous
basis, if employees so desire). Under this policy, we have prohibited discrimination, retaliation or harassment of any kind against
any employee who, based on the employee's reasonable belief that such conduct or practices have occurred or are occurring, reports
that information or participates in an investigation.



We have also adopted a Code of Conduct,
applicable to all officers, directors and employees. The Code of Conduct is available on our website, http://sifytechnologies.com/investors/company-profile/code-of-conduct/.



Item 16C. Principal
Accountant Fees and Services



The following table
sets forth for the fiscal years indicated the fees paid to our principal accountant and its associated entities for various services
provided to us in these periods.



|                       |  | Fiscal year ended
|---------------------- |  | -----------------
|Type of Service        |  | march 31,2020    
|(a) Audit Fees         |  | ₹ 6.30  million  
|(b) Audit Related Fees |  | ₹ 0.78  million  
|(c) Tax Fees           |  | -                
|(d) All Other Fees     |  | -                



Our Audit Committee requires pre-approval
of all audit and permissible non-audit services to be performed for the Company by its independent auditors, subject to the de-minims
exception for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934.



Item 16D. Exemptions
from the Listing Standards for Audit Committees



We have not sought any exemption from the
listing standards for audit committees applicable to us as foreign private issuer, pursuant to Rule 10(A)-3(d) of the Securities
Exchange Act of 1934.



Item 16E. Purchase
of Equity Securities by the Issuer and Affiliated Purchasers



None.





105









Item 16F. Change
in Registrant’s Certifying Accountant



None.



Item 16 G. Corporate
Governance



NASDAQ Marketplace Rule 5615(a) (3) provides
that a foreign private issuer may follow its home country practice in lieu of the requirements of Rule 5600 series, provided such
foreign private issuer shall disclose in its annual reports filed with SEC or on its website each requirement that it does not
follow and describe the home country practice followed by the issuer in lieu of such requirements.



Under the NASDAQ Marketplace Rule 5620
(c), companies, other than limited partnerships, that maintain a listing on NASDAQ are required to provide for a quorum as specified
in its by-laws for any meeting of its stockholders, and in no case shall the quorum be less than 33-1/3% of the outstanding shares
of a Company's common voting stock. In India, the requirement for a quorum is the presence of at least five shareholders in person.
Our Articles of Association provide that a quorum for a General Meeting of our shareholders is constituted by the presence of at
least five shareholders in person. Hence, we do not meet the quorum requirements under Rule 5620 (c), and instead we follow
our home country practice. Under the NASDAQ Marketplace Rule 5620 (b), companies, other than limited partnerships, that maintain
a listing on NASDAQ are required to solicit proxies and provide proxy statements for all meetings of shareholders and also provide
copies of such proxy solicitation to NASDAQ. However, the SEC proxy rules are not applicable to us, since we are a foreign private
issuer, and Section 176 of the Indian Companies Act prohibits a Company incorporated under that Act from soliciting proxies.
Because we are prohibited from soliciting proxies under Indian law, we will not meet the proxy solicitation requirement of Rule 5620
(b). However, as described above, we give written notices of all our shareholder meetings to all the shareholders and we also file
such notices with the SEC. With regard to issuance of securities, we also comply with the home country regulations.



NATIONAL GUIDELINES ON RESPONSIBLE BUSINESS
CONDUCT (NGRBC):



On March 13, 2019, the Ministry of Corporate
Affairs (MCA), Government of India, has established a set of guidelines and principles called the National Guidelines on Responsible
Business Conduct (NGRBC). The Company affirms its consonance with the principles of the National Guidelines on Responsible Business
Conduct (NGRBC).



| | 1. | Businesses should conduct and govern themselves with integrity in a manner that is Ethical, Transparent
and Accountable.
| | -- | ------------------------------------------------------------------------------------------------------------------------

| | 2. | Businesses should provide goods and services in a manner that is sustainable and safe.
| | -- | --------------------------------------------------------------------------------------

| | 3. | Businesses should respect and promote the well-being of all employees, including those in their
value chains.
| | -- | -------------------------------------------------------------------------------------------------------------

| | 4. | Businesses should respect the interests of and be responsive to all their stakeholders.
| | -- | ---------------------------------------------------------------------------------------

| | 5. | Businesses should respect and promote human rights.
| | -- | ---------------------------------------------------

| | 6. | Businesses should respect and make efforts to protect and restore the environment.
| | -- | ----------------------------------------------------------------------------------

| | 7. | Businesses, when engaging in influencing public and regulatory policy, should do so in a manner
that is responsible and transparent.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------

| | 8. | Businesses should promote inclusive growth and equitable development.
| | -- | ---------------------------------------------------------------------

| | 9. | Businesses should engage with and provide value to their consumers in a responsible manner.
| | -- | -------------------------------------------------------------------------------------------



Item 16 H. Mine
SAFETY disclosure



Not Applicable



106







PART
III



Item 17.
Financial Statements



See Item No 18



Item 18.
Financial Statements



Consolidated Statements and other Financial
Information



Report of Independent Registered Public
Accounting Firm



The Board of Directors and Shareholders

Sify Technologies Limited



Opinion on the Financial Statements



We have audited the accompanying consolidated
statements of financial position of Sify Technologies Limited and its subsidiaries (‘the Company’) as of March 31,
2020 and 2019 and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each
of the years in the three year period ended March 31, 2020 and the related notes (collectively referred to as the ‘financial
statements’).



In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of Sify Technologies Limited and its subsidiaries
as of March 31, 2020 and 2019 and the results of their operations and their cash flows for each of the years in the three
year period ended March 31, 2020, in conformity with the International Financial Reporting Standards as issued by the International
Accounting Standards Board.



We also have audited, in accordance with
the standards of the Public Company Accounting Oversight Board (United States) (‘PCAOB’), Sify Technologies Limited’s
internal control over financial reporting as of March 31, 2020, based on criteria established in Internal Control —
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our
report dated July 27, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial
reporting.



Basis for opinion



These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements, based on our audits.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. Federal Securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due
to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.



ASA & Associates LLP

Independent Registered Public Accounting
Firm



We have served as the Company’s auditor
since year ended March 31, 2011.



Chennai, India
July 27, 2020



107







Sify Technologies Limited

Consolidated Statement of Financial Position

(In thousands of Rupees, except share data
and as otherwise stated)



|                                                           |  |      |  | As at March 31, |             |   | As at March 31, | 
|---------------------------------------------------------- |  | ---- |  | --------------- | ----------- | - | --------------- | 
|                                                           |  | Note |  | 2020₹           |             |   | 2019₹           | 
|                                                           |  |      |  |                 |             |   |                 | 
|Assets                                                     |  |      |  |                 |             |   |                 | 
|Property, plant and equipment                              |  | 5    |  |                 | 11,801,530  |   |                 | 
|Right of Use Assets                                        |  | 7    |  |                 | 3,864,543   |   |                 | 
|Intangible assets                                          |  | 6    |  |                 | 679,692     |   |                 | 
|Lease prepayments                                          |  | 9    |  |                 | -           |   |                 | 
|Other assets                                               |  | 10   |  |                 | 917,216     |   |                 | 
|Deferred contract costs                                    |  | 18A  |  |                 | 38,237      |   |                 | 
|Other investments                                          |  | 15   |  |                 | 211,972     |   |                 | 
|Deferred tax assets                                        |  | 11   |  |                 | 99,346      |   |                 | 
|Total non-current assets                                   |  |      |  |                 | 17,612,536  |   |                 | 
|                                                           |  |      |  |                 |             |   |                 | 
|Inventories                                                |  | 12   |  |                 | 1,302,056   |   |                 | 
|Trade and other receivables, net                           |  | 13   |  |                 | 12,071,983  |   |                 | 
|Contract assets                                            |  | 18A  |  |                 | 16,113      |   |                 | 
|Deferred contract costs                                    |  |      |  |                 | 63,774      |   |                 | 
|Prepayments for current assets                             |  | 14   |  |                 | 537,844     |   |                 | 
|Restricted cash                                            |  | 8    |  |                 | 332,605     |   |                 | 
|Cash and cash equivalents                                  |  | 8    |  |                 | 2,318,480   |   |                 | 
|Total current assets                                       |  |      |  |                 | 16,642,855  |   |                 | 
|Total assets                                               |  |      |  |                 | 34,255,391  |   |                 | 
|                                                           |  |      |  |                 |             |   |                 | 
|Equity                                                     |  | 16   |  |                 |             |   |                 | 
|Share capital                                              |  |      |  |                 | 1,805,047   |   |                 | 
|Share premium                                              |  |      |  |                 | 19,358,022  |   |                 | 
|Share based payment reserve                                |  |      |  |                 | 351,054     |   |                 | 
|Other components of equity                                 |  |      |  |                 | 93,617      |   |                 | 
|Accumulated deficit                                        |  |      |  |                 | (10,256,432 | ) |                 | 
|Total equity attributable to equity holders of the Company |  |      |  |                 | 11,351,308  |   |                 | 



108







Sify Technologies Limited

Consolidated Statement of Financial Position

(In thousands of Rupees, except share data
and as otherwise stated)



|                                                           |  | As at March 31, |  |       | As at March 31, | 
|---------------------------------------------------------- |  | --------------- |  | ----- | --------------- | 
|                                                           |  | Note            |  | 2020₹ |                 | 
|                                                           |  |                 |  |       |                 | 
|Liabilities                                                |  |                 |  |       |                 | 
|Finance lease obligations, other than current installments |  |                 |  |       | -               | 
|Borrowings                                                 |  | 19              |  |       | 3,741,106       | 
|Lease liabilities                                          |  | 7               |  |       | 1,470,099       | 
|Employee benefits                                          |  | 17              |  |       | 177,399         | 
|Contract liabilities                                       |  | 18A             |  |       | 981,767         | 
|Other liabilities                                          |  | 18B             |  |       | 33,420          | 
|Total non-current liabilities                              |  |                 |  |       | 6,403,791       | 
|                                                           |  |                 |  |       |                 | 
|Finance lease obligations, current installments            |  |                 |  |       | -               | 
|Borrowings                                                 |  | 19              |  |       | 4,361,631       | 
|Lease Liabilities                                          |  | 7               |  |       | 356,110         | 
|Bank overdraft                                             |  | 8               |  |       | 1,235,794       | 
|Trade and other payables                                   |  | 20              |  |       | 9,073,859       | 
|Contract liabilities                                       |  | 21              |  |       | 1,472,898       | 
|Total current liabilities                                  |  |                 |  |       | 16,500,292      | 
|                                                           |  |                 |  |       |                 | 
|Total liabilities                                          |  |                 |  |       | 22,904,083      | 
|Total equity and liabilities                               |  |                 |  |       | 34,255,391      | 



The accompanying notes form an integral
part of these consolidated financial statements



109







Sify Technologies Limited

Consolidated Statement of Income

(In thousands of Rupees, except share data
and as otherwise stated)



|                                             |  |         |  | Year ended March 31, |             |   | Year ended March 31, | 
|-------------------------------------------- |  | ------- |  | -------------------- | ----------- | - | -------------------- | 
|                                             |  | Note    |  | 2020₹                |             |   | 2019₹                | 
|                                             |  |         |  |                      |             |   |                      | 
|Revenue                                      |  |         |  |                      |             |   |                      | 
|- Rendering of services                      |  |         |  |                      | 21,125,781  |   |                      | 
|- Sale of products                           |  |         |  |                      | 1,826,286   |   |                      | 
|Total                                        |  | 22      |  |                      | 22,952,067  |   |                      | 
|Cost of goods sold and services rendered     |  |         |  |                      |             |   |                      | 
|- Rendering of services                      |  |         |  |                      | (12,488,814 | ) |                      | 
|- Sale of products                           |  |         |  |                      | (1,876,013  | ) |                      | 
|Total                                        |  | 24      |  |                      | (14,364,827 | ) |                      | 
|Other income                                 |  |         |  |                      | 97,155      |   |                      | 
|Selling, general and administrative expenses |  | 25      |  |                      | (4,513,646  | ) |                      | 
|Depreciation and amortization                |  | 5,6 & 7 |  |                      | (2,290,777  | ) |                      | 
|Profit  from operating activities            |  |         |  |                      | 1,879,972   |   |                      | 
|                                             |  |         |  |                      |             |   |                      | 
|Finance income                               |  | 28      |  |                      | 193,877     |   |                      | 
|Finance expenses                             |  | 28      |  |                      | (1,054,133  | ) |                      | 
|                                             |  |         |  |                      |             |   |                      | 
|Net finance income / (expense)               |  |         |  |                      | (860,256    | ) |                      | 
|                                             |  |         |  |                      |             |   |                      | 
|Profit before tax                            |  |         |  |                      | 1019,716    |   |                      | 
|Income tax (expense) / benefit               |  | 11      |  |                      | (314,339    | ) |                      | 
|Profit for the year                          |  |         |  |                      | 705,377     |   |                      | 
|Attributable to:                             |  |         |  |                      |             |   |                      | 
|Equity holders of the Company                |  |         |  |                      | 705,377     |   |                      | 
|Non-controlling interest                     |  |         |  |                      | -           |   |                      | 
|                                             |  |         |  |                      | 705,377     |   |                      | 
|Earnings per share                           |  | 29      |  |                      |             |   |                      | 
|Basic earnings  per share                    |  |         |  |                      | 3.94        |   |                      | 
|Diluted earnings per share                   |  |         |  |                      | 3.90        |   |                      | 



The accompanying notes form an integral
part of these consolidated financial statements



110







Sify Technologies Limited

Consolidated Statement of Comprehensive
Income

(In thousands of Rupees, except share data
and as otherwise stated)



|                                                          |  | Year ended March 31, |         |  |        | 
|--------------------------------------------------------- |  | -------------------- | ------- |  | ------ | 
|                                                          |  | 2020 ₹               |         |  | 2019 ₹ | 
|Profit for the year                                       |  |                      | 705,377 |  |        | 
|Other comprehensive income                                |  |                      |         |  |        | 
|Items that will not be reclassified to profit or loss     |  |                      |         |  |        | 
|Remeasurements of the net defined benefit liability/asset |  |                      | 10,816  |  |        | 
|Items that may be reclassified to profit or loss          |  |                      |         |  |        | 
|Exchange differences on translation of foreign operations |  |                      | 28,188  |  |        | 
|Total other comprehensive income, net of taxes            |  |                      | 39,004  |  |        | 
|Total comprehensive income                                |  |                      | 744,381 |  |        | 
|Total comprehensive income attributable to:               |  |                      |         |  |        | 
|Equity holders of the Company                             |  |                      | 744,381 |  |        | 
|Non-controlling interest                                  |  |                      |         |  |        | 
|                                                          |  |                      | 744,381 |  |        | 



111







Sify Technologies Limited

Consolidated Statement of Changes in Equity

(In thousands of Rupees, except share data
and as otherwise stated)



For year ended March 31, 2020



|Particulars                                                      |  | Share
    capital |           |  | Share
    premium |  |            | Share
    based payment reserve |  |  | Other
    components of equity |   |  | Retained
    earnings / (accumulated deficit) |        |  | Total |  |             | Non-
    controlling interest |  |  | Total
    equity |  
|---------------------------------------------------------------- |  | ----------------- | --------- |  | ----------------- |  | ---------- | ------------------------------- |  |  | ------------------------------ | - |  | --------------------------------------------- | ------ |  | ----- |  | ----------- | ----------------------------- |  |  | ---------------- | -
|Balance at April 1, 2019                                         |  |                   | 1,804,258 |  |                   |  | 19,352,084 |                                 |  |  | 306,080                        |   |  |                                               | 54,613 |  |       |  | (10,738,207 | )                             |  |  | 10,778,828       |  
|                                                                 |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  |                  |  
|Total comprehensive income for the year                          |  |                   | -         |  |                   |  | -          |                                 |  |  | -                              |   |  |                                               | 39,004 |  |       |  | 705,377     |                               |  |  | 744,381          |  
|                                                                 |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  |                  |  
|Transactions with owners, recorded directly in
    equity        |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  |                  |  
|                                                                 |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  |                  |  
|Shares issued on exercise of ESOP                                |  |                   | 789       |  |                   |  | 4,540      |                                 |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  | 5,329            |  
|Call money received                                              |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  | -                |  
|Dividends paid (incl dividend distribution tax)                  |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                               |        |  |       |  | (223,602    | )                             |  |  | (223,602         | )
|Transaction costs related to equity                              |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  | -                |  
|Transferred from share based payment reserve on exercise of ESOP |  |                   |           |  |                   |  | 1,398      |                                 |  |  | (1,398                         | ) |  |                                               |        |  |       |  |             |                               |  |  | -                |  
|ESOP Expenses                                                    |  |                   |           |  |                   |  |            |                                 |  |  | 46,372                         |   |  |                                               |        |  |       |  |             |                               |  |  | 46,372           |  
|Balance at March 31, 2020                                        |  |                   | 1,805,047 |  |                   |  | 19,358,022 |                                 |  |  | 351,054                        |   |  |                                               | 93,617 |  |       |  | (10,256,432 | )                             |  |  | 11,351,308       |  



112







Sify Technologies Limited

Consolidated Statement of Changes in Equity

(In thousands of Rupees, except share data
and as otherwise stated)



For year ended March 31, 2019



|Particulars                                                              |  | Share
    capital |           |  | Share
    premium |  |            | Share based
                                         payment reserve |  |  | Other
    components of equity |   |  | Retained
    earnings / (accumulated deficit) |        |  | Total |  |             | Non-
    controlling interest |  |  | Total
    equity |  
|------------------------------------------------------------------------ |  | ----------------- | --------- |  | ----------------- |  | ---------- | -------------------------------------------------------------------- |  |  | ------------------------------ | - |  | --------------------------------------------- | ------ |  | ----- |  | ----------- | ----------------------------- |  |  | ---------------- | -
|Balance at April 1, 2018                                                 |  |                   | 1,518,413 |  |                   |  | 18,694,030 |                                                                      |  |  | 309,695                        |   |  |                                               | 33,635 |  |       |  | (11,550,820 | )                             |  |  | 9,004,953        |  
|                                                                         |  |                   |           |  |                   |  |            |                                                                      |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  |                  |  
|Change in accounting policy on adoption of IFRS 15                       |  |                   | -         |  |                   |  | -          |                                                                      |  |  | -                              |   |  |                                               | -      |  |       |  | (38,215     | )                             |  |  | (38,215          | )
|Total
                                 comprehensive income for the year |  |                   | -         |  |                   |  | -          |                                                                      |  |  | -                              |   |  |                                               | 20,978 |  |       |  | 1,068,703   |                               |  |  | 1,089,681        |  
|                                                                         |  |                   |           |  |                   |  |            |                                                                      |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  |                  |  
|Transactions with owners, recorded directly in
    equity                |  |                   |           |  |                   |  |            |                                                                      |  |  |                                |   |  |                                               |        |  |       |  |             |                               |  |  |                  |  
|Call money received                                                      |  |                   | 281,250   |  |                   |  | 618,750    |                                                                      |  |  | -                              |   |  |                                               | -      |  |       |  | -           |                               |  |  | 900,000          |  
|Shares issued on exercise of ESOP                                        |  |                   | 4,595     |  |                   |  | 30,854     |                                                                      |  |  | -                              |   |  |                                               | -      |  |       |  | -           |                               |  |  | 35,449           |  
|Dividends paid (incl dividend distribution tax)                          |  |                   | -         |  |                   |  | -          |                                                                      |  |  | -                              |   |  |                                               | -      |  |       |  | (217,875    | )                             |  |  | (217,875         | )
|Transferred from share based payment reserve                             |  |                   | -         |  |                   |  | 8,450      |                                                                      |  |  | (8,450                         | ) |  |                                               | -      |  |       |  | -           |                               |  |  | -                |  
|Share-based payment transactions                                         |  |                   | -         |  |                   |  | -          |                                                                      |  |  | 4,835                          |   |  |                                               | -      |  |       |  | -           |                               |  |  | 4,835            |  
|Balance at March 31, 2019                                                |  |                   | 1,804,258 |  |                   |  | 19,352,084 |                                                                      |  |  | 306,080                        |   |  |                                               | 54,613 |  |       |  | (10,738,207 | )                             |  |  | 10,778,828       |  



113







For year ended March 31, 2018



|Particulars                                               |  | Share
    capital |           |  | Share
    premium |  |            | Share
    based payment reserve |  |  | Other
    components of equity |   |  | Retained
    earnings /  (accumulated deficit) |        |  | Total |  |             | Non-
    controlling interest |  |  | Total
    equity |  
|--------------------------------------------------------- |  | ----------------- | --------- |  | ----------------- |  | ---------- | ------------------------------- |  |  | ------------------------------ | - |  | ---------------------------------------------- | ------ |  | ----- |  | ----------- | ----------------------------- |  |  | ---------------- | -
|Balance at April 1, 2017                                  |  |                   | 1,516,875 |  |                   |  | 18,680,731 |                                 |  |  | 305,539                        |   |  |                                                | 26,798 |  |       |  | (12,265,524 | )                             |  |  | 8,264,419        |  
|                                                          |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                                |        |  |       |  |             |                               |  |  |                  |  
|Total comprehensive income for the year                   |  |                   | -         |  |                   |  | -          |                                 |  |  | -                              |   |  |                                                | 6,837  |  |       |  | 923,401     |                               |  |  | 930,238          |  
|                                                          |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                                |        |  |       |  |             |                               |  |  |                  |  
|Transactions with owners, recorded directly in
    equity |  |                   |           |  |                   |  |            |                                 |  |  |                                |   |  |                                                |        |  |       |  |             |                               |  |  |                  |  
|Call money received                                       |  |                   | -         |  |                   |  | -          |                                 |  |  | -                              |   |  |                                                | -      |  |       |  | -           |                               |  |  | -                |  
|Shares issued on exercise of ESOP                         |  |                   | 1,538     |  |                   |  | 10,631     |                                 |  |  | -                              |   |  |                                                | -      |  |       |  | -           |                               |  |  | 12,169           |  
|Dividends paid (incl dividend distribution tax)           |  |                   | -         |  |                   |  | -          |                                 |  |  | -                              |   |  |                                                | -      |  |       |  | (208,697    | )                             |  |  | (208,697         | )
|Transferred from share based payment reserve              |  |                   | -         |  |                   |  | 2,668      |                                 |  |  | (2,668                         | ) |  |                                                | -      |  |       |  | -           |                               |  |  | -                |  
|Share-based payment transactions                          |  |                   | -         |  |                   |  | -          |                                 |  |  | 6,824                          |   |  |                                                | -      |  |       |  | -           |                               |  |  | 6,824            |  
|Balance at March 31, 2018                                 |  |                   | 1,518,413 |  |                   |  | 18,694,030 |                                 |  |  | 309,695                        |   |  |                                                | 33,635 |  |       |  | (11,550,820 | )                             |  |  | 9,004,953        |  



114







Sify Technologies Limited

Consolidated Statements of Cash Flows

For the fiscal years ended March 31,

(In thousands of Rupees, except share data
and as otherwise stated)



|                                                                   |  | Year ended March 31, |           |   |        | 
|------------------------------------------------------------------ |  | -------------------- | --------- | - | ------ | 
|                                                                   |  | 2020 ₹               |           |   | 2019 ₹ | 
|                                                                   |  |                      |           |   |        | 
|Profit for the year                                                |  |                      | 705,377   |   |        | 
|Adjustments for:                                                   |  |                      |           |   |        | 
|Depreciation and amortization                                      |  |                      | 2,290,777 |   |        | 
|(Gain) / loss on sale of property, plant and equipment             |  |                      | 10,158    |   |        | 
|Deposits/Advances no longer payable written back                   |  |                      | 43,957    |   |        | 
|Provision for doubtful receivables/ advances                       |  |                      | 479,747   |   |        | 
|Stock compensation expense                                         |  |                      | 46,372    |   |        | 
|Net finance (income) / expense                                     |  |                      | 860,256   |   |        | 
|Unrealized (gain)/ loss on account of exchange differences         |  |                      | 8,342     |   |        | 
|Amortization of leasehold prepayments                              |  |                      | -         |   |        | 
|Tax expense                                                        |  |                      | 314,339   |   |        | 
|Cash flow from operating activities before working capital changes |  |                      | 4,759,325 |   |        | 
|                                                                   |  |                      |           |   |        | 
|Change in trade and other receivables                              |  |                      | (289,830  | ) |        | 
|Change in inventories                                              |  |                      | 413,258   |   |        | 
|Change in Contract Assets                                          |  |                      | 17,521    |   |        | 
|Change in Contract Costs                                           |  |                      | 11,020    |   |        | 
|Change in Contract Liabilities                                     |  |                      | 140,378   |   |        | 
|Change in other assets                                             |  |                      | (561,037  | ) |        | 
|Change in trade and other payables                                 |  |                      | 235,332   |   |        | 
|Change in employee benefits                                        |  |                      | 17,888    |   |        | 
|Change in deferred income                                          |  |                      | -         |   |        | 
|Cash generated from operations                                     |  |                      | 4,743,855 |   |        | 
|Income taxes (paid)/ refund received                               |  |                      | 298,963   |   |        | 
|Net cash from / (used in) operating activities                     |  |                      | 5,042,818 |   |        | 



115







Sify Technologies Limited

Consolidated Statements of Cash Flows

For the fiscal years ended March 31,

(In thousands of Rupees, except share and
per share data and as otherwise stated)



|                                                                               |  | Year ended March 31, |            |   |       | 
|------------------------------------------------------------------------------ |  | -------------------- | ---------- | - | ----- | 
|                                                                               |  | 2020₹                |            |   | 2019₹ | 
|                                                                               |  |                      |            |   |       | 
|Cash flows from / (used in) investing activities                               |  |                      |            |   |       | 
|Acquisition of property, plant and equipment                                   |  |                      | (4,062,088 | ) |       | 
|Expenditure on intangible assets                                               |  |                      | (340,898   | ) |       | 
|Proceeds from sale of property, plant and equipment                            |  |                      | 11,242     |   |       | 
|Investments in corporate debt securities                                       |  |                      | -          |   |       | 
|Finance income received                                                        |  |                      | 164,012    |   |       | 
|Amount paid for acquisition of right of use assets                             |  |                      | (98,587    | ) |       | 
|Net cash from / (used in) investing activities                                 |  |                      | (4,326,319 | ) |       | 
|                                                                               |  |                      |            |   |       | 
|Cash flows from / (used in) financing activities                               |  |                      |            |   |       | 
|Proceeds from issue of share capital (including share premium)                 |  |                      | -          |   |       | 
|Proceeds from issue of shares on exercise of options (including share premium) |  |                      | 5,334      |   |       | 
|Proceeds from / (repayment) of  borrowings (net)                               |  |                      | 1,488,903  |   |       | 
|Repayment of lease liabilities                                                 |  |                      | (219,529   | ) |       | 
|Finance expenses paid                                                          |  |                      | (1,047,185 | ) |       | 
|Proceeds from / (repayment of) finance lease liabilities                       |  |                      | -          |   |       | 
|Payment of dividend and dividend distribution tax                              |  |                      | (223,602   | ) |       | 
|Net cash from / (used in) financing activities                                 |  |                      | 3,921      |   |       | 
|                                                                               |  |                      |            |   |       | 
|Net increase / (decrease) in cash and cash equivalents                         |  |                      | 720,420    |   |       | 
|Cash and cash equivalents at April 1                                           |  |                      | 694,771    |   |       | 
|Effect of exchange fluctuations on cash held                                   |  |                      | 100        |   |       | 
|Cash and cash equivalents at March 31                                          |  |                      | 1,415,291  |   |       | 



Refer note 3 (c) and note 8 for the composition
of cash and cash equivalents.



116









Disclosure relating
to changes in liabilities arising from financing activities – Refer note below



The
accompanying notes form an integral part of these consolidated financial statements



Note: Reconciliation of liabilities from financing
activities



|                |  |                      |           |  |          |  |           |           |  |  |                                   |   |  |                        |          |  | Non-cash movement   |  |           |                           | 
|--------------- |  | -------------------- | --------- |  | -------- |  | --------- | --------- |  |  | --------------------------------- | - |  | ---------------------- | -------- |  | ------------------- |  | --------- | ------------------------- | 
|Particulars     |  | As at April 01, 2019 |           |  | Proceeds |  |           | Repayment |  |  | Movement in Short term Borrowings |   |  | Net Cash flow movement |          |  | IFRS 16 adjustments |  |           | Foreign exchange movement | 
|Borrowings      |  |                      | 66,58,311 |  |          |  | 28,32,133 |           |  |  | (23,36,301                        | ) |  |                        | 9,93,101 |  |                     |  | 14,88,933 |                           | 
|Lease Liability |  |                      | 96,879    |  |          |  | -         |           |  |  | (2,19,529                         | ) |  |                        | -        |  |                     |  | (2,19,529 | )                         | 
|Total           |  |                      | 67,55,190 |  |          |  | 28,32,133 |           |  |  | (25,55,830                        | ) |  |                        | 9,93,101 |  |                     |  | 12,69,404 |                           | 





|                        |  |                      |           |  |          |  |           |           |  |  |                                   |   |  |                        |          |  | Non-cash movement         |  |           |                    | 
|----------------------- |  | -------------------- | --------- |  | -------- |  | --------- | --------- |  |  | --------------------------------- | - |  | ---------------------- | -------- |  | ------------------------- |  | --------- | ------------------ | 
|Particulars             |  | As at April 01, 2018 |           |  | Proceeds |  |           | Repayment |  |  | Movement in Short term Borrowings |   |  | Net Cash flow movement |          |  | Foreign exchange movement |  |           | Fair value changes | 
|Borrowings              |  |                      | 34,85,865 |  |          |  | 38,72,890 |           |  |  | (15,06,681                        | ) |  |                        | 7,67,636 |  |                           |  | 31,33,845 |                    | 
|Finance Lease Liability |  |                      | 1,85,965  |  |          |  | -         |           |  |  | (89,086                           | ) |  |                        | -        |  |                           |  | (89,086   | )                  | 
|Total                   |  |                      | 36,71,830 |  |          |  | 38,72,890 |           |  |  | (15,95,767                        | ) |  |                        | 7,67,636 |  |                           |  | 30,44,759 |                    | 



117







SIFY TECHNOLOGIES LIMITED

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

(In thousands of
Rupees, except share data and as stated otherwise)



| | 1. | Reporting entity
| | -- | ----------------



Sify Technologies Limited (‘Sify’
or ‘the Company’) is a Company domiciled in India. The address of the Company’s registered office is 2nd Floor,
TIDEL Park, 4, Rajiv Gandhi Salai, Taramani, Chennai – 600113, India. The Company and its subsidiaries Sify Technologies
(Singapore) Pte. Limited, Sify Technologies North America Corporation, Sify Data and Managed Services Limited and Sify Infinit
Spaces Limited (are together referred to as the ‘Group’ and individually as ‘Group entities’). The Group
offers converged ICT solutions comprising Network-centric services, Data Center-centric IT services which includes Data Center
services, cloud and managed services, applications integration services and technology integration services. The Company was incorporated
on December 12, 1995 and is listed on the NASDAQ Capital Market. The financial statements are for the Group consisting of Sify
Technologies Limited (the 'Company') and its subsidiaries.



| | 2. | Basis of preparation
| | -- | --------------------



| | a. | Statement of compliance
| | -- | -----------------------



The accompanying Consolidated Financial
Statements of the Group have been prepared in accordance with the International Financial Reporting Standards (IFRS) and its interpretations
as issued by the International Accounting Standards Board (IASB).



These Consolidated Financial Statements
have been approved for issue by the Board of Directors on July 27, 2020



| | b. | Basis of measurement
| | -- | --------------------



These Consolidated Financial Statements have
been prepared on the historical cost basis except for the following:



| | · | Derivative financial instruments are measured at fair value
| | - | -----------------------------------------------------------

| | · | Financial instruments at fair value through profit or loss are measured
at fair value.
| | - | --------------------------------------------------------------------------------------

| | · | Financial assets at fair value through other comprehensive income
are measured at fair value
| | - | --------------------------------------------------------------------------------------------

| | · | Share-based payments
| | - | --------------------

| | · | The defined benefit asset is recognized as the net total of the plan
assets, plus unrecognized past service cost and unrecognized actuarial losses, less unrecognized actuarial gains and the present
value of the defined benefit obligation.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In relation to lease prepayments, the initial fair value of the
                                                                                                          security deposit is estimated as the present value of the refundable amount, discounted using the market interest rates for
                                                                                                          similar instruments. The difference between the initial fair value and the refundable amount of the deposit is recognized as
                                                                                                          a Right of Use Asset and present value of lease liability
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The above items have been measured at fair
value and the methods used to measure fair values are discussed further in Note 4.



| | c. | Functional and presentation currency
| | -- | ------------------------------------



Items included in the financial statements
of each Group entity are measured using the currency of the primary economic environment in which the entity operates (“the
functional currency”). Indian rupee is the functional currency of Sify, its domestic subsidiaries. The U.S. dollar is the
functional currency of Sify’s foreign subsidiaries located in Singapore and the US.



The Consolidated Financial Statements are
presented in Indian Rupees which is the Group’s presentation currency. All financial information presented in Indian Rupees
has been rounded up to the nearest thousand except where otherwise indicated.



Convenience translation (unaudited):
Solely for the convenience of the reader, the financial statements as of and for the year ended March 31, 2020 have been translated
into United States dollars (neither the presentation currency nor the functional currency of the Group) based on the reference
rate in the City of Mumbai on March 31, 2020, for cable transfers in Indian rupees as published by the Reserve Bank of India which
was ₹ 75.386 per $1.00. No representation is made that the Indian rupee amounts have been, could have been or could be converted
into United States dollar at such a rate or at any other rate on March 31, 2020 or at any other date.



| | d. | Use of estimates and judgments
| | -- | ------------------------------



The preparation of Consolidated Financial
Statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent assets and contingent liabilities
at the date of financial statements, income and expenses during the period. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimates are revised and in future periods which are affected.



Application of accounting policies that
require critical accounting estimates, judgments and assumptions having the most significant effect on the amounts recognized in
the financial statements are:



| | · | Useful lives of property, plant and equipment (Note 3 e and Note 5)
| | - | -------------------------------------------------------------------

| | · | Useful lives of intangible assets (Note 3 g and Note 6)
| | - | -------------------------------------------------------

| | · | Estimate of Lease term and measurement of Right of Use Assets and Lease Liabilities (Note 3 h,
7, 9)
| | - | ----------------------------------------------------------------------------------------------------

| | · | Identification of performance obligation and timing of satisfaction of performance obligation,
measurement of transaction price on revenue recognition (Note 3 o)
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Measurement of the recoverable amounts of cash-generating units containing goodwill (Note 3 k and
Note 6)
| | - | ---------------------------------------------------------------------------------------------------------



118







| | · | Utilization of tax losses and computation of deferred taxes (Note 3 r, 11)
| | - | --------------------------------------------------------------------------

| | · | Measurement of defined employee benefit obligations (Note 17)
| | - | -------------------------------------------------------------

| | · | Measurement of share-based payments (Note 3 m, 27)
| | - | --------------------------------------------------

| | · | Valuation of financial instruments (Note 3 c, 4, 34 and 35)
| | - | -----------------------------------------------------------

| | · | Provisions and contingencies (Note 3 n and 31)
| | - | ----------------------------------------------

| | · | Expected Credit losses on Financial Assets (Note 3 c, 13)
| | - | ---------------------------------------------------------



Estimation uncertainty relating to global
health pandemic on COVID-19



Recoverability of receivables, contract assets
and contract costs, carrying amount of Property, Plant and Equipment and certain investments have all been assessed based on the
information available within the company and external sources such as credit reports and economic forecasts. The company has performed
impairment testing and assessed that the carrying amount of these assets will be recovered. The impact of global health pandemic
may be different from the date of approval of Financial Statements.



The company has assessed the external environment,
short term and long term liquidity position, company's mitigative actions regarding material uncertainties related to global health
pandemic on COVID-19 and the company expects these uncertainties do not cast significant doubt upon the ability of the company
to continue as going concern.



| | 3. | Significant accounting policies
| | -- | -------------------------------



The accounting policies set out below have
been applied consistently to all periods presented in these Consolidated Financial Statements



| | a. | Basis of consolidation
| | -- | ----------------------



The financial statements of the Group companies
are consolidated on a line-by-line basis. Intra-group balances and transactions, and any unrealized income and expenses arising
from intra-group transactions, are eliminated. These financial statements are prepared by applying uniform accounting policies
in use at the Group.



Subsidiaries are entities controlled by
the Company. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Thus, the Company controls an investee if and
only if the Company has all the following:

- power over the investee;

- exposure, or rights, to variable returns
from its involvement with the investee; and

- the ability to use its power over the investee
to affect the amount of the Company’s returns.



Generally, there is a presumption that
majority of voting rights results in control. To support this presumption and when the Group has less than a majority of voting
of similar rights of an investee, the group considers all relevant facts and circumstances in assessing whether it has power over
an investee.



The financial statements of subsidiaries
are consolidated from the date that control commences until the date that control ceases. The accounting policies of subsidiaries
have been changed where necessary to align them with the policies adopted by the Group.



| | b. | Foreign currency
| | -- | ----------------



(i) Foreign currency transactions
and balances



Transactions in foreign currencies are
initially recognized in the financial statements using exchange rates prevailing on the date of transaction. Monetary assets and
liabilities denominated in foreign currencies are translated to the relevant functional currency at the exchange rates prevailing
at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary assets
and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent
at the date of transaction. Foreign currency differences arising on translation are recognized in the income statement for determination
of net profit or loss during the period.



119







(ii)
Foreign operations



The assets and liabilities of foreign operations,
including goodwill and fair value adjustments arising on acquisition, are translated to the functional currency at exchange rates
at the reporting date. The income and expenses of foreign operations and cash flows are translated to Indian Rupees using average
exchange rates during the period. Any differences arising on such translation are recognized in other comprehensive income. Such
differences are included in the foreign currency translation reserve “FCTR” within other components of equity. When
a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss.



| | c. | Financial instruments
| | -- | ---------------------



(i) Financial Assets



Financial assets comprise of investments
in equity and debt securities, trade and other receivables, cash and cash equivalents and other financial assets.



Initial recognition:



All financial assets are recognized initially
at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets
within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade
date, i.e., the date that the Group commits to purchase or sell the asset.



Subsequent measurement:



Financial assets measured at amortized
cost:

Financial assets held within a business
model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
are measured at amortised cost using effective interest rate (EIR) method. The EIR amortisation is recognized as finance income
in the Statement of Income.



The Group while applying above criteria
has classified the following financial assets at amortised cost

- Trade receivables

- Other financial assets.

- Investment in debt securities



Financial assets at fair value through
other comprehensive income (FVTOCI):

Financial assets that are held within a
business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual
terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding are subsequently measured at FVTOCI. Fair value movements in financial assets at FVTOCI are recognized
in other comprehensive income.



Equity instruments held for trading are
classified as at fair value through profit or loss (FVTPL). For other equity instruments the Group classifies the same as at FVTOCI.
The classification is made on initial recognition and is irrevocable. Fair value changes on equity investments at FVTOCI, excluding
dividends, are recognized in other comprehensive income (OCI).



Financial assets at fair value through
profit or loss (FVTPL):

Financial asset are measured at fair value
through profit or loss if it does not meet the criteria for classification as measured at amortised cost or at fair value through
other comprehensive income. All fair value changes are recognized in the Statement of Income.



Derecognition of financial assets:

Financial assets are derecognized when
the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred and the transfer
qualifies for derecognition. On derecognition of a financial asset in its entirety, the difference between the carrying amount
(measured at the date of derecognition) and the consideration received (including any new asset obtained less any new liability
assumed) shall be recognized in the Statement of Income.



120







Impairment of financial assets:



Trade receivables, contract assets, lease
receivables under IFRS 9, investments in debt instruments that are carried at amortised cost, investments in debt instruments that
are carried at FVTOCI are tested for impairment based on the expected credit losses for the respective financial asset.



Trade receivables

An impairment analysis is performed at
each reporting date. The expected credit losses over lifetime of the asset are estimated by adopting the simplified approach using
a provision matrix which is based on historical loss rates reflecting current condition and forecasts of future economic conditions.
In this approach assets are grouped on the basis of similar credit characteristics such as industry, customer segment and other
factors which are relevant to estimate the expected cash loss from these assets.



Other financial assets

Other financial assets are tested for impairment
based on significant change in credit risk since initial recognition and impairment is measured based on probability of default
over the lifetime when there is significant increase in credit risk.



(ii) Financial liabilities



Financial liabilities are initially recognized
at fair value and any transaction cost that are attributable to the acquisition of the financial liabilities except financial liabilities
at fair value through profit or loss which are initially measured at fair value.



Subsequent measurement:



The financial liabilities are classified
for subsequent measurement into following categories:

- at amortised cost

- at fair value through profit or loss



Financial liabilities at amortised cost

The Group is classifying the following
financial liabilities at amortised cost;

a) Borrowings

b) Finance lease obligations

c) Trade and other payables

d) Other financial liabilities



Amortised cost for financial liabilities
represents amount at which financial liability is measured at initial recognition minus the principal repayments, plus or minus
the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity
amount.



Financial liabilities at fair value
through profit or loss

Financial liabilities held for trading
are measured at FVTPL.



Derecognition of financial liabilities:



A financial liability shall be derecognized
when, and only when, it is extinguished i.e. when the obligation specified in the contract is discharged or cancelled or expires.



(iii) Derivative financial instruments



Foreign exchange forward contracts and
options are entered into by the Group to mitigate the risk of changes in foreign exchange rates associated with certain payables,
receivables and forecasted transactions denominated in certain foreign currencies. The group also enters into cross currency interest
rate swaps for hedging the risk against variability in cash flows of its term loan.



121







These derivative contracts do not qualify
for hedge accounting under IFRS 9 and are initially recognized at fair value on the date the contract is entered into and subsequently
re-measured at their fair value. Gains or losses arising from changes in the fair value of the derivative contracts are recognized
immediately in profit or loss.



(iv) Offsetting of Financial Assets
and Financial Liabilities



Financial assets and liabilities are offset
and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset
the amounts and intends either to settle on a net basis or to realize the assets and settle the liability simultaneously.



(v) Reclassification of financial assets



The Group determines classification of
financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets
which are categorised as equity instruments at FVTOCI and financial assets or liabilities that are specifically designated as FVTPL.
For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for
managing those assets. Changes to the business model are expected to be very infrequent. The management determines change in the
business model as a result of external or internal changes which are significant to the Group’s operations. A change in the
business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the
Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the
first day of the immediately next reporting period following the change in business model. The Group does not restate any previously
recognized gains, losses (including impairment gains or losses) or interest.



| | d. | Share capital
| | -- | -------------



Ordinary
shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or share options are
recognized as a deduction from equity, net of any tax effects.



| | e. | Property, plant and equipment
| | -- | -----------------------------



Property, plant and equipment is stated
at cost less accumulated depreciation and where applicable accumulated impairment losses. Cost of an item of property, plant and
equipment comprises its purchase price, including import duties and non-refundable purchases taxes, after deducting trade discounts
and rebates and includes expenditure directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials, direct labor and any other costs directly attributable to bringing the asset to a working condition
for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased
software that is integral to the functionality of the related equipment is capitalized as part of that equipment.



When parts of an item of property, plant
and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.



Interest cost incurred for constructed
assets is capitalized up to the date the asset is ready for its intended use, based on borrowings incurred specifically for financing
the asset or the weighted average rate of all other borrowings, if no specific borrowings have been incurred for the asset.



Gains and losses on disposal of an item
of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant
and equipment and are recognized net within “other income / other expenses” in statement of income.



The cost of assets not put to use as on
balance sheet date are disclosed under Construction-in-progress.



(i) Subsequent costs



The cost of replacing part of an item of
property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part
is de-recognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in statement of income
during the period in which it is incurred.



122







(ii)
Depreciation



Depreciation is recognized in the consolidated
statement of income on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Group will obtain ownership by the end of the lease term. Management’s estimated useful lives for the years ended March 31,
2020, 2019 and 2018 were as follows:



|                                                       | Estimate of  useful life
in years
|------------------------------------------------------ | ---------------------------------
|Buildings                                              | 28                               
|Plant and machinery comprising computers, servers etc. | 3 – 5                            
|Plant and machinery comprising other items             | 8                                
|Furniture and fittings                                 | 5                                
|Office equipment                                       | 5                                
|Motor vehicles                                         | 3                                



Depreciation is not recorded on construction-in-progress
until construction and installation are complete and the asset is ready for its intended use.



The depreciation
method, useful lives and residual value are reviewed at each of the reporting date



| | f. | Business combinations
| | -- | ---------------------



(i) Business combinations



Business combinations are accounted for
using IFRS 3 (Revised), Business Combinations. IFRS 3 requires the identifiable intangible assets and contingent consideration
to be fair valued in order to ascertain the net fair value of identifiable assets, liabilities and contingent liabilities of the
acquiree. Significant estimates are required to be made in determining the value of contingent consideration and intangible assets.
These valuations are conducted by independent valuation experts.



Business combinations have been accounted
for using the acquisition method under the provisions of IFRS 3(Revised). The cost of acquisition is measured at the fair value
of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition. The cost of
acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.



Transactions costs that the group incurs
in connection with a business combination such as finder’s fees, legal fees, due diligence fees, and other professional and
consulting fees are expensed as incurred.



The acquisition of an asset or a group
of assets that does not constitute a ‘business’ as per IFRS 3 is accounted for by identifying and recognizing the individual
identifiable assets acquired and liabilities assumed. The cost of the group is allocated to such individual identifiable assets
and liabilities on the basis of their relative fair values on the date of purchase.



(ii) Goodwill



Goodwill represents the cost of a business
acquisition in excess of the Group's interest in the net fair value of identifiable assets, liabilities and contingent liabilities
of the acquiree. When the excess is negative (negative goodwill), the Group reassesses the identification and measurement of identifiable
assets, liabilities and contingent liabilities, and the measurement of the cost of acquisition, and recognizes any remaining excess
in profit or loss immediately on acquisition.



123







Subsequent measurement



Goodwill is measured at cost less accumulated
impairment losses.



g. Other intangible assets



Other intangible assets that are acquired
by the Group, which have finite useful lives, are measured at cost less accumulated amortization and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the intangible asset.



(i)
Subsequent expenditure



Subsequent expenditure is capitalized only
when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including
expenditure on internally generated goodwill and brands, are recognized in profit or loss as incurred.



(ii)
Amortization of intangible assets with finite useful lives



Amortization is recognized in profit or
loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they
are available for use. The estimated useful lives for the current and previous year are as follows:



|                        | Estimate of useful life in
years
|----------------------- | --------------------------------
|Software                | 1 – 3                           
|Undersea cable capacity | 12                              
|Other Intangibles       | 3  -  5                         



Amortization methods, useful lives and
residual values are reviewed at each reporting date and adjusted if appropriate.



| | h. | Leases
| | -- | ------



The Group as a lessee



The Group’s lease asset classes primarily
consist of leases for land and buildings. The group assesses whether a contract contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group
assesses whether: (1) the contract involves the use of an identified asset (2) the group has substantially all of the economic
benefits from use of the asset through the period of the lease and (3) the group has the right to direct the use of the asset.



At the date of commencement of the lease,
the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in
which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these
short-term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over
the term of the lease.



Certain lease arrangements includes the
options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options
when it is reasonably certain that they will be exercised.



The right-of-use assets are initially recognized
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated
depreciation and impairment losses.



Right-of-use assets are depreciated from
the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right
of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts
may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are
largely independent of those from other assets.



124







The lease liability is initially measured
at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of the
leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the group changes
its assessment if whether it will exercise an extension or a termination option.



Lease liability and ROU asset have been
separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.



The Group as a lessor



Leases for which the group is a lessor
is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.



When the Group is an intermediate lessor,
it accounts for its interests in the head lease and the sub-lease separately. The sublease is classified as a finance or operating
lease by reference to the right-of-use asset arising from the head lease.



For operating leases, rental income is
recognized on a straight line basis over the term of the relevant lease.



| | i. | Inventories
| | -- | -----------



Inventories comprising traded hardware
and software are measured at the lower of cost (determined using first-in first-out method) and net realizable value. Cost comprises
cost of purchase and all directly attributable costs incurred in bringing the inventories to their present location and condition.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.



j. Contract assets/liability



Contract Assets (Unbilled revenue) represents
revenue in excess of billing. Contract Liability (Deferred income) represents unserviced portion of billed contracts.



k.
Impairment of non-financial assets



The carrying amounts of the Group’s
non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill,
the recoverable amount is estimated each year at December 31.



The recoverable amount of an asset or cash-generating
unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually
are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent
of the cash inflows of other assets or groups of assets (the “cash-generating unit”).



The goodwill acquired in a business combination,
for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of
the combination. Corporate assets for the purpose of impairment testing are allocated to the cash generating units on a reasonable
and consistent basis.



An impairment loss is recognized if the
carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized
in profit or loss. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit or group of
units on a pro rata basis.



125







Reversal of impairment loss



An impairment loss in respect of goodwill
is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date
for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized directly in other comprehensive income and presented within equity.



l.
Employee benefits



Employee benefits are accrued in the period
in which the associated services are rendered by employees of the Group, as detailed below:



| | (a) | Defined contribution plan (Provident fund)
| | --- | ------------------------------------------



Defined contribution plans are post-employment
benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive
obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee
service in the current and prior periods. The Group makes specified monthly contribution towards Government administered provident
fund scheme. The Group also contributes to 401(K) plan on behalf of eligible employees. Obligations for contributions to defined
contribution plans are recognized as an employee benefit expense in profit and loss in the periods during which the related services
are rendered by employees.



| | (b) | Defined benefit plans (Gratuity)
| | --- | --------------------------------



In accordance with applicable Indian laws,
the Group provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn
salary and years of employment with the Group. The gratuity fund is managed by the Life Insurance Corporation of India (LIC). The
Group's net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees
have earned in the current and prior periods, discounting that amount and deducting any unrecognized past service cost and the
fair value of any plan assets.



The discount rate is the yield at the reporting
date on risk free government bonds that have maturity dates approximating the terms of the Group’s obligations. The calculation
is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit
to the Group, the recognized asset is limited to the total of any unrecognized past service costs and the present value of economic
benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan.



Remeasurements of the net defined benefit
liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest), are recognized in other comprehensive
income and presented within equity. Remeasurements are not reclassified to profit or loss in subsequent periods. Service costs,
net interest expenses and other expenses related to defined benefit plans are recognized in profit or loss.



| | (c) | Short term benefits
| | --- | -------------------



Short-term employee benefit obligations
are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount
expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.



| | (d) | Compensated leave of absence
| | --- | ----------------------------



The employees of the Group are entitled
to compensated absence. The employees can carry forward a portion of the unutilized accrued absence and utilize it in future periods
or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence. The Group
recognizes an obligation for compensated absences in the period in which the employee renders the services. The Group provides
for the expected cost of compensated absence in the Statement of Income as the additional amount that the Group expects to pay
as a result of the unused entitlement that has accumulated based on actuarial valuations carried out by an independent actuary
at the balance sheet date.



126







| | m. | Share-based payment transactions
| | -- | --------------------------------



The fair value of options on grant date,
(equity-settled share based payments) granted to employees is recognized as an employee expense, with a corresponding increase
in equity, over the period in which the options are vested. The increase in equity recognized in connection with a share based
payment transaction is presented as a separate component in equity. The amount recognized as an expense is adjusted to reflect
the actual number of share options that vest. In respect of options whose terms and conditions are modified, the Group includes
the incremental fair value of the options in the measurement of the amounts recognized for services received from the employees.
The incremental fair value is the difference between the fair value of the modified option and that of the original option both
estimated as at the date of the modification. If the modification occurs during the vesting period, the incremental fair value
granted is included in the measurement of the amount recognized for services received over the period from the modification date
until the date when the modified equity instruments vest, in addition to the amount based on the grant date fair value of the original
equity instruments, which is recognized over the remainder of the original vesting period. If the modification occurs after vesting
date, the incremental fair value granted is recognized immediately, or over the vesting period if the employee is required to complete
an additional period of service before becoming unconditionally entitled to those modified equity instruments.



| | n. | Provisions
| | -- | ----------



Provisions are recognized if, as a result
of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that
an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material,
provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.



A provision for onerous contracts is recognized
when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract
and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment
loss on the assets associated with that contract.



| | o. | Revenue Recognition
| | -- | -------------------



The Group derives revenue from converged
ICT solutions comprising Network-centric services, Data Center-centric IT services which includes Data Center services, cloud and
managed services, applications integration services and technology integration services.



The Group has adopted IFRS 15 Revenue from
Contracts with Customers with effect from April 1, 2018 by using the cumulative effect transition method and accordingly comparatives
have not been retrospectively adjusted. The effect on adoption of IFRS 15 on initial application of Rs. 38,215 has been adjusted
in the opening retained earnings.



The Group recognizes revenue when its customer
obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive
in exchange for those goods or services excluding the amount collected on behalf of third parties. Refer note 3(o) Significant
accounting policies in the 2018 Annual Report in Form 20F for the previous revenue recognition policies.



127







The revenue recognition in respect of the
various streams of revenue is described as follows



| | (i) | Network services*
| | --- | -----------------



Revenue from Network services includes
Data network services and Voice services. Network services primarily include revenue from connectivity services, NLD/ILD services
and to a lesser extent, revenues from the setup and installation of connectivity links. The group provides connectivity for a fixed
period of time at a fixed rate regardless of usage. Revenue from Network services are series of distinct services. The performance
obligations are satisfied overtime.



Service revenue is recognized when services
are provided, based upon period of time. The setup and installation of connectivity links are deferred and recognized over the
associated contract period.



Sale of equipment are accounted as separate
performance obligations if they are distinct and its related revenues are recognized at a point in time when the control is passed
on to the customer.



The Group provides NLD (National Long Distance)
and ILD (International Long Distance) services through Group’s network. The Group carries voice traffic, both national and
international, using the network back-bone and delivers voice traffic to Inter-connect



Operators. Revenue is recognized when the
services are provided based upon the usage (eg: metered call units of voice traffic terminated on the Group’s network).



* The word telecom was largely understood
as providing telecommunication services to consumers and also mobility services. Since the company services were not relating to
either consumer services or mobility services and that company services were limited to enterprise data network, and services on
the data network that spawns multiple services relating to Network Connectivity, the said Telecom services will henceforth be referred
for appropriate representation of the substance, as Network services and all businesses dependent on the Network infrastructure
will be collectively referred to as Network Centric Services



| | (ii) | Data Center Services:
| | ---- | ---------------------



Revenue from DC services consists co-location
of racks and power charges. The contracts are mainly for a fixed rate for a period of time. Revenue from co-location of racks,
power charges and cross connect charges are series of distinct services. The performance obligations are satisfied overtime. Service
revenue is recognized as the related services are performed. Sale of equipment such as servers, switches, networking equipment,
cable infrastructure and racks etc are accounted as separate performance obligations if they are distinct and its related revenues
are recognized at a point in time when the control is passed on to the customer.



| | (iii) | Cloud and Managed Services:
| | ----- | ---------------------------



Revenue from Cloud and managed services
include revenue from Cloud and storage solutions, managed services, value added services, domestic and International managed services.



Revenues from Cloud and on demand compute
and storage, are primarily fixed for a period of time. Revenue from Cloud and managed services are series of distinct services.
The performance obligations are satisfied overtime. The group recognize service revenue as the related services are performed.



Revenues from domestic and international
managed services, comprise of value added services, operations and maintenance of projects and from remote infrastructure management.
Contracts from this segment are fixed and could also be based on time and material contracts.



In the case of time and material contracts,
the group recognizes service revenue as the related services are performed.



In the case of fixed price contract, the
group recognize revenue over a period of time based on progress towards completion of performance obligation using efforts or cost
to cost measure of progress (percentage completion method of accounting).



The stage of completion is measured by
efforts spent to estimated total efforts over the term of the contract.



| | (iv) | Technology Integration Services:
| | ---- | --------------------------------



Revenue from Technology Integration Services
include system integration Services, revenue from construction of Data Centers, network services, security solutions and to a lesser
extent, revenue from sale of hardware and software.



Revenue from construction contract includes
revenue from construction of Data Centers to the specific needs and design of the customer. The Group recognize revenue at point
in time, when the customer does not take control of work-in-progress or over a period of time when the customer controls the work-in-progress.
In the case where revenue is recognized over a period of time and progress is measured based on the costs incurred to date as a
percentage of the total estimated costs to fulfill the contract.



If the Group does not have a sufficient
basis to measure the progress of completion or to estimate the total contract revenues and costs, revenue is recognized only to
the extent of contract cost incurred for which recoverability is probable.



128







When total cost estimates exceed revenues
in an arrangement, the estimated losses are recognized in the statement of Income in the period in which such losses become probable
based on the current contract estimates.



| | (v) | Applications Integration Services:
| | --- | ----------------------------------



Revenue from Applications Integration services
include online assessment, document management services, web development, digital certificate based authentication services, supply
chain software and eLearning software development services. eLearning software development services consist of structuring of content,
developing modules, delivery and training users in the modules developed.



Revenue from Applications Integration Services
is recognized over a period of time. The progress is measured based on the amount of time/effort spent on a project. Revenue in
relation to ‘time’ is measured as the agreed rate per unit of time multiplied by the units of time expended. The element
of revenue related to materials is measured in accordance with the terms of the contract.



The Group enters into contracts with customers
to serve advertisements in the portal and the Group is paid on the basis of impressions, click-throughs or leads and in each case
the revenue is recognized ratably over the period of the contract based upon the usage (i.e on actual impressions/click throughs
/ leads delivered.)



Revenue from commissions earned on electronic
commerce transactions are recognized when the transactions are completed.



Digital Certification revenues include
income received on account of Web certification. Generally the Group does not hold after sale service commitments after the activation
of the Digital Certificates sold and accordingly, revenue is recognized fully on the date of activation of the respective certificate.



Multiple deliverable arrangements



In certain cases, some elements belonging
to the services mentioned above are sold as a package consisting of all or some of the elements.



The Group accounts for goods or services
of the package separately if they are distinct. i.e if a good or service is separately identifiable from other promises in the
contract and if the customer can benefit from the good or service either on its own or together with other resources that are readily
available to the customer.



The Group allocate the transaction price
to each performance obligation identified in the contract on a relative stand-alone selling price basis. Standalone selling price
is the price at which group would sell a promised good or service separately to the customer.



If the relative stand-alone selling prices
are not available, the group estimates the same. In doing so, the group maximise the use of observable inputs and apply estimation
methods consistently in similar circumstances.



Contract Cost



Costs to fulfil customer contracts i.e
the costs relate directly to a contract or to an anticipated contract that the Group can specifically identify or the costs generate/
enhance resources of the group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future
or the costs that are expected to be recovered are recognized as asset and amortized over the contract period.



Incremental costs of obtaining a contract
are recognized as assets and amortized over the contract period if entity expects to recover those costs. The Group recognize incremental
cost of obtaining a contract as an expense when incurred if the amortisation period of the asset that the entity otherwise would
have recognized is one year or less.



Costs to obtain a contract that is incurred
regardless of whether the contract is obtained are recognized as an expense when incurred, unless those costs are explicitly chargeable
to the customer regardless of whether the contract is obtained.



129







Significant judgments on applying
IFRS 15



The group contracts with customer include
promises or arrangements to transfer multiple goods or services to a customer. The group assess whether such arrangements in the
contract has distinct goods or services (performance obligation). Identification of distinct performance obligation involves judgment
to determine ability of customer to benefit independently from other promises in the contract.



The judgment is required to measure the
transaction price for the contract. The transaction price is the amount of consideration to which an entity expects to be entitled
in exchange for transferring promised goods or services to a customer. The consideration could be fixed amount or variable amount
or could be both. Transaction price could also be adjusted for time value of money if contract includes a significant financing
component.



In the case of multiple arrangements in
a contract, the group allocate transaction price to each performance obligation based on standalone transaction price. The determination
of standalone transaction price involves judgment.



The group uses judgment in determining
timing of satisfaction of performance obligation. The group considers how customer benefits from goods or services as the services
are rendered, who controls as the assets is created or enhanced, whether asset has an alternate use and the entity has an enforceable
right to payment for performance completed to date, transfer of significant risk and reward to the customer, acceptance or sign
off from the customer etc.,



The group uses judgement when capitalising
the contract cost as to whether it generates or enhances resources of the entity that will be used in satisfying performance obligation
in the future.



| | p. | Finance income
| | -- | --------------



Finance income comprises interest income
on funds invested, dividend income and gains on the disposal of financial assets at fair value through profit or loss. Interest
income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit
or loss on the date when the Group’s right to receive payment is established, which in the case of quoted securities is the
ex-dividend date.



| | q. | Finance expense
| | -- | ---------------



Finance expense comprises borrowing costs,
bank charges, unwinding of discount on provision, fair value losses on financial assets at fair value through profit or loss that
are recognized in Statement of Income. Fair value changes attributable to hedged risk are recognized in the Statement of Income.



Borrowing costs

Borrowing costs are interest and other
costs (including exchange difference relating to foreign currency borrowings to the extent that they are regarded as an adjustment
to interest costs) incurred in connection with the borrowing of funds. Interest expense is recognized using effective interest
method.



Borrowing costs that are directly attributable
to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing
costs are recognized as expenses in the period in which they are incurred. To the extent the Group borrows funds generally and
uses them for the purpose of obtaining a qualifying asset, the Group determines the amount of borrowings costs eligible for capitalization
by applying a capitalization rate to the expenditure incurred on such asset. The capitalization rate is determined based on the
weighted average of borrowing costs applicable to the borrowings of the Group which are outstanding during the period, other than
borrowings made specifically towards purchase of the qualifying asset. The amount of borrowing costs that the Group capitalizes
during a period does not exceed the amount of borrowing costs incurred during that period.



130







| | r. | Income taxes
| | -- | ------------



Income
tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it
relates to items recognized directly in equity or in other comprehensive income. Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted or substantively enacted at the reporting date. Minimum Alternate Tax (MAT)
is accounted as current tax when the Company is subjected to such provisions of the Income Tax Act. However, credit of such MAT
paid is available when the Company is subjected to tax as per normal provisions in the future. Credit on account of MAT is recognized
as a deferred tax asset based on the management’s estimate of its recoverability in the future.



Deferred
tax is recognized using the balance sheet method, providing for temporary differences between the carrying amount of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the
following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss and differences relating to investments in subsidiaries and associates
to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized
for taxable temporary differences arising on the initial recognition of goodwill, as the same is not deductible for tax purposes.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realized simultaneously.



A deferred
tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary
difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realized.



Deferred taxation arising on investments
in subsidiaries and associates is recognized except where the Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred taxation arising on the temporary
differences arising out of undistributed earnings of the equity method accounted investee is recorded based on the management's
intention. If the intention is to realize the undistributed earnings through sale, deferred tax is measured at the capital gains
tax rates that are expected to be applied to temporary differences when they reverse. However, when the intention is to realize
the undistributed earnings through dividend, the Group’s share of the income and expenses of the equity method accounted
investee is recorded in the statement of income, after considering any taxes on dividend payable by the equity method accounted
investee.



| | s. | Earnings per share
| | -- | ------------------



The Group presents basic and diluted earnings
per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders
by the weighted average number of ordinary shares outstanding during the period. Where ordinary shares are issued but not fully
paid, they are treated in the calculation of basic earnings per share as a fraction of an ordinary share to the extent that they
were entitled to participate in dividends during the period relative to a fully paid ordinary share. Diluted EPS is determined
by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding
for the effects of all dilutive potential ordinary shares, which includes share options granted to employees. To the extent that
partly paid shares are not entitled to participate in dividends during the period they are treated as the equivalent of warrants
or options in the calculation of diluted earnings per share.



| | t. | Dividend distribution to equity shareholders
| | -- | --------------------------------------------



Dividend distributed to Equity shareholders
is recognized as distribution to owners of capital in the Statement of Changes in Equity, in the period in which it is paid.



| | u. | Current/ non-current classification
| | -- | -----------------------------------



An asset is classified as current if:

(a) it is expected to be realized or sold
or consumed in the Group's normal operating cycle;

(b) it is held primarily for the purpose of
trading;

(c) it is expected to be realized within twelve
months after the reporting period; or

(d) it is cash or a cash equivalent unless
it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.



All other assets are classified as non-current.



131







A liability is classified as current if:

(a) it is expected to be settled in normal
operating cycle;

(b) it is held primarily for the purpose of
trading;

(c) it is expected to be settled within twelve
months after the reporting period;

(d) it has no unconditional right to defer
the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.



The operating cycle is the time between acquisition
of assets for processing and their realisation in cash and cash equivalents. The Group's normal operating cycle is twelve months.



| | v. | Recent accounting pronouncements
| | -- | --------------------------------



| | (i) | New and amended Standards adopted by the Group
| | --- | ----------------------------------------------



Except for the changes mentioned below,
the Group has consistently applied the accounting policies to all the periods



a) IFRS 16 – Leases



Effective April 1, 2019, the Group adopted
IFRS 16 “Leases” and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective
method. Consequently, the group recorded the lease liability at the present value of the lease payments discounted at the incremental
borrowing rate and the right of use asset at an amount equal to the lease liability adjusted by the amount of any prepaid or accrued
lease payments relating to that lease recognized in the balance sheet immediately before the date of Initial application. Comparatives
as at and for the year ended March 31, 2019 have not been retrospectively adjusted and therefore will continue to be reported under
the accounting policies included as part of our Annual Report for year ended March 31, 2019



On transition, the adoption of the new
standard resulted in recognition of “Right of Use” asset of ₹3,997 Million, and a lease liability of ₹1,787
Million. The effect of this adoption is insignificant on the operating profit, net profit for the period and earnings per share.
IFRS 16 will result in an increase in cash inflows from operating activities and an increase in cash outflows from financing activities
on account of lease payments.



The weighted average incremental borrowing
rate applied to lease liabilities as at April 1, 2019 is 9.5%



The following is the summary of practical
expedients elected on initial application:

1. Applied a single discount rate to a
portfolio of leases of similar assets in similar economic environment with a similar end date

2. Applied the exemption not to recognize
right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application

3. Excluded the initial direct costs from
the measurement of the right-of-use asset at the date of initial application.

4. Applied the practical expedient to grandfather
the assessment of which transactions are leases. Accordingly, IFRS 16 is applied only to contracts that were previously identified
as leases under IAS 17.



The company recognized depreciation on
"Right of Use" assets of ₹468.7 Million and interest from lease liabilities of ₹171.8 Million during the
period



Detailed information given in Right of
Use Assets Note.



The difference between the lease obligation
disclosed as of March 31, 2019 under IAS 17 and the value of the lease liabilities as of April 1, 2019 is primarily on account
of practical expedients exercised for low value assets and short term leases, inclusion of extension and termination options reasonably
certain to be exercised, in measuring the lease liability in accordance with IFRS 16 and discounting the lease liabilities to the
present value under IFRS 16



132







| | b) | IAS 12 - Income Taxes
| | -- | ---------------------



IFRIC 23 on Uncertainty over Income tax
treatments is effective from April 1, 2019. IFRIC 23 to Income Taxes clarifies the accounting for uncertainties in income taxes.
The appendix is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits
and tax rates, when there is uncertainty over income tax treatments under IAS 12. The adoption of this appendix did not have any
material impact on the consolidated financial statement of the company.



Additionally, there were amendment to IAS
12. The amendments clarify that an entity shall recognize the income tax consequences of dividends on financial instruments classified
as equity should be recognized according to where the entity originally recognized those past transactions or events that generated
distributable profits were recognized. The adoption of amendment to IAS 12 did not have any impact on consolidated financial statements
of the Company



| | c) | IAS 19 - Employee Benefits
| | -- | --------------------------



Amendments to IAS 19, ‘Employee Benefits’
we issued, in connection with accounting for plan amendments, curtailments and settlements requiring an entity to determine the
current service costs and the net interest for the period after the remeasurement using the assumptions used for the remeasurement;
and determine the net interest for the remaining period based on the remeasured net defined benefit liability or asset. The adoption
of amendment to IAS 19 did not have any material impact on consolidated financial statements of the Company.



| | (ii) | New and amended Standards issued but not yet effective
| | ---- | ------------------------------------------------------



Amendment to IFRS
3 - Business combination



On October 22,
2018, the IASB issued amendments to IFRS 3, ‘Business Combinations’, in connection with clarification of business definition,
which help in determining whether an acquisition made is of a business or a group of assets. The amendment added a test that makes
it easier to conclude that a company has acquired a group of assets, rather than a business, if the value of the assets acquired
is substantially all concentrated in a single asset or a group of similar assets. These amendments are effective for annual reporting
periods beginning on or after January 1, 2020, with earlier application permitted. The adoption of amendment to IFRS 3 is
not expected to have any impact on the consolidated financial statements of the Company.



Amendment to IFRS
9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform



On September 26,
2019, the IASB amended some of its requirements for hedge accounting. The amendments provide relief from potential effects of the
uncertainty caused by the IBOR reform. In addition, the amendments require companies to provide additional information to investors
about their hedging relationships that are directly affected by these uncertainties. These amendments are effective for annual
reporting periods beginning on or after January 1, 2020, with earlier application permitted. The Company does not expect the
amendment to have any significant impact on its consolidated financial statements.



Amendment to IAS
1 and IAS 8 – Definition of Material



On October 30,
2018, the IASB issued Amendment to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors to update a new definition of material in IAS 1. The amendments clarify the definition
of “material” and how it should be applied by including in the definition guidance that until now has featured elsewhere
in IFRS Standards. The new definition clarifies that, information is considered material if omitting, misstating, or obscuring
such information, could reasonably be expected to influence the decisions that the primary users of general-purpose financial statements
make on the basis of those financial statements. The definition of material in IAS 8 has been replaced by a reference to the definition
of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of material
or refer to the term ‘material’ to ensure consistency. These amendments are effective prospectively for annual reporting
periods beginning on or after January 1, 2020, with earlier application permitted. The Company does not expect the amendment
to have any material impact on its evaluation of materiality in relation to its consolidated financial statements.



Amendment to IAS
1 – Presentation of Financial Statements



On January 23,
2020, the IASB has issued “Classification of liabilities as Current or Non-Current (Amendments to IAS 1)”
providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangement in place
at the reporting date. The amendments aim to promote consistency in applying the requirements by helping companies to determine
whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified
as current (due or potentially due to be settled within one year) or non-current. The amendments also clarified the classification
requirements for debt a company might settle by converting it into equity. These amendments are effective for annual reporting
periods beginning on or after January 1, 2022 and are to be applied retrospectively, with earlier application permitted. The
Company is currently evaluating the impact of amendment to IAS 1 on its consolidated financial statements.



133







Amendment to IAS
37 – Onerous Contracts – Cost of Fulfilling a Contract



On May 14,
2020, the IASB issued “Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37)”, amending the
standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
The amendment specifies that the “cost of fulfilling” a contract comprises the “costs that relate directly to
the contract”. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an
allocation of other costs that relate directly to fulfilling contracts. These amendments are effective for annual reporting periods
beginning on or after January 1, 2022, with earlier application is permitted. The Company is currently evaluating the impact
of amendment to IAS 37 on its consolidated financial statements.



Amendment to IFRS
16 – Leases



On May 15,
2020, the IASB issued amendments to IFRS 16, “Leases”, provide lessees with an exemption from assessing whether a Covid-19-related rent
concession is a lease modification. The amendments allowed the expedient to be applied to Covid-19-related rent concessions
to payments originally due on or before 30 June 2021 and also require disclosure of the amount recognized in profit or loss
to reflect changes in lease payments that arise from Covid-19-related rent concessions. The reporting period in which
a lessee first applies the amendment, it is not required to disclose certain quantitative information required under IAS 8. These
amendments are effective for periods beginning on or after June 1, 2020, with earlier application is permitted. The Company
is currently evaluating the impact of amendment to IFRS 16 on its consolidated financial statements.



| | 4. | Determination of fair values
| | -- | ----------------------------



A number of the Group’s accounting
policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer
the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in
the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible
to the Group.



The fair value of an asset or a liability
is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.



A fair value measurement of a non-financial
asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best
use or by selling it to another market participant that would use the asset in its highest and best use.



The Group uses valuation techniques that
are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.



All assets and liabilities for which fair
value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest
level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:



Level 1 - unadjusted quoted prices in active
markets for identical assets and liabilities.

Level 2 - Inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - unobservable inputs for the asset
or liability.



For assets and liabilities that are recognized
in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels
in the hierarchy by re-assessing categorisation at the end of each reporting period.



For the purpose of fair value disclosures,
the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or
liability and the level of fair value hierarchy.



134







Fair values have been determined for measurement
and / or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in
determining fair values is disclosed in the notes specific to that asset or liability.



| | (i) | Property, plant and equipment
| | --- | -----------------------------



The fair value of property, plant and equipment
recognized as a result of a business combination is an estimated amount for which a property could be exchanged on the date of
acquisition in an orderly transaction between market participants. The fair value of items of plant, equipment, fixtures and fittings
is based on the market approach and cost approach using quoted market prices for similar items when available and replacements
costs when appropriate.



| | (ii) | Inventories
| | ---- | -----------

The fair value of inventories acquired in
a business combination is determined based on the estimated selling price in the ordinary course of business less the estimated
costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.



| | (iii) | Intangible assets
| | ----- | -----------------

The fair value of intangible assets acquired
in the business combinations is based on discounted cash flows expected to be derived from the use and eventual sale of assets
(terminal value).



| | (iv) | Investments in equity and debt securities
| | ---- | -----------------------------------------

The fair value is determined by reference
to their quoted price at the reporting date. In the absence of quoted price, the fair value of the financial asset is measured
using valuation techniques.



| | (v) | Trade and other receivables
| | --- | ---------------------------

The fair value of trade and other receivables
expected to be realized beyond twelve months, excluding construction contracts in progress, is estimated as the present value of
future cash flows, discounted at the market rate of interest at the reporting date. However in respect of such financial instruments,
fair value generally approximates the carrying amount due to the short term nature of such assets. This fair value is determined
for disclosure purposes or when acquired in a business combination.



| | (vi) | Derivatives
| | ---- | -----------

The fair value of forward exchange contracts
is based on their quoted price, if available. If a quoted price is not available, the fair value is estimated by discounting the
difference between the contractual forward price and the current forward price for the residual maturity of the contract using
a risk free interest rate (based on government bonds). The fair value of foreign currency option contracts is determined based
on the appropriate valuation techniques, considering the terms of the contract. Fair values reflect the credit risk of the instrument
and include adjustments to take account of the credit risk of the Group entity and the counter party when appropriate. The fair
value of the cross currency swaps (principal only swaps) and interest rate swaps is determined based on the discounting of the
future cash flows at the market rates existing on the reporting date.



| | (vii) | Non derivative financial liabilities
| | ----- | ------------------------------------

Fair value, which is determined for disclosure
purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of
interest at the reporting date. For finance leases, the market rate of interest is determined by reference to similar lease agreements.



| | (viii) | Share-based payment transactions
| | ------ | --------------------------------

The fair value of employee stock options
is measured using the Black-Scholes method. Measurement inputs include share price on grant date, exercise price of the instrument,
expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information),
expected term of the instrument (based on historical experience and general option holder behavior), expected dividends, and the
risk free interest rate (based on government bonds).



135







| | 5. | Property, plant and equipment
| | -- | -----------------------------



The following
table presents the changes in property, plant and equipment during the year ended March 31, 2020



|                              |  | Cost                    |            |  | Accumulated
    depreciation          |  |           | Carrying
    amount as at March 31, 2020 | 
|----------------------------- |  | ----------------------- | ---------- |  | ------------------------------------- |  | --------- | ---------------------------------------- | 
|Particulars                   |  | As
    at April 1, 2019 |            |  | Adjustment
    on adoption of IFRS
16 |  |           | Additions                                | 
|Freehold Land                 |  |                         | -          |  |                                       |  | -         |                                          | 
|Building                      |  |                         | 2,437,687  |  |                                       |  | 291,146   |                                          | 
|Plant and machinery           |  |                         | 13,944,419 |  |                                       |  | 2,538,826 |                                          | 
|Computer equipment            |  |                         | 1,517,322  |  |                                       |  | -         |                                          | 
|Office equipment              |  |                         | 684,295    |  |                                       |  | -         |                                          | 
|Furniture and fittings        |  |                         | 1,388,063  |  |                                       |  | -         |                                          | 
|Vehicles                      |  |                         | 9,656      |  |                                       |  | -         |                                          | 
|Total                         |  |                         | 19,981,442 |  |                                       |  | 2,829,972 |                                          | 
|Add: Construction in progress |  |                         |            |  |                                       |  |           |                                          | 
|Total                         |  |                         | 19,981,442 |  |                                       |  | 2,829,972 |                                          | 



The following
table presents the changes in property, plant and equipment during the year ended March 31, 2019



|                              |  | Cost                    |            |  | Accumulated
    depreciation |  |           | Carrying  | 
|----------------------------- |  | ----------------------- | ---------- |  | ---------------------------- |  | --------- | --------- | 
|Particulars                   |  | As
    at April 1, 2018 |            |  | Additions                    |  |           | Disposals | 
|Building                      |  |                         | 2,301,987  |  |                              |  | 135,700   |           | 
|Plant and machinery           |  |                         | 12,293,776 |  |                              |  | 1,723,910 |           | 
|Computer equipment            |  |                         | 1,407,816  |  |                              |  | 120,371   |           | 
|Office equipment              |  |                         | 601,793    |  |                              |  | 82,636    |           | 
|Furniture and fittings        |  |                         | 1,250,834  |  |                              |  | 146,401   |           | 
|Vehicles                      |  |                         | 9,656      |  |                              |  | -         |           | 
|Total                         |  |                         | 17,865,862 |  |                              |  | 2,209,018 |           | 
|Add: Construction in progress |  |                         |            |  |                              |  |           |           | 
|Total                         |  |                         | 17,865,862 |  |                              |  | 2,209,018 |           | 



136







The following
table presents the changes in property, plant and equipment during the year ended March 31, 2018



|                              |  | Cost                    |            |  | Accumulated
    depreciation |  |           |           | 
|----------------------------- |  | ----------------------- | ---------- |  | ---------------------------- |  | --------- | --------- | 
|Particulars                   |  | As
    at April 1, 2017 |            |  | Additions                    |  |           | Disposals | 
|Building                      |  |                         | 2,301,987  |  |                              |  | -         |           | 
|Plant and machinery           |  |                         | 11,585,120 |  |                              |  | 795,351   |           | 
|Computer equipment            |  |                         | 1,162,259  |  |                              |  | 251,022   |           | 
|Office equipment              |  |                         | 496,015    |  |                              |  | 106,953   |           | 
|Furniture and fittings        |  |                         | 1,093,544  |  |                              |  | 157,940   |           | 
|Vehicles                      |  |                         | 9,656      |  |                              |  | -         |           | 
|Total                         |  |                         | 16,648,581 |  |                              |  | 1,311,266 |           | 
|Add: Construction in progress |  |                         |            |  |                              |  |           |           | 
|Total                         |  |                         | 16,648,581 |  |                              |  | 1,311,266 |           | 



Capital Commitments

As of March 31, 2020 and March 31, 2019,
the Company had committed to spend approximately ₹ 6,140,770 and ₹ 3,157,693 respectively, under agreements to purchase
property, plant and equipment.



Construction in progress

Amounts paid towards acquisition of property,
plant and equipment outstanding at each balance sheet date and the cost of property, plant and equipment that are not ready to
be put into use are disclosed under construction-in-progress.



Security

As at March 31, 2020 property, plant and
equipment with a carrying amount of ₹ 10,888,446 (March 31, 2019: ₹ 6,375,273) are subject to a registered charge to
secure bank borrowings.



| | 6. | Intangible assets
| | -- | -----------------



Intangible assets comprise the following:



|                        |  | March 31, 2020 |         |  | March 31, 2019 |  |         | March 31, 2018 | 
|----------------------- |  | -------------- | ------- |  | -------------- |  | ------- | -------------- | 
|Goodwill                |  |                | 14,595  |  |                |  | 14,595  |                | 
|Other intangible assets |  |                | 665,097 |  |                |  | 561,924 |                | 
|                        |  |                | 679,692 |  |                |  | 576,519 |                | 



(i) Goodwill

The following table presents the changes in
goodwill during the years ended March 31, 2020 and 2019



|                                           |  | March 31, 2020 |        |  | March 31, 2019 | 
|------------------------------------------ |  | -------------- | ------ |  | -------------- | 
|Balance at the beginning of the year       |  |                | 14,595 |  |                | 
|Effect of movement in exchange rates       |  |                | -      |  |                | 
|Impairment loss recognized during the year |  |                | -      |  |                | 
|Net carrying amount of goodwill            |  |                | 14,595 |  |                | 



137







The amount of goodwill as at March 31,
2020 and March 31, 2019 has been allocated to the Applications Integration Services segment.



(ii) Other intangibles

The following table presents the changes
in intangible assets during the years ended March 31, 2020, 2019 and 2018.



|                               |  | Bandwidth
                                                                                Capacity |         |  | Software |  |           | License fees |  |  | Total  | 
|------------------------------ |  | -------------------------------------------------------------------------------------------------- | ------- |  | -------- |  | --------- | ------------ |  |  | ------ | 
|(A) Cost                       |  |                                                                                                    |         |  |          |  |           |              |  |  |        | 
|Balance as at March 31, 2017   |  |                                                                                                    | 642,391 |  |          |  | 691,898   |              |  |  | 73,000 | 
|Acquisitions during the year   |  |                                                                                                    | -       |  |          |  | 163,505   |              |  |  | -      | 
|Disposals during the year      |  |                                                                                                    | -       |  |          |  | -         |              |  |  | -      | 
|Balance as at March 31, 2018   |  |                                                                                                    | 642,391 |  |          |  | 855,403   |              |  |  | 73,000 | 
|Acquisitions during the year   |  |                                                                                                    | 41,943  |  |          |  | 131,481   |              |  |  | -      | 
|Disposals during the year      |  |                                                                                                    | -       |  |          |  | -         |              |  |  | -      | 
|Balance as at March 31, 2019   |  |                                                                                                    | 684,334 |  |          |  | 986,884   |              |  |  | 73,000 | 
|Acquisitions during the year   |  |                                                                                                    | 52,054  |  |          |  | 283,844   |              |  |  | 5,000  | 
|Disposals during the year      |  |                                                                                                    | -       |  |          |  | -         |              |  |  | -      | 
|Balance as at March 31, 2020   |  |                                                                                                    | 736,388 |  |          |  | 1,270,728 |              |  |  | 78,000 | 
|                               |  |                                                                                                    |         |  |          |  |           |              |  |  |        | 
|(B) Amortization               |  |                                                                                                    |         |  |          |  |           |              |  |  |        | 
|Balance as at March 31, 2017   |  |                                                                                                    | 247,394 |  |          |  | 587,032   |              |  |  | 28,356 | 
|Amortization for the year      |  |                                                                                                    | 56,895  |  |          |  | 80,550    |              |  |  | 2,650  | 
|Impairment loss on intangibles |  |                                                                                                    | -       |  |          |  | -         |              |  |  | -      | 
|Balance as at March 31, 2018   |  |                                                                                                    | 304,289 |  |          |  | 667,582   |              |  |  | 31,006 | 
|Amortization for the year      |  |                                                                                                    | 63,055  |  |          |  | 113,837   |              |  |  | 2,525  | 
|Impairment loss on intangibles |  |                                                                                                    | -       |  |          |  | -         |              |  |  | -      | 
|Balance as at March 31, 2019   |  |                                                                                                    | 367,344 |  |          |  | 781,419   |              |  |  | 33,531 | 
|Amortization for the year      |  |                                                                                                    | 70,869  |  |          |  | 163,248   |              |  |  | 3,608  | 
|Impairment loss on intangibles |  |                                                                                                    | -       |  |          |  | -         |              |  |  | -      | 
|Balance as at March 31, 2020   |  |                                                                                                    | 438,213 |  |          |  | 944,667   |              |  |  | 37,139 | 
|                               |  |                                                                                                    |         |  |          |  |           |              |  |  |        | 
|(C) Carrying amounts           |  |                                                                                                    |         |  |          |  |           |              |  |  |        | 
|As at March 31, 2018           |  |                                                                                                    | 338,102 |  |          |  | 187,821   |              |  |  | 41,994 | 
|As at March 31, 2019           |  |                                                                                                    | 316,990 |  |          |  | 205,465   |              |  |  | 39,469 | 
|As at March 31, 2020           |  |                                                                                                    | 298,175 |  |          |  | 326,061   |              |  |  | 40,861 | 



Intangible assets that were fully impaired
/ amortised were removed from the block.



Capital commitments

The Company had not committed to spend
any amount under agreements to purchase intangible assets during the year ending March 31, 2020 and 2019.



138







Capitalized borrowing costs

The Company had not capitalized any interest
cost during years ended March 31, 2020 and 2019.



| | 7. | Right of use assets
| | -- | -------------------



Following
are the changes in the carrying value of right of use assets for the year ended March 31, 2020:



|                             |  |      |           |   | Category of ROU asset | 
|---------------------------- |  | ---- | --------- | - | --------------------- | 
|Particulars                  |  | Land |           |   | Building              | 
|Balance as of April 1, 2019  |  |      | 1,316,190 |   |                       | 
|Additions                    |  |      | 87,456    |   |                       | 
|Deletions                    |  |      | -         |   |                       | 
|Depreciation                 |  |      | (17,908   | ) |                       | 
|Elimination – Intercompany   |  |      |           |   |                       | 
|Translation difference       |  |      | -         |   |                       | 
|Balance as of March 31, 2020 |  |      | 1,385,738 |   |                       | 



|Particulars                   |  | Amount |          
|----------------------------- |  | ------ | ---------
|Current lease liabilities     |  |        | 356,110  
|Non-current lease liabilities |  |        | 1,470,099
|Total                         |  |        | 1,826,209



The following is the movement
in lease liabilities during the Year ended March 31, 2020



|Particulars                            |  | Amount |          
|-------------------------------------- |  | ------ | ---------
|Balance as of April 1, 2019            |  |        | 1,786,852
|Additions                              |  |        | 255,317  
|Finance cost accrued during the period |  |        | 171,824  
|Deletions                              |  |        | -        
|Payment of lease liabilities           |  |        | (391,383 
|Translation difference                 |  |        | 3,600    
|Balance as of March 31, 2020           |  |        | 1,826,210



The
table below provides details regarding the contractual maturities of lease liabilities as of March 31, 2020 on an
undiscounted basis (excluding finance costs)



|Particulars          |  | Amount |          
|-------------------- |  | ------ | ---------
|Less than one year   |  |        | 337,569  
|One to five years    |  |        | 614,808  
|More than five years |  |        | 642,480  
|Total                |  |        | 1,594,857



| | 8. | Cash and cash equivalents
| | -- | -------------------------



Cash and cash equivalents as per consolidated
statement of financial position, as at March 31, 2020 amounted to ₹ 2,318,480 (March 31, 2019: ₹ 1,934,918).
This excludes cash-restricted of ₹ 332,605 (March 31, 2019: ₹ 313,057), representing deposits held under lien against
working capital facilities availed and bank guarantees given by the Group towards future performance obligations.



(a) Restricted cash



|                                                                                                  |  | March 31, 2020 |         |  | March 31, 2019 |  |         | March 31, 2018 | 
|------------------------------------------------------------------------------------------------- |  | -------------- | ------- |  | -------------- |  | ------- | -------------- | 
|Current                                                                                           |  |                |         |  |                |  |         |                | 
|Bank deposits held under lien against borrowings / guarantees from banks / Government authorities |  |                | 332,605 |  |                |  | 313,057 |                | 
|Total restricted cash                                                                             |  |                | 332,605 |  |                |  | 313,057 |                | 



139







(b) Non restricted cash



|Current                                                   |  |  |            |   |  |  |            |   |  |  |            |  
|--------------------------------------------------------- |  |  | ---------- | - |  |  | ---------- | - |  |  | ---------- | -
|Cash and bank balances                                    |  |  | 2,318,480  |   |  |  | 1,934,918  |   |  |  | 1,991,846  |  
|                                                          |  |  |            |   |  |  |            |   |  |  |            |  
|Total cash (a+b)                                          |  |  | 2,651,085  |   |  |  | 2,247,975  |   |  |  | 2,288,121  |  
|Bank overdraft used for cash management purposes          |  |  | (1,235,794 | ) |  |  | (1,553,203 | ) |  |  | (2,121,537 | )
|Cash and cash equivalents for the statement of cash flows |  |  | 1,415,291  |   |  |  | 694,772    |   |  |  | 166,584    |  



| | 9. | Lease prepayments
| | -- | -----------------



|                            |  | March 31, 2020 |   |  | March 31, 2019 | 
|--------------------------- |  | -------------- | - |  | -------------- | 
|Towards land and buildings* |  |                | - |  |                | 
|                            |  |                | - |  |                | 



* Includes ₹ Nil (March 2019: ₹
1,317,696) paid for acquiring leasehold rights of land for construction of Data Centers.



The prepayment towards land is amortized
over the period of the lease on a straight line basis. In respect of buildings under operating lease, prepayments are amortized
over the lease term on a straight line basis.



| | 10. | Other assets
| | --- | ------------



|Non current                               |  | March 31, 2020 |         |  | March 31, 2019 | 
|----------------------------------------- |  | -------------- | ------- |  | -------------- | 
|Other deposits and receivables            |  |                | 917,216 |  |                | 
|                                          |  |                | 917,216 |  |                | 
|                                          |  |                |         |  |                | 
|Financial assets included in other assets |  |                | 350,972 |  |                | 



| | 11. | Deferred tax assets and liabilities
| | --- | -----------------------------------



The tax effects of significant temporary
differences that resulted in deferred tax assets and a description of the items that created these differences is given below



|Recognized deferred tax assets / (liabilities)                 |  | Assets / (liabilities) |         
|-------------------------------------------------------------- |  | ---------------------- | --------
|                                                               |  | March 31, 2020         |         
|Deductible temporary difference                                |  |                        |         
|Property, Plant and Equipment                                  |  |                        | 181,237 
|Lease obligations on right of use assets                       |  |                        | 33,028  
|                                                               |  |                        | 214,265 
|Taxable temporary difference                                   |  |                        |         
|Intangible assets                                              |  |                        | (181,237
|Finance Lease obligations                                      |  |                        | -       
|                                                               |  |                        | (181,237
|                                                               |  |                        |         
|Unused Tax credits                                             |  |                        |         
|Mat Credit Entitlement                                         |  |                        | 66,318  
|Net deferred tax asset (liability) recognized in Balance Sheet |  |                        | 99,346  



140







The Group has recognized deferred tax assets
to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be
utilized. In assessing the realizability of the deferred income tax assets, management considers whether some portion or all of
the deferred income tax assets will not be realized. The ultimate realization of the deferred income tax assets and tax loss carry
forwards is dependent upon the generation of future taxable income during the periods in which the temporary differences become
deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning
strategy in making this assessment. Based on the level of historical taxable income and projections of future taxable income over
the periods in which the deferred tax assets are deductible, management believes that the Company will realize the benefits of
those recognized deductible differences. The amount of deferred tax assets considered realizable, however, could be reduced in
the near term if estimates of future taxable income are reduced.



Movement in temporary differences during
the year



|                                         |  | Balance as at March 31, 2018 |          |   | Recognized in Income statement |  |         | Recognized in Equity |  |  | Balance as at March 31, 2019 |  |  | Recognized in income statement |          |   | Recognized in Equity / Balance sheet |  |         | Balance as at March 31, 2020 | 
|---------------------------------------- |  | ---------------------------- | -------- | - | ------------------------------ |  | ------- | -------------------- |  |  | ---------------------------- |  |  | ------------------------------ | -------- | - | ------------------------------------ |  | ------- | ---------------------------- | 
|Property, plant and equipment            |  |                              | 294,626  |   |                                |  | (22,335 | )                    |  |  | -                            |  |  |                                | 272,291  |   |                                      |  | (91,054 | )                            | 
|Intangible assets                        |  |                              | (148,106 | ) |                                |  | 1,403   |                      |  |  | -                            |  |  |                                | (146,703 | ) |                                      |  | (34,535 | )                            | 
|Lease obligations on right of use assets |  |                              | -        |   |                                |  | -       |                      |  |  | -                            |  |  |                                | -        |   |                                      |  | 33,028  |                              | 
|Finance Lease obligations                |  |                              | (146,520 | ) |                                |  | 20,932  |                      |  |  | -                            |  |  |                                | (125,588 | ) |                                      |  | 125,589 |                              | 
|MAT Credit entitlement                   |  |                              | -        |   |                                |  | 236,045 |                      |  |  | -                            |  |  |                                | 236,045  |   |                                      |  | -       |                              | 



Unrecognized deferred
tax assets / (liabilities)



|                                 |  | As at March 31, 2020 |         |  | As at March 31, 2019 | 
|-------------------------------- |  | -------------------- | ------- |  | -------------------- | 
|Deductible temporary differences |  |                      | 592,981 |  |                      | 
|Unrecognized tax losses          |  |                      | 7,140   |  |                      | 
|                                 |  |                      | 600,121 |  |                      | 



Considering the probability
of availability of future taxable profits in the period in which tax losses expire, deferred tax assets have not been recognized
in respect of tax losses carried forward by the Group. The above tax losses expire at various years.



Income tax expense recognized in profit
or loss



|                                                  |  | March 31, 2020 |         |   | March 31, 2019 |  |          | March 31, 2018 | 
|------------------------------------------------- |  | -------------- | ------- | - | -------------- |  | -------- | -------------- | 
|Current tax expense / (benefit)                   |  |                |         |   |                |  |          |                | 
|Current period                                    |  |                | 345,707 |   |                |  | 238,657  |                | 
|                                                  |  |                |         |   |                |  |          |                | 
|Deferred tax expense / (benefit)                  |  |                |         |   |                |  |          |                | 
|Origination and reversal of temporary differences |  |                | (31,368 | ) |                |  | -        |                | 
|MAT credit entitlement                            |  |                | -       |   |                |  | (236,045 | )              | 
|                                                  |  |                |         |   |                |  |          |                | 
|Total income tax expense / (benefit)              |  |                | 314,339 |   |                |  | 2,612    |                | 



141







There are no income taxes directly recognized
in other comprehensive income.



Reconciliation of effective tax rate



A reconciliation of the
income tax provision to the amount computed by applying the statutory income tax rate to the income before taxes is summarized
below:



|                                                                                                           |  | Year ended March 31, 2020 |           |   | Year ended March 31, 2019 |  |           | Year ended March 31, 2018 | 
|---------------------------------------------------------------------------------------------------------- |  | ------------------------- | --------- | - | ------------------------- |  | --------- | ------------------------- | 
|Profit before income taxes                                                                                 |  |                           | 1,019,716 |   |                           |  | 1,071,315 |                           | 
|Enacted tax rates in India                                                                                 |  |                           | 34.94     | % |                           |  | 34.94     | %                         | 
|Computed expected tax expense / (benefit)                                                                  |  |                           | 356,343   |   |                           |  | 374,360   |                           | 
|Effect of:                                                                                                 |  |                           |           |   |                           |  |           |                           | 
|Share based payment expense not deductible for tax purposes                                                |  |                           | -         |   |                           |  | 411       |                           | 
|Unrecognized deferred tax assets on losses incurred during the year (net of temporary differences, if any) |  |                           |           |   |                           |  |           |                           | 
|Unrecognized deferred tax asset on temporary differences                                                   |  |                           | 84,588    |   |                           |  | 48,395    |                           | 
|Difference on account differential tax rates in different jurisdictions                                    |  |                           | 7,149     |   |                           |  | (1,924    | )                         | 
|Expenses/income not taxable                                                                                |  |                           | -         |   |                           |  | -         |                           | 
|Recognition of temporary differences                                                                       |  |                           | (33,028   | ) |                           |  | -         |                           | 
|Recognition of previously unrecognized  tax losses                                                         |  |                           | (100,713  | ) |                           |  | (418,630  | )                         | 
|                                                                                                           |  |                           | 314,339   |   |                           |  | 2,612     |                           | 



| | 12. | Inventories
| | --- | -----------



|                  |  | March 31, 2020 |           |  | March 31, 2019 | 
|----------------- |  | -------------- | --------- |  | -------------- | 
|Trade inventories |  |                | 1,302,056 |  |                | 
|                  |  |                | 1,302,056 |  |                | 



The inventories
amounting to ₹ 1,302,056 (March 31, 2019: ₹ 1,715,314) are secured in connection with bank borrowings and overdraft.



| | 13. | Trade and other receivables
| | --- | ---------------------------



Trade and other receivables comprise:



|                                           |  | March 31, 2020 |            |  | March 31, 2019 | 
|------------------------------------------ |  | -------------- | ---------- |  | -------------- | 
|(i)   Trade receivables, net               |  |                | 9,631,400  |  |                | 
|(ii)  Other receivables including deposits |  |                | 2,440,583  |  |                | 
|(iii) Contract related accruals            |  |                | -          |  |                | 
|                                           |  |                | 12,071,983 |  |                | 



| | (i) | Trade receivables as of March 31, 2020 and March 31, 2019 are stated net of allowance for doubtful
receivables. The Group maintains an allowance for doubtful receivables based on expected credit loss model. The Group’s exposure
to credit and currency risks and impairment losses related to trade and other receivables, excluding construction work in progress
is disclosed in note 34. Trade receivables consist of:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                         |  | March 31, 2020 |           |   | March 31, 2019 | 
|---------------------------------------- |  | -------------- | --------- | - | -------------- | 
|Trade receivables from related parties   |  |                | -         |   |                | 
|Other trade receivables                  |  |                | 9,902,021 |   |                | 
|                                         |  |                | 9,902,021 |   |                | 
|Less: Allowance for doubtful receivables |  |                | (270,621  | ) |                | 
|Balance at the end of the year           |  |                | 9,631,400 |   |                | 



142







The activity in the allowance for doubtful
accounts receivable is given below:



|                                     |  | For the year ended |         
|------------------------------------ |  | ------------------ | --------
|                                     |  | March 31, 2020     |         
|Balance at the beginning of the year |  |                    | 272,471 
|Add : Additional provision, net      |  |                    | 479,747 
|Less : Bad debts written off         |  |                    | (481,597
|Balance at the end of the year       |  |                    | 270,621 



| | (ii) | Other receivables comprises of the following items:
| | ---- | ---------------------------------------------------



|                                                   |  | March 31, 2020 |           |  | March 31, 2019 | 
|-------------------------------------------------- |  | -------------- | --------- |  | -------------- | 
|Advances and other deposits (Refer Note (a) below) |  |                | 1,244,287 |  |                | 
|Withholding taxes (Refer Note (b) below)           |  |                | 1,196,296 |  |                | 
|                                                   |  |                | 2,440,583 |  |                | 
|Financial assets included in other receivables     |  |                | 139,122   |  |                | 



Notes:

| | a) | Advances and other deposits primarily comprises of receivables in the form of deposits, sales tax/VAT,
GST, service tax and other advances given in the ordinary course of business.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) | Includes withholding taxes recoverable from the Department of Income-tax for which the Company
has filed tax returns for refund. The Company expects to realize such refund of withholding taxes within the next 12 months.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 14. | Prepayments for current assets
| | --- | ------------------------------



Prepayments for current assets comprise
of the following:



|                                      |  | March 31, 2020 |         |  | March 31, 2019 | 
|------------------------------------- |  | -------------- | ------- |  | -------------- | 
|Prepayments for purchase of bandwidth |  |                | 26,327  |  |                | 
|Prepayments related to insurance      |  |                | 7,602   |  |                | 
|Prepayments-others                    |  |                | 503,915 |  |                | 
|Lease prepayments                     |  |                | -       |  |                | 
|                                      |  |                | 537,844 |  |                | 



| | 15. | Other investments
| | --- | -----------------



Other Investments comprise investment in
unquoted equity instruments classified as financial assets at FVTOCI and investment in unquoted debt securities classified as financial
assets at amortised cost. The details of such investments are given below:



|                                                                                 |  | March 31, 2020 |         |  | March 31, 2019 | 
|-------------------------------------------------------------------------------- |  | -------------- | ------- |  | -------------- | 
|Investment in equity instruments – unquoted                                      |  |                |         |  |                | 
|Investment in equity shares of  Vashi Railway Station Commercial Complex Limited |  |                | 150     |  |                | 
|Investment in equity shares of Sarayu Clean Gen Private Limited                  |  |                | 1,560   |  |                | 
|                                                                                 |  |                |         |  |                | 
|Investment in debt securities – unquoted                                         |  |                |         |  |                | 
|Investment in Attala Systems Corporation #                                       |  |                | 210,262 |  |                | 
|                                                                                 |  |                | 211,972 |  |                | 



143







# Unsecured convertible promissory note
of $2,789 with Attala Systems Corporation, of which $ 750 (₹ 56,539), $ 375(₹ 28,270),    $375 (₹
28,270), $ 500 (₹ 37,693), $ 214 (₹ 16,133) and $ 575 (₹ 43,357) actual maturity of the above investments was
on 17th October 2019, 4th January 2020 , 4th April 2020 , 30th October 2020, 1st January 2021 and 27th November 2021 respectively.
The same has been amended on 15th October 2019 and the maturity date has been extended to 30th October 2021
The note bears interest at a rate of five percent (5%). The promissory note is convertible to equity securities under specific
terms based on triggering events as defined in the agreement.



| | 16. | Equity
| | --- | ------



No of shares



|                                         |  | Year ended March 31, |            
|---------------------------------------- |  | -------------------- | -----------
|                                         |  | 2020                 |            
|Issued as at April 01                    |  |                      | 179,144,347
|Issued for cash                          |  |                      | -          
|Issued for consideration other than cash |  |                      | -          
|Exercise of share options                |  |                      | 78,900     
|Issued as at March 31                    |  |                      | 179,223,247



In fiscal 2015, the authorized share capital
of the Company was enhanced by an amount of ₹ 189,000. Consequently the authorized
share capital is increased to ₹ 2,040,000 divided into 204,000,000 Equity Shares, having a par value ₹ 10 per share.The holders of ordinary shares are entitled to receive dividends from time to time and are entitled to vote at meetings
of the Group. All shares rank equally with regard to Group’s residual assets.



The directors have not recommended any
dividend for paid up Equity Share of ₹ 10 each for the year 2019-20 (2018-19: ₹
1.2 per paid up Equity share of ₹ 10 each). Cash outflow towards dividend, dividend
distribution tax and total outflow for FY 2018-19 are ₹ 185,477 , ₹ 38,125 and ₹ 223,602 respectively.



Also
refer note 36 – Issue of share on private basis to existing promoter group and Note 27 – Share-based payment



Share based payment reserve



Share based payment reserve represents
the stock compensation expense recognized in the statement of changes in equity.



Other components of equity:



a) Translation reserve



The translation reserve comprises all foreign
currency differences arising from the translation of the financial statements of foreign operations.



b) Fair value reserve



The fair value reserve comprises the cumulative
net change in the fair value of investments classified as at FVTOCI until the investments are derecognized or impaired.



144







c) Remeasurements of the net defined
benefit liability/asset



Remeasurements of the net defined benefit
liability/asset represent the cumulative actuarial gain / loss on account of Change in demographic assumptions, change in financial
assumption and experience variance and remeasurement in return on plan assets, excluding amounts recognized in net interest expense/
income.



| | 17. | Employee benefits
| | --- | -----------------



|                     |  | March 31, 2020 |         |  | March 31, 2019 | 
|-------------------- |  | -------------- | ------- |  | -------------- | 
|Gratuity payable     |  |                | 126,080 |  |                | 
|Compensated absences |  |                | 51,319  |  |                | 
|                     |  |                | 177,399 |  |                | 

Gratuity cost



The components of gratuity costs recognized
in the consolidated income statement for the years ending March 31, 2020, March 31, 2019 and March 31, 2018 consist of the following:



|                |  | March 31, 2020 |        |   | March 31, 2019 |  |        | March 31, 2018 | 
|--------------- |  | -------------- | ------ | - | -------------- |  | ------ | -------------- | 
|Service cost    |  |                | 28,929 |   |                |  | 25,936 |                | 
|Interest cost   |  |                | 10,106 |   |                |  | 9,606  |                | 
|Interest income |  |                | (1,781 | ) |                |  | (2,381 | )              | 
|                |  |                | 37,254 |   |                |  | 33,161 |                | 



Details of employee benefit obligation
and plan asset are as follows:



|                                                                     |  | March 31, 2020 |         |   | March 31, 2019 | 
|-------------------------------------------------------------------- |  | -------------- | ------- | - | -------------- | 
|Present value of projected benefit obligation at the end of the year |  |                | 156,413 |   |                | 
|Funded status of the plans                                           |  |                | (30,474 | ) |                | 
|Recognized (asset) / liability                                       |  |                | 125,939 |   |                | 



The following
table set out the status of the gratuity plan:



|Change in defined benefit obligation                      |  | March 31, 2020 |         |   | March 31, 2019 |  |         | March 31, 2018 | 
|--------------------------------------------------------- |  | -------------- | ------- | - | -------------- |  | ------- | -------------- | 
|Projected benefit obligation at the beginning of the year |  |                | 145,108 |   |                |  | 131,687 |                | 
|Service cost                                              |  |                | 28,929  |   |                |  | 25,936  |                | 
|Interest cost                                             |  |                | 10,106  |   |                |  | 9,606   |                | 
|Remeasurements - Actuarial (gain) / loss                  |  |                | (12,955 | ) |                |  | (5,267  | )              | 
|Benefits paid                                             |  |                | (14,776 | ) |                |  | (16,854 | )              | 
|Projected benefit obligation at the end of the  year      |  |                | 156,412 |   |                |  | 145,108 |                | 



|Change in plan assets                                                                |  | March 31, 2020 |         |   | March 31, 2019 |  |         | March 31, 2018 | 
|------------------------------------------------------------------------------------ |  | -------------- | ------- | - | -------------- |  | ------- | -------------- | 
|Fair value of plan assets at the beginning of the year                               |  |                | 25,498  |   |                |  | 32,567  |                | 
|Interest income                                                                      |  |                | 1781    |   |                |  | 2,381   |                | 
|Remeasurements – return on plan assets excluding amounts included in interest income |  |                | (2,138  | ) |                |  | (2,596  | )              | 
|Employer contributions                                                               |  |                | 20,109  |   |                |  | 10,000  |                | 
|Benefits paid                                                                        |  |                | (14,776 | ) |                |  | (16,854 | )              | 
|Fair value of plan assets at the end of the year                                     |  |                | 30,474  |   |                |  | 25,498  |                | 
|                                                                                     |  |                |         |   |                |  |         |                | 
|Actual return on plan assets                                                         |  |                | -       |   |                |  | -       |                | 



145







Actuarial assumptions at end of the
year:



The principal actuarial assumptions as
on March 31, 2020, 2019 and 2018 were as follows:



|                                                 |  | March 31, 2020                          |  | March 31, 2019 |  | March 31, 2018
|------------------------------------------------ |  | --------------------------------------- |  | -------------- |  | --------------
|Discount rate                                    |  | 5.60% p.a.                              |  | 6.95% P.a      |  | 7.30% P.a     
|Long-term rate of compensation increase          |  | 5.00% p.a.                              |  | 7.00% P.a      |  | 7.00% P.a     
|Expected long term rate of return on plan assets |  | 0% for the first year and 5% thereafter |  | 7.00% P.a      |  | 7.00% P.a     
|Average future working life time                 |  | 4.37 years                              |  | 4.37 years     |  | 4.38 years    



Discount rate: The discount rate
is based on prevailing market yields of Indian Government securities as at the end of the year for the estimated term of the obligations.



Long term rate of compensation increase:The estimates of future salary increases considered take into account inflation, seniority, promotion and other factors.



Expected long term rate of return on
plan assets:This is based on the average long term rate of return expected on investments of the fund during the estimated
term of the obligations.



Assumptions regarding future mortality
are based on published statistics and mortality tables.



The Group assesses these assumptions with
the projected long-term plans of growth and prevalent industry standards.



Contributions: The Group expects
to contribute ₹ 153,274 to its gratuity fund during the year ending March 31, 2021.



The expected benefit payments to be
made in the next few years are as under:



|Year               |  | March 31, 2020 |        |  | March 31, 2019 | 
|------------------ |  | -------------- | ------ |  | -------------- | 
|1 Year             |  |                | 29,441 |  |                | 
|2 to 5 years       |  |                | 90,764 |  |                | 
|6 to 10 years      |  |                | 58,273 |  |                | 
|More than 10 years |  |                | 30,280 |  |                | 



Plan assets:The Gratuity plan’s
weighted-average asset allocation at March 31, 2020 and March 31, 2019, by asset category is as follows:



|                          |  | March 31, 2020 |     |   | March 31, 2019 | 
|------------------------- |  | -------------- | --- | - | -------------- | 
|Funds managed by insurers |  |                | 100 | % |                | 



Remeasurements of the net defined benefit
liability recognized in other comprehensive income



Amount recognized in other comprehensive
income for the years ending March 31, 2020, 2019 and 2018 are as follows:



|                                                                                        |  | March 31, 2020 |         |   | March 31, 2019 |  |        | March 31, 2018 | 
|--------------------------------------------------------------------------------------- |  | -------------- | ------- | - | -------------- |  | ------ | -------------- | 
|Remeasurements of the net defined benefit liability                                     |  |                |         |   |                |  |        |                | 
|Actuarial (gain)/loss                                                                   |  |                |         |   |                |  |        |                | 
|-	 Change in demographic assumptions                                                    |  |                | (10     | ) |                |  | -      |                | 
|-	 change in financial assumptions                                                      |  |                | (12,015 | ) |                |  | 2,358  |                | 
|-	 experience variance                                                                  |  |                | (929    | ) |                |  | (7,625 | )              | 
|-	 return on plan assets, excluding amounts  recognized in net interest expense/ income |  |                | 2,138   |   |                |  | 2,596  |                | 
|                                                                                        |  |                | (10,816 | ) |                |  | (2,671 | )              | 



146







Sensitivity Analysis of significant
actuarial assumption



Sensitivity
analysis for the defined benefit obligations will increase/ decrease by the amounts mentioned below if there is a variation of
100 basis points in the discount rate and salary escalation rate.



|                                            |  | Discount rate                 |         |  | Salary escalation rate        | 
|------------------------------------------- |  | ----------------------------- | ------- |  | ----------------------------- | 
|                                            |  | Increase by 100 bps (₹ ‘000s) |         |  | Decrease by 100 bps (₹ ‘000s) | 
|Present Value of Defined Benefit Obligation |  |                               | 149,488 |  |                               | 



The present
value of defined benefit obligation has been arrived at using the same method as is used for valuing the defined benefit obligation
as per the current assumptions. The increase/decrease in defined benefit obligation has been arrived assuming the other assumptions
are constant though such increase/decrease do not happen in isolation in real scenarios.



Contributions to defined contribution
plans



In accordance
with Indian law, all employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee
and employer make monthly contributions to the plan, each equal to a specified percentage of employee’s basic salary. The
Group has no further obligations under the plan beyond its monthly contributions. The Group contributed ₹ 117,941, ₹
115,505 and ₹ 102,340 for the years ended March 31, 2020, 2019 and 2018. The Group has contributed to 401(K) plan on behalf
of eligible employees amounting to ₹ 9,906 (March 31, 2019: ₹ 8,648) during the year ended March 31, 2020.



| | 18. | Contract balances and Other liabilities
| | --- | ---------------------------------------



| | A) | Contract balances
| | -- | -----------------



The following table provides information
about receivables, contract assets and contract liabilities from the contracts with the customers



|Particulars                                  |  | March 2020 |           |  | March 2019 | 
|-------------------------------------------- |  | ---------- | --------- |  | ---------- | 
|Trade Receivables                            |  |            |           |  |            | 
|Contract Assets – Unbilled Revenue           |  |            |           |  |            | 
|Contract liabilities – Deferred Income       |  |            |           |  |            | 
|Current contract liabilities                 |  |            | 1,472,898 |  |            | 
|Non current contract liabilities             |  |            | 981,767   |  |            | 
|Total Contract liabilities – Deferred Income |  |            |           |  |            | 



The following table provides the movement
in contract assets (unbilled revenue) for the year ended March 31, 2020



|Particulars                             |  | ₹. |        
|--------------------------------------- |  | -- | -------
|Balance as of April 1, 2019             |  |    | 33,634 
|Add: Revenue recognized during the year |  |    | 43,502 
|Less: Invoiced during the year          |  |    | (62,043
|Add: Translation gain or (loss)         |  |    | 1,020  
|Balance as at March 31, 2020            |  |    | 16,113 



The following table provides the movement
in contract liabilities (Deferred Income) for the year ended March 31, 2020



|Particulars                                                |  | ₹. |            
|---------------------------------------------------------- |  | -- | -----------
|Balance as of April 1, 2019                                |  |    | 2,356,187  
|Less: Revenue recognized during the period                 |  |    | (15,178,603
|Add: Invoiced during the period but revenue not recognized |  |    | 15,269,125 
|Add: Translation gain or (loss)                            |  |    | 7,955      
|Balance as at March 31, 2020                               |  |    | 2,454,664  



147







Contract Cost and Amortisation

Costs to fulfil customer contracts are
deferred and amortized over the contract period. For the year ended March 31, 2020 the Company has capitalised ₹ 130,584
and amortised ₹ 141,604. There was no impairment loss in relation to the capitalised cost.



Incremental costs of obtaining a contract
are recognized as assets and amortized over the contract period. The Company recognizes incremental cost of obtaining a contract
as an expense when incurred if the amortisation period of the asset that the entity otherwise would have recognized is one year
or less.



| | B) | Other Liabilities
| | -- | -----------------



|                                                    |  | March 31, 2020 |        |  | March 31, 2019 | 
|--------------------------------------------------- |  | -------------- | ------ |  | -------------- | 
|Deferred income and other liabilities               |  |                | 33,420 |  |                | 
|                                                    |  |                | 33,420 |  |                | 
|                                                    |  |                |        |  |                | 
|Financial liabilities included in other liabilities |  |                | 33,420 |  |                | 



| | 19. | Borrowings
| | --- | ----------



|                                                      |  | March 31, 2020 |           |  | March 31, 2019 | 
|----------------------------------------------------- |  | -------------- | --------- |  | -------------- | 
|Current                                               |  |                |           |  |                | 
|Term bank loans (Refer note 1 below)                  |  |                | 935,333   |  |                | 
|Other working capital facilities (Refer note 2 below) |  |                | 2,258,750 |  |                | 
|Borrowings from others (Refer note 3 below)           |  |                | 1,167,548 |  |                | 
|                                                      |  |                | 4,361,631 |  |                | 
|Non current                                           |  |                |           |  |                | 
|Term bank loans (Refer note 1 below)                  |  |                | 2,791,545 |  |                | 
|Borrowings from others (Refer note 3 below)           |  |                | 949,560   |  |                | 
|                                                      |  |                | 3,741,105 |  |                | 



The Group has borrowings which include:



| | 1. | The term loans bear interest rate ranging from 3.50% to 5.30% plus 6 months LIBOR in the case of
Foreign currency term loans and 8.80% to 10.25% for others (March 31, 2019 - 9.00% to 10.50%) and repayable in equal quarterly
installments within a tenor of 3 to 5 years after moratorium periods ranging from 6 months to one year in certain cases.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This also includes Buyers’
credit of ₹ 693,244 which are repayable over a period of 1 to 3 years. The loans bear interest rate ranging from 2% to 5.75%
for Buyers Credit and 9.00% to 9.75% for Term Loan (INR) in lieu of Buyers Credit



Of total balance ₹ 1,810,964
is primarily secured by charge on movable fixed assets funded by term loan and also collaterally secured by extension of equitable
mortgage of title deeds of property at Noida in the name of  M/s Pace Info Com Park Pvt Ltd (Merged with the Company from
1st April 2014). An amount of ₹ 2,066,065 is primarily secured against the specific project receivables of the company.



₹ 37,122 is primarily
secured by plant and machinery at 4th floor of Rabale Tower I and ₹ 125,000 is primarily secured by specific plant and machinery
at ground, first, second, fourth, fifth, sixth and seventh floor at Rabale Tower II data centre and ₹ 433,375 is primarily
secured by movable fixed assets at Rabale Tower II Data center (1st & 2nd floor) funded by Term Loan and collaterally secured
by property at Vashi (fifth floor) in Mumbai. An amount of ₹ 416,373 is secured by plant and machinery and collaterally by
all securities currently charged to working capital lines from the concerned bank.



148







An amount of ₹ 519,261
is primarily secured by moveable fixed assets funded out of Term Loan.



| | 2. | Working capital facilities:
| | -- | ---------------------------



| | (a) | Cash credit facilities amounting to ₹ 3,494,374 bank guarantees and all non-fund facilities
availed by the Group are primarily secured by way of pari-passu first charge on the entire current assets of the Group to all working
capital bankers under consortium.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | In addition to the above, out of these Cash Credit facilities,
| | --- | --------------------------------------------------------------



(i) exposure
amounting to ₹ 2,510,590 is collaterally secured by way of pari-passu charge on the unencumbered movable fixed assets of
the Group, both present and future.



(ii) exposure
amounting to ₹ 1,529,995 is collaterally secured by way of equitable mortgage over the properties at TIDEL Park, Chennai
and Vashi, Vile Parle at Mumbai



(iii) exposure amounting to
₹ 983,784 is collaterally secured by equitable mortgage over the land and building at Noida, Uttar Pradesh and



(iv) the exposure amounting
to ₹ 656,854 is collaterally secured by equitable mortgage over the Vashi property at Mumbai.



| | (c) | These working capital facilities bear interest ranging from 7.9% p.a. to 10.7% p.a. [March 31,
2019 – 4.15% to 10.75% p.a.] and these facilities are subject to renewal annually.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Borrowings from others include secured borrowings, that are secured against relevant assets and
unsecured borrowings. These loans carry an interest rate ranging from 8.59% p.a to 10.85% p.a. (March 31, 2019 - 8.59% p.a to 12.50%
p.a.)
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 20. | Trade and other payables
| | --- | ------------------------



|                                                           |  | March 31, 2020 |           |  | March 31, 2019 | 
|---------------------------------------------------------- |  | -------------- | --------- |  | -------------- | 
|Trade payables                                             |  |                | 3,889,390 |  |                | 
|Advance from customers                                     |  |                | 413,378   |  |                | 
|Accrued expenses                                           |  |                | 4,212,423 |  |                | 
|Other payables                                             |  |                | 558,667   |  |                | 
|                                                           |  |                | 9,073,859 |  |                | 
|                                                           |  |                |           |  |                | 
|Financial liabilities included in trade and other payables |  |                | 8,366,215 |  |                | 



| | 21. | Deferred income
| | --- | ---------------



|                     |  | March 31, 2020 |           |  | March 31, 2019 | 
|-------------------- |  | -------------- | --------- |  | -------------- | 
|Contract liabilities |  |                | 1,472,898 |  |                | 
|                     |  |                | 1,472,898 |  |                | 



149







| | 22. | Revenue
| | --- | -------



|                             |  | Year ended     |           
|---------------------------- |  | -------------- | ----------
|                             |  | March 31, 2020 |           
|Rendering of services        |  |                |           
|Service revenue*             |  |                | 20,449,123
|Installation service revenue |  |                | 676,658   
|                             |  |                | 21,125,781
|Sale of products             |  |                | 1,826,286 
|                             |  |                | 22,952,067



* Revenue from operating leases amount
to

₹ Nil (March 31, 2020), ₹ 19,983
(March 31, 2019) and ₹211,990 (March 31, 2018)



Note: Revenue disaggregation as per business
segment and geography has been included in segment information (See Note 30).



| | 23. | Performance obligations and remaining performance obligations
| | --- | -------------------------------------------------------------



The Group
has applied the practical expedient provided in the standard and accordingly not disclosed the remaining performance obligation
relating to the contract where the performance obligation is part of a contract that has an original expected duration of one year
or less and has also not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognized
corresponds directly with the value to the customer of the entity's performance completed to date.



The following
table provides revenue expected to be recognized in the future related to performance obligation that are unsatisfied (or partially
satisfied) at the reporting date:



|To be recognized    |  | Amount |          
|------------------- |  | ------ | ---------
|Within one year     |  |        | 1,194,911
|One to three years  |  |        | 492,804  
|Three years or more |  |        | 125,535  



| | 24. | Cost of goods sold and services rendered
| | --- | ----------------------------------------



Cost of goods sold and services rendered
information is presented before any depreciation or amortization that is direct and attributable to revenue sources. The Group’s
asset base deployed in the business is not easily split into a component that is directly attributable to a business and a component
that is common / indirect to all the businesses. Since a gross profit number without depreciation and amortization does not necessarily
meet the objective of such a disclosure, the Group has not disclosed gross profit numbers but disclosed all expenses, direct and
indirect, in a homogenous group leading directly from revenue to operating income.



150







| | 25. | Selling, general and administrative expenses
| | --- | --------------------------------------------



|                                                             |  | Year ended     |          
|------------------------------------------------------------ |  | -------------- | ---------
|                                                             |  | March 31, 2020 |          
|                                                             |  |                |          
|Personnel expenses                                           |  |                | 1,573,512
|Marketing and promotion expenses                             |  |                | 249,043  
|Administrative and other expenses*#                          |  |                | 2,691,091
|                                                             |  |                | 4,513,646
|# Includes Contract associates costs                         |  |                |          
|Attributable to cost of goods sold and services rendered     |  |                | 308,494  
|Attributable to selling, general and administrative expenses |  |                | 80,246   



* Includes net foreign exchange loss of
₹ 2,975, ₹ 51,936 and ₹ Nil for the years ended March 31, 2020, 2019 and 2018 respectively



| | 26. | Personnel expenses
| | --- | ------------------



|                                                             |  | Year ended     |          
|------------------------------------------------------------ |  | -------------- | ---------
|                                                             |  | March 31, 2020 |          
|Salaries and wages                                           |  |                | 2,921,071
|Contribution to provident fund and other funds               |  |                | 165,133  
|Staff welfare expenses                                       |  |                | 37,094   
|Employee stock compensation expense                          |  |                | 46,371   
|                                                             |  |                | 3,169,669
|Attributable to cost of goods sold and services rendered     |  |                | 1,287,665
|Attributable to selling, general and administrative expenses |  |                | 1,882,004



| | 27. | Share-based payments
| | --- | --------------------



Share based payments
are designed as equity-settled plans. Under the equity settled plans, the Group had issued stock options under Associate Stock
Option Plan (ASOP) 1999, ASOP 2000, ASOP 2002, ASOP 2005, ASOP 2007 and ASOP 2014. Each option entitles the holder to purchase
one American Depository Share (ADS) at an exercise price determined by the Compensation committee on the date of the grant. There
are no options outstanding in respect of ASOP 1999, ASOP 2000, ASOP 2002, ASOP 2005 and ASOP 2007 plans as at March 31, 2020. Our
stock option plans are detailed as under:



Associate Stock Option Plan 2014



In July 2014, the shareholders
of the Company approved a new scheme for allotment of shares to employees i.e. Associate Stock Option Plan 2014. 25,000,000 shares
are reserved for this plan. Consequently 5,870,800 options were granted to the employees on January 20, 2015. The Company has granted
additional 335,000, 150,000, 525,000 and 184,300 options to employees during the year 2018-19, 2017-18, 2016-17 and 2015-16 respectively.



The options vest in the following manner:



|4,304,600 Options (Option Plan I): | 3/5th of the options vest at the end of one year from the date of grant. The remaining 2/5th vests at the end of every half year during second and third years from the date of grant in four equal instalments
|---------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



151







|487,700   Options (Option Plan II):  | 2/5th of the options vest at the end of one year from the date of grant. The remaining 3/5th vests at the end of every half year during second, third and fourth years in six equal instalments 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                     |                                                                                                                                                                                                 
|2,272,800 Options (Option Plan III): | 2/5th of the options vest at the end of two years from the date of grant. The remaining 3/5th vests at the end of every half year during third, fourth and fifth years in six equal instalments.



The stock
options can be exercised within a period of twelve months from the date of last vesting.



As the number of stock options and the
price of those options were made known to each allottee, the Plan has been considered as a fixed price grant. Stock option activity
under the ASOP 2014 and ASOP 2007 Plan is as follows:



|No. of options granted, exercised and forfeited |  | Number of options |            |   | Weighted average exercise price in ₹ |  |       | Number of options |  |  | Weighted average exercise price in ₹ |   |  | Number of options |        |  | Weighted average exercise price in ₹ | 
|----------------------------------------------- |  | ----------------- | ---------- | - | ------------------------------------ |  | ----- | ----------------- |  |  | ------------------------------------ | - |  | ----------------- | ------ |  | ------------------------------------ | 
|                                                |  | 2020              |            |   | 2020                                 |  |       | 2019              |  |  | 2019                                 |   |  | 2018              |        |  | 2018                                 | 
|Outstanding at the beginning of the year        |  |                   | 4,588,300  |   |                                      |  | 78.84 |                   |  |  | 5,180,440                            |   |  |                   | 78.79  |  |                                      | 
|Granted during the year                         |  |                   | 7,220,000  |   |                                      |  | 89.55 |                   |  |  | 335,000                              |   |  |                   | 115.79 |  |                                      | 
|Forfeited during the year                       |  |                   | (673,300   | ) |                                      |  | 67.55 |                   |  |  | (467,440                             | ) |  |                   | 79.10  |  |                                      | 
|Expired during the year                         |  |                   | -          |   |                                      |  | -     |                   |  |  | -                                    |   |  |                   | -      |  |                                      | 
|Exercised during the year                       |  |                   | (78,900    | ) |                                      |  | 67.55 |                   |  |  | (459,700                             | ) |  |                   | 79.10  |  |                                      | 
|Outstanding at the end of the year              |  |                   | 11,056,100 |   |                                      |  | 70.90 |                   |  |  | 4,588,300                            |   |  |                   | 78.84  |  |                                      | 
|Exercisable at the end of the year              |  |                   | 4,281,090  |   |                                      |  | 77.92 |                   |  |  | 4,441,848                            |   |  |                   | 78.28  |  |                                      | 



The fair value of stock options granted
has been measured using the Black Scholes model at the date of the grant. The Black Scholes model includes assumptions regarding
dividend yields, expected volatility, expected term (or “option life”) and risk free interest rates. In respect of
the options granted, the expected term is estimated based on the vesting term, contractual term as well as expected exercise behavior
of the employees receiving the option. Expected volatility of the option is based on historical volatility, during a period equivalent
to the option life, of the observed market prices of the Company’s publicly traded equity shares. Share prices for the year
2011-12 have been eliminated in determining volatility as there had been extra ordinary price movements during the said period
on account of capital infusion by promoters. Dividend yield of the options is based on the recent dividend activity. Risk-free
interest rates are based on the Government securities yield in effect at the time of the grant. These assumptions reflect management’s
best estimates, but these assumptions involve inherent market uncertainties based on market conditions generally outside the Company’s
control. As a result, if other assumptions had been used in the current period, stock-based compensation expense could have been
materially impacted. Further, if management uses different assumptions in the future periods, stock compensation expense could
be materially impacted in future years.



The estimated fair value of stock options
is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award
as if the award was, in substance, multiple awards.



A summary of information about fixed price
stock options outstanding with respect to ASOP 2014 is furnished below:



|As at          |  | Range of
exercise price
in ₹ |  | Number
outstanding at
March 31 |  | Weighted
average
exercise price
in ₹ |  | Weighted average
remaining
contractual life |  | Number
exercisable at
March 31 |  | Weighted
        average
        exercise price
        In ₹
|-------------- |  | ---------------------------- |  | ------------------------------ |  | ------------------------------------ |  | ------------------------------------------- |  | ------------------------------ |  | ------------------------------------------------------------
|March 31, 2020 |  | 57.66 - 146.23               |  | 11,056,100                     |  | 70.90                                |  | 0.80 - 5.84 years                           |  | 4,281,090                      |  | 70.90                                                       
|March 31, 2019 |  | 57.66 - 146.23               |  | 4,588,300                      |  | 78.84                                |  | 0.80 - 5.84 years                           |  | 4,441,848                      |  | 78.84                                                       
|March 31, 2018 |  | 57.66 - 146.23               |  | 5,180,440                      |  | 57.66 - 146.23                       |  | 0.06 - 4.81 years                           |  | 4,340,070                      |  | 78.79                                                       



152







The assumptions used in Black Scholes model
to arrive at the fair value on grant date for the options granted during the year are summarised below:



|Grant date           |  | Apr 22, 2019     |  | Jul 24, 2019     |  | Jul 24, 2019     |  | Oct 19, 2019    
|-------------------- |  | ---------------- |  | ---------------- |  | ---------------- |  | ----------------
|Category             |  | Category III     |  | Category II      |  | Category III     |  | Category III    
|Current market price |  | 106.21           |  | 99.34            |  | 99.34            |  | 101.09          
|Exercise price       |  | 95.59            |  | 89.41            |  | 89.41            |  | 90.98           
|Expected term        |  | 2-5 years        |  | 1-4 years        |  | 2-5 years        |  | 2-5 years       
|Volatility           |  | 31.84% to 65.95% |  | 33.07% to 65.08% |  | 33.07% to 65.08% |  | 31.53% to 60.63%
|Dividend yield       |  | 12%              |  | 12%              |  | 12%              |  | 12%             
|Discount rate        |  | 2%               |  | 2%               |  | 2%               |  | 2%              



| | 28. | Financial income and expense
| | --- | ----------------------------



|                                                                                       |  | Year ended     |           
|-------------------------------------------------------------------------------------- |  | -------------- | ----------
|                                                                                       |  | March 31, 2020 |           
|Interest income on bank deposits                                                       |  |                | 32,094    
|Others                                                                                 |  |                | 161,783   
|Finance income                                                                         |  |                | 193,877   
|Interest expense on lease obligations                                                  |  |                | 171,824   
|Bank charges (including letter of credit, bill discounting and buyer’s credit charges) |  |                | 118,290   
|Interest expense on borrowings                                                         |  |                | 764,018   
|Finance expense                                                                        |  |                | (1,054,132
|Net finance income / (expense) recognized in profit or loss                            |  |                | (860,256  



| | 29. | Earnings per share
| | --- | ------------------



The calculation of basic earnings per share
for the years ended March 31, 2020, 2019 and 2018 is based on the profit / (loss) attributable to ordinary shareholders of ₹
705,599, ₹ 1,068,703 and ₹ 923,401 respectively and a weighted average number of shares outstanding of 179,180,285,
154,330,243 and 150,417,470 respectively, calculated as follows:



|                                            |  | Year ended     |            
|------------------------------------------- |  | -------------- | -----------
|                                            |  | March 31, 2020 |            
|Net profit – as reported                    |  |                | 705,377    
|                                            |  |                |            
|Weighted average number of shares – basic   |  |                | 179,180,285
|Basic earnings per share                    |  |                | 3.94       
|                                            |  |                |            
|Weighted average number of shares – diluted |  |                | 180,643,177
|Diluted earnings per share                  |  |                | 3.90       



Weighted average number of ordinary
shares basic



|                                                                           |  | Year ended March 31, |            
|-------------------------------------------------------------------------- |  | -------------------- | -----------
|                                                                           |  | 2020                 |            
|Issued fully paid ordinary shares at April 01, 2019                        |  |                      | 179,144,347
|Effect of shares issued on exercise of stock options                       |  |                      | 35,938     
|Effect of partly paid shares                                               |  |                      | -          
|Weighted average number of equity shares and equivalent shares outstanding |  |                      | 179,180,285



153







Weighted average number of ordinary
shares diluted



|                                                               |  | Year ended March 31, |            
|-------------------------------------------------------------- |  | -------------------- | -----------
|                                                               |  | 2020                 |            
|Weighted average number of ordinary shares (basic)             |  |                      | 179,180,285
|Effect of stock options (Note 1)                               |  |                      | 1,462,892  
|Weighted average number of equity shares outstanding (diluted) |  |                      | 180,643,177



Note 1:
The Group has issued Associated Stock Options (ASOP 2014 - Refer Note 27) of which 11,056,100 options are outstanding as at March
31, 2020. These could potentially dilute basic earnings per share in the future.



| | 30. | Segment reporting
| | --- | -----------------



The operating
segments of the Group are as under:



Network-centric
services -Domestic data, international data wholesale voice and network managed services



Data Center-centric IT Services



Data Center services:  Co-location
services



Cloud and managed services: IT infra services, IT transformation services, remote and onsite infrastructure managed services and delivery platforms



Technology
integration services:Data Center build, network integration, information security, end user computing and collaborative
tools and solutions



Applications integration services:Application development and maintenance, application testing, mobility solutions, eLearning, portals, online assessment
tools, process and automation.



The Chief Operating
Decision Maker (“CODM”), i.e, The Board of Directors and the senior management, evaluate the Group’s performance
and allocate resources to various strategic business units that are identified based on the products and services that they offer
and on the basis of the market served. The measure of profit / loss reviewed by the CODM is “Earnings/loss before interest,
taxes, depreciation and amortization” also referred to as “segment operating income / loss”. Revenue in relation
to segments is categorized based on items that are individually identifiable to that segment.



Bandwidth costs, which form a significant
part of the total expenses, is allocated to Network Services. Manpower costs of Technology resources rendering services to
support Infrastructure operations, Managed services and Application services, are identified to respective operating segments specifically. The
Group believes that the resulting allocations are reasonable.



Certain expenses, such as depreciation,
technology infrastructure and administrative overheads, which form a significant component of total expenses, are not allocable
to specific segments as the underlying services are used interchangeably. Management believes that it is not practical to provide
segment disclosure of these expenses and, accordingly, they are separately disclosed as “unallocated” and adjusted
only against the total income of the Group.



A significant part of the property, plant
and equipment used in the Group’s business are not identifiable to any of the reportable segments and can be used interchangeably
between segments. Management believes that it is not feasible to provide segment disclosures relating to total assets and liabilities
since meaningful segregation of available data is onerous.



154







The Group’s operating segment information
for the years ended March 31, 2020, 2019 and 2018, are presented below:



Year ended March 31, 2020



|                                             |  |                                                                        |            |   | Data
    Center-centric IT services                               |  |            |                                                                          | 
|-------------------------------------------- |  | ---------------------------------------------------------------------- | ---------- | - | ----------------------------------------------------------------- |  | ---------- | ------------------------------------------------------------------------ | 
|                                             |  | Network-
                                         centric Services (A) |            |   | Data
                                         Center Services (i) |  |            | Cloud
                                         and Managed Services (ii) | 
|Segment revenue                              |  |                                                                        | 12,676,990 |   |                                                                   |  | 3,823,690  |                                                                          | 
|Allocated segment expenses                   |  |                                                                        | (9,493,900 | ) |                                                                   |  | (2,076,043 | )                                                                        | 
|Segment operating income / (loss)            |  |                                                                        | 3,183,090  |   |                                                                   |  | 1,747,647  |                                                                          | 
|Unallocated expenses:                        |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Selling, general and administrative expenses |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Depreciation and amortization                |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Other income / (expense), net                |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Finance income                               |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Finance expenses                             |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Profit / (loss) before tax                   |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Income tax (expense) / benefit               |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Profit / (loss) for the year                 |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 



Year ended March 31, 2019



|                                             |  |                                                                        |            |   | Data Center-centric
    IT services                               |  |            |                                                                          | 
|-------------------------------------------- |  | ---------------------------------------------------------------------- | ---------- | - | ----------------------------------------------------------------- |  | ---------- | ------------------------------------------------------------------------ | 
|                                             |  | Network-
                                         centric Services (A) |            |   | Data
                                         Center Services (i) |  |            | Cloud
                                         and Managed Services (ii) | 
|Segment revenue                              |  |                                                                        | 11,601,041 |   |                                                                   |  | 3,144,900  |                                                                          | 
|Allocated segment expenses                   |  |                                                                        | (8,991,908 | ) |                                                                   |  | (2,015,123 | )                                                                        | 
|Segment operating income / (loss)            |  |                                                                        | 2,609,133  |   |                                                                   |  | 1,129,777  |                                                                          | 
|Unallocated expenses:                        |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Selling, general and administrative expenses |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Depreciation and amortization                |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Other income / (expense), net                |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Finance income                               |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Finance expenses                             |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Profit / (loss) before tax                   |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Income tax (expense) / benefit               |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Profit / (loss) for the
    year             |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 



155







Year ended March 31, 2018



|                                             |  |                                                                        |            |   | Data
    Center-centric IT services                               |  |            |                                                                          | 
|-------------------------------------------- |  | ---------------------------------------------------------------------- | ---------- | - | ----------------------------------------------------------------- |  | ---------- | ------------------------------------------------------------------------ | 
|                                             |  | Network-
                                         centric Services (A) |            |   | Data
                                         Center Services (i) |  |            | Cloud
                                         and Managed Services (ii) | 
|Segment revenue                              |  |                                                                        | 9,981,730  |   |                                                                   |  | 2,434,561  |                                                                          | 
|Allocated segment expenses                   |  |                                                                        | (7,653,359 | ) |                                                                   |  | (1,753,440 | )                                                                        | 
|Segment operating income / (loss)            |  |                                                                        | 2,328,371  |   |                                                                   |  | 681,121    |                                                                          | 
|Unallocated expenses:                        |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Selling, general and administrative expenses |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Depreciation and amortization                |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Other income / (expense), net                |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Finance income                               |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Finance expenses                             |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Profit / (loss) before tax                   |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Income tax (expense) / benefit               |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 
|Profit / (loss) for the
    year             |  |                                                                        |            |   |                                                                   |  |            |                                                                          | 



*The Chief Operating Decision Maker (CODM)
has evaluated and grouped Data Center services, cloud and managed services, technology integration services and applications integration
services into Data Center and IT services. There are no changes in the components of Network service segment. Accordingly, the
segment information has been presented.



Geographic segments



The Group has two geographic segments India
and rest of the world. Revenues from the geographic segments based on domicile of the customer are as follows:



|Description               |  | India |            |  | Rest of the
                                                                                world |  |           | Total | 
|------------------------- |  | ----- | ---------- |  | ------------------------------------------------------------------------------------------------- |  | --------- | ----- | 
|Revenues                  |  |       |            |  |                                                                                                   |  |           |       | 
|Year ended March 31, 2020 |  |       | 17,808,889 |  |                                                                                                   |  | 5,143,178 |       | 
|Year ended March 31, 2019 |  |       | 16,879,558 |  |                                                                                                   |  | 4,667,327 |       | 
|Year ended March 31, 2018 |  |       | 16,649,473 |  |                                                                                                   |  | 4,036,140 |       | 



The Group
does not disclose information relating to non-current assets located in India and rest of the world as the necessary information
is not available and the cost to develop it would be excessive.



During
the year, Group does not have more than 10% of the total revenue from one customer.



| | 31. | Contingencies
| | --- | -------------



| | a) | In the previous years, the Group had received assessment orders from the Income-tax Department
of India (Department) for various financial years disallowing certain expenditure like bandwidth charges and foreign currency payments
for non-deduction of withholding taxes. The Company appealed against those orders before Commissioner of Income Tax (Appeals) (CIT(A))/
Appellate Tribunals and received favorable orders. The department has filed appeals before Hon’ble High Court disputing CIT(A)
orders. The Group believes that the appeal by the department is not sustainable and consequently no loss contingency exists as
at March 31, 2020. Income tax claims against the company as at March 31, 2020 amounted to ₹ Nil (March 31, 2019: ₹
8,028).
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



156







| | b) | Contingencies as at March 31, 2020 due to certain service tax claims amounted to ₹ 434,864
(March 31, 2019: ₹ 443,005) and due to sales tax claims amounted to ₹ 9,386 (March 31, 2019: ₹1,080).
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | The Group has entered into a contract with Emirates Integrated Telecom for the construction and
supply of capacity from the Europe India Gateway. As per the contract with Emirates, the Group is required to pay its share of
decommissioning costs if any that may arise in the future. No provision has been made by the Group for such decommissioning costs
as the amount of provision cannot be measured reliably as at March 31, 2020.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | Effective 2012-13, the Company has participated in the Export Promotion Capital Goods Scheme (“the
scheme”) under which capital equipment is permitted to be imported against a specific license at a substantially reduced
customs duty, subject to fulfilment of obligation to export services rendered by use of capital equipment imported under the scheme
to the extent of over 6 times (March 31,2019: 6 times) the value of duty saved over a period of 6 years (March 31,2019: 6 years)
from the date of obtaining the license. In case of failure to meet the export obligation, the Company would be liable to pay the
differential between the normal duty and the duty saved under the scheme along with interest.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of March 31, 2020, the company is holding
58 (March 31, 2019: 58) licenses with a corresponding export obligation of ₹4,851,099 (March 31, 2019: ₹ 4,851,099). Considering
the track record of the exports, the Company believes it would be able to meet the export-obligation within the time frame and
would not be exposed to any liability on account of the above scheme.



| | e) | In respect of contingencies arising on legal proceedings, refer to Note 32.
| | -- | ---------------------------------------------------------------------------



| | 32. | Legal proceedings
| | --- | -----------------



| | a) | Proceedings before Department of Telecommunications
| | -- | ---------------------------------------------------



| | (i) | License fees
| | --- | ------------



DoT had issued separate licenses
to Sify Technologies Ltd (Sify) for providing Internet, National Long Distance & International Long Distance services.. The
license fee was payable to the DoT on the Adjusted Gross Revenue (AGR) as per the terms of each license. Sify has been regularly
paying license fee on the revenue arising out of services as per the license conditions.



DoT has raised demands on service
providers providing Internet, NLD, ILD services etc. demanding license fee on the revenue made by the service providers from other
business income such as Data Centre, Cloud, application services, power, Gas, etc. DoT contended that all the income of the company
irrespective of the business was required to be considered as part of 'income' for the purpose of calculation of the license fee.
The Internet Service Providers through its association ISPAI challenged DoT's demand by way of separate petitions. The company
filed a Writ Petition before Hon’ble Madras High Court challenging the demand made by DoT on the Income accruing from other
business units which is still pending. Meanwhile TDSAT passed a separate order in favor of Access Telecom service providers &
Internet Service Providers.



"DoT subsequently challenged
the order of TDSAT passed in favor of Access Telecom Service Providers before Hon’ble Supreme Court of India. The Hon’ble
Supreme Court by its order dated 24.10.2019 set aside the order of the TDSAT & held that Access Telecom Service Providers should
pay the license fee as per its license conditions.



DoT attempted to apply the judgement
of the Hon’ble Supreme Court on the Service Providers providing ISP, NLD, ILD services. These Service providers which had
different license conditions and having revenue from other business units approached the Hon’ble Supreme Court stating that
Hon’ble Supreme Court judgement dated 24.10.2019 on the access Telecom Service Providers is not applicable to other services
providers as license conditions were different from the Access Telecom Service Providers. The Hon’ble Supreme Court chose
not to hear the petitions and directed the other service providers to approach the appropriate forum.



157







The Company which had approached
Hon’ble High Court of Madras (Court) in 2013 by filing a writ petition prohibiting Department of Telecommunications (DOT)
from levying a license fee on non-licensed activities obtained stay of the demands. The Hon’ble Court restrained DoT from
recovering the license fee in respect of non- telecom activities and the case is pending for hearing. The Company believes that
it has adequate legal defenses against the demand raised by DoT and that the ultimate outcome of these actions will not have a
material adverse effect on the Company's financial position and result of operations. ISPAI, association representing the internet
service providers including the company issued a letter to DoT stating that the Hon’ble Supreme Court judgement dated 24.10.2019
is not applicable to Internet Service Providers and the license conditions are different.



The Company which had received
notices for earlier years from DoT claiming License fee on the total Income (including income from Non Licensed activities) has
already responded to these notices stating that license fees are not payable on income from non-licensed activities. The Company
believes that it has adequate legal defenses against these notices and that the ultimate outcome of these actions may not have
a material adverse effect on the Company's financial position and result of operations.""



DoT in its written submission
made before the Hon’ble Supreme Court had clearly mentioned that non telecom revenue would stand excluded from the purview
of the gross revenue . In 2017, the Hon’ble Tripura High Court held that Service Providers are not liable to pay license
fee on the income accruing from other businesses."



| | (ii) | The present license for ISP under Unified License issued
by DOT on June 2, 2014 provides for payment of License fee on pure internet services. However, the Company through Internet Service
Providers Association of India (ISPAI) challenged the said clause before TDSAT and has not made payment in this regard. TDSAT
passed a stay order on DOT from charging the License fee on pure internet services. The Company has appropriately accounted for
any adverse effect that may arise in this regard in the books of account. However TDSAT by its order dated 18.10.2019 held that
license fee is not chargeable on the Internet Service Providers.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



b) The Group is party to additional legal
actions arising in the ordinary course of business. Based on the available information as at March 31, 2020, the Group believes
that it has adequate legal defense for these actions and that the ultimate outcome of these actions will not have a material adverse
effect [the maximum financial exposure would be ₹ 88,257 (March 31, 2019: ₹ 91,629)] on the Group's financial position
and results of operations.



c) The Company has received an order passed
under section 7A of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 from Employees Provident Fund Organization
(EPFO) claiming provident fund contribution aggregating to ₹ 6,432 on special allowances paid to employees. The company has
filed a writ petition before High court of Madras and obtained the stay of demand. In Feb 2019, the Supreme Court held, in a similar
case, that Special allowances paid by the employer to its employee will be included in the scope of basic wages and subject to
provident fund contribution. However, the Supreme Court has not fixed the effective date of order.



d) During the year, Directorate General
of Goods and Services Tax Intelligence (DGGI) did an inspection based on the analysis of service tax returns filed by the Group
in the past. The Group has been categorising services relating to e-Learning and Infrastructure Management Services provided to
foreign customers billed in convertible foreign currency under OIDAR services while filing its half-yearly service tax return.
However, based on the Place of Provision of Services Rules then applicable under the Finance Act, 1994, Service Tax has to be paid
for OIDAR services provided to foreign customers even if the conditions for qualifying as export of services are met. Hence, the
DGGI contended that Service Tax should be paid on the services classified as OIDAR services in the returns. The total contended
during the period April 2014 to November 2016 of Service Tax was ₹ 161,800 and the Interest & Penalty as applicable.
The Group believes that the services relating to e-learning and infrastructure management services will not fall under OIDAR services
and also the activities covered under E-learning and IMS does not meet the conditions for taxation under the provisions applicable
as OIDAR and hence there is no liability. However, during the investigation, the Group has paid ₹ ₹ 64,600 under protest
to continue the proceeding with the relevant adjudicating authorities. Thereafter, the DGGI has issued Show Cause Notice and the
Group has replied on the same. The matter is pending with the Adjudicating Authority. The Group believes that no provision is required
to be made against this demand.



158







| | 33. | Related parties
| | --- | ---------------



The related parties where control / significant
influence exists are subsidiaries and associates. Key management personnel are those persons having authority and responsibility
for planning, directing and controlling the activities of the entity, directly or indirectly, including any director whether executive
or otherwise. Key management personnel include the board of directors and other senior management executives. The other related
parties are those with whom the Group has had transaction during the years ended March 31, 2020, 2019 and 2018 are as follows:



|Particulars                                                                                                         |  | Country of incorporation |  | % of Ownership interest |    
|------------------------------------------------------------------------------------------------------------------- |  | ------------------------ |  | ----------------------- | ---
|                                                                                                                    |  |                          |  | March 31, 2020          |    
|Holding Company                                                                                                     |  |                          |  |                         |    
|Infinity Satcom Universal Private Limited                                                                           |  | India                    |  |                         | -  
|Raju Vegesna Infotech & Industries Private Limited (Subsidiary of Infinity Satcom Universal Private Limited)        |  | India                    |  |                         | -  
|Ramanand Core Investment Company Private Limited (Subsidiary of Raju Vegesna Infotech & Industries Private Limited) |  | India                    |  |                         | -  
|Subsidiaries                                                                                                        |  |                          |  |                         |    
|Sify Technologies (Singapore) Pte. Limited                                                                          |  | Singapore                |  |                         | 100
|Sify Technologies North America Corporation                                                                         |  | USA                      |  |                         | 100
|Sify Data and Managed Services Limited                                                                              |  | India                    |  |                         | 100
|Sify Infinit Spaces Limited                                                                                         |  | India                    |  |                         | 100



The following is a summary of the related
party transactions for the year ended March 31, 2020:



|Transactions                                         |  | Holding Company |         |  | Associates |  |   | Others |  |  | Key Management Personnel | 
|---------------------------------------------------- |  | --------------- | ------- |  | ---------- |  | - | ------ |  |  | ------------------------ | 
|Consultancy services received                        |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Sitting fees paid                                    |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Salaries and other short term benefits               |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Contributions to defined contribution plans          |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Share based payment transactions                     |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Lease rentals paid**                                 |  |                 | 1,190   |  |            |  | - |        |  |  | 6,713                    | 
|Dividend paid                                        |  |                 | 137,900 |  |            |  | - |        |  |  | 17,400                   | 
|Advances given                                       |  |                 | -       |  |            |  | - |        |  |  | 3,000                    | 
|Amount of outstanding balances                       |  |                 |         |  |            |  |   |        |  |  |                          | 
|Advance lease rentals and refundable deposits made** |  |                 | -       |  |            |  | - |        |  |  | 5,600                    | 
|Lease rentals payable**                              |  |                 | -       |  |            |  | - |        |  |  | 820                      | 



159







The following is a summary of the related
party transactions for the year ended March 31, 2019:



|Transactions                                         |  | Holding Company |         |  | Associates |  |   | Others |  |  | Key Management Personnel | 
|---------------------------------------------------- |  | --------------- | ------- |  | ---------- |  | - | ------ |  |  | ------------------------ | 
|Consultancy services received                        |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Sitting fees paid                                    |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Salaries and other short term benefits               |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Contributions to defined contribution plans          |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Share based payment transactions                     |  |                 | -       |  |            |  | - |        |  |  | -                        | 
|Lease rentals paid**                                 |  |                 | 1,190   |  |            |  | - |        |  |  | 4,535                    | 
|Dividend paid                                        |  |                 | 133,677 |  |            |  | - |        |  |  | 17,436                   | 
|Call money received                                  |  |                 | 900,000 |  |            |  | - |        |  |  | -                        | 
|Amount of outstanding balances                       |  |                 |         |  |            |  |   |        |  |  |                          | 
|Advance lease rentals and refundable deposits made** |  |                 | -       |  |            |  | - |        |  |  | 2,600                    | 
|Lease rentals payable**                              |  |                 | -       |  |            |  | - |        |  |  | 563                      | 



The following is a summary of the related
party transactions for the year ended March 31, 2018:



|Transactions                                         |  | Holding
 Company |         |  | Associates |  |   | Others |  |  | Key 
Management
 Personnel | 
|---------------------------------------------------- |  | ---------------- | ------- |  | ---------- |  | - | ------ |  |  | -------------------------- | 
|Consultancy services received                        |  |                  | -       |  |            |  | - |        |  |  | -                          | 
|Sitting fees paid                                    |  |                  | -       |  |            |  | - |        |  |  | -                          | 
|Salaries and other short term benefits               |  |                  | -       |  |            |  | - |        |  |  | -                          | 
|Contributions to defined contribution plans          |  |                  | -       |  |            |  | - |        |  |  | -                          | 
|Share based payment transactions                     |  |                  | -       |  |            |  | - |        |  |  | -                          | 
|Lease rentals paid**                                 |  |                  | 1,061   |  |            |  | - |        |  |  | 4,483                      | 
|Dividend paid                                        |  |                  | 126,600 |  |            |  | - |        |  |  | 16,700                     | 
|Call money received                                  |  |                  |         |  |            |  | - |        |  |  | -                          | 
|Amount of outstanding balances                       |  |                  |         |  |            |  |   |        |  |  |                            | 
|Advance lease rentals and refundable deposits made** |  |                  | -       |  |            |  | - |        |  |  | 2,600                      | 
|Lease rentals payable**                              |  |                  | -       |  |            |  | - |        |  |  | 125                        | 



**During the year 2011 -12, the Company
had entered into a lease agreement with M/s Raju Vegesna Infotech and Industries Private Limited, the holding Company, to lease
the premises owned by it for a period of three years effective February 1, 2012 on a rent of ₹ 75 (Rupees Seventy Five Thousand
Only) per month. Subsequently, the Company entered into an amendment agreement with effect from April 1, 2013, providing for automatic
renewal for a further period of two blocks of 3 years with an escalation of 15% on the last paid rent after the end of every three
years.



During the year 2011 - 12, the Company
had also entered into a lease agreement with M/s Raju Vegesna Developers Private Limited, a Company in which Mr. Ananda Raju Vegesna,
Executive Director of the Company and Mr. Raju Vegesna, Chairman and Managing director of the Company exercise significant influence,
to lease the premises owned by it for a period of three years effective February 1, 2012 on a rent of ₹ 30 (Rupees Thirty
Thousand Only) per month. The agreement provides for the automatic renewal for further period of two blocks of 3 years with an
escalation of 15% on the last paid rent after the end of every three years.



During the year 2010-11, the Company had
entered into a lease agreement with Ms. Radhika Vegesna, daughter of Mr. Ananda Raju Vegesna, Executive Director of the company,
to lease the premises owned by her for a period of three years effective June 1, 2010 on a rent of ₹294 (Rupees Two Ninety
Four Thousand Only) per month and payment of refundable security deposit of ₹2,558. This arrangement will automatically be
renewed for a further period of two blocks of three years with all the terms remaining unchanged. Subsequently on account of expiry
of the said agreement, the company entered into a fresh agreement for a period of three years effective June 1, 2019 on a rent
of ₹ 556 (Rupees Five hundred and Fifty Six Thousand Only) per month and payment of additional refundable security deposit
of ₹3,000. This arrangement will automatically be renewed for a further period of two blocks of three years with all the
terms remaining unchanged.



160







| | 34. | Financial instruments
| | --- | ---------------------



Financial instruments by category



The carrying value and fair value of financial
instruments by each category as at March 31, 2020 were as follows:



|Particulars                      |  | Note |  | Financial assets/ liabilities at amortised costs |           |  | Financial assets / liabilities at FVTPL |  |     | Financial assets / liabilities at FVTOCI |  |  | Total carrying value |  |  | Total fair value |          
|-------------------------------- |  | ---- |  | ------------------------------------------------ | --------- |  | --------------------------------------- |  | --- | ---------------------------------------- |  |  | -------------------- |  |  | ---------------- | ---------
|Assets                           |  |      |  |                                                  |           |  |                                         |  |     |                                          |  |  |                      |  |  |                  |          
|Cash and cash equivalents        |  | 8    |  |                                                  | 2,651,085 |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 2,651,085
|Other assets                     |  | 10   |  |                                                  | 350,972   |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 350,972  
|Trade receivables                |  | 13   |  |                                                  | 9,631,400 |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 9,631,400
|Other receivables                |  | 13   |  |                                                  | 139,122   |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 139,122  
|Other investments                |  | 15   |  |                                                  | 210,262   |  |                                         |  | -   |                                          |  |  | 1,710                |  |  |                  | 211,972  
|Liabilities                      |  |      |  |                                                  |           |  |                                         |  |     |                                          |  |  |                      |  |  |                  |          
|Bank overdraft                   |  | 8    |  |                                                  | 1,235,794 |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 1,235,794
|Lease liabilities                |  | 7    |  |                                                  | 1,826,210 |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 1,826,210
|Other liabilities                |  | 18   |  |                                                  | 77,746    |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 77,746   
|Borrowings from banks            |  | 19   |  |                                                  | 5,985,628 |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 5,985,628
|Borrowings from others           |  | 19   |  |                                                  | 2,117,108 |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 2,117,108
|Trade and other payables         |  | 20   |  |                                                  | 8,366,215 |  |                                         |  | -   |                                          |  |  | -                    |  |  |                  | 8,366,215
|Derivative financial liabilities |  | 20   |  |                                                  | -         |  |                                         |  | 428 |                                          |  |  | -                    |  |  |                  | 428      



The carrying value and fair value of financial
instruments by each category as at March 31, 2019 were as follows:



|Particulars                      |  | Note |  | Financial assets/ liabilities at amortised costs |            |  | Financial assets / liabilities at FVTPL |  |       | Financial assets / liabilities at FVTOCI |  |  | Total carrying value |  |  | Total fair value |           
|-------------------------------- |  | ---- |  | ------------------------------------------------ | ---------- |  | --------------------------------------- |  | ----- | ---------------------------------------- |  |  | -------------------- |  |  | ---------------- | ----------
|Assets                           |  |      |  |                                                  |            |  |                                         |  |       |                                          |  |  |                      |  |  |                  |           
|Cash and cash equivalents        |  | 8    |  |                                                  | 2,247,975  |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 2,247,975 
|Other assets                     |  | 10   |  |                                                  | 347,189    |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 347,189   
|Trade receivables                |  | 13   |  |                                                  | 10,003,960 |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 10,003,960
|Other receivables                |  | 13   |  |                                                  | 69,513     |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 69,513    
|Other investments                |  | 15   |  |                                                  | 192,929    |  |                                         |  | -     |                                          |  |  | 1,710                |  |  |                  | 194,639   
|Liabilities                      |  |      |  |                                                  |            |  |                                         |  |       |                                          |  |  |                      |  |  |                  |           
|Bank overdraft                   |  | 8    |  |                                                  | 1,553,203  |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 1,553,203 
|Finance lease liabilities        |  |      |  |                                                  | 96,879     |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 96,879    
|Other liabilities                |  | 18   |  |                                                  | 172,423    |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 172,423   
|Borrowings from banks            |  | 19   |  |                                                  | 4,217,112  |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 4,217,112 
|Borrowings from others           |  | 19   |  |                                                  | 2,441,199  |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 2,441,199 
|Trade and other payables         |  | 20   |  |                                                  | 7,442,360  |  |                                         |  | -     |                                          |  |  | -                    |  |  |                  | 7,442,360 
|Derivative financial liabilities |  | 20   |  |                                                  | -          |  |                                         |  | 5,066 |                                          |  |  | -                    |  |  |                  | 5,066     



161







Details of financial assets hypothecated
as collateral

The carrying amount of financial assets as
at March 31, 2020 and 2019 that the Group has provided as collateral for obtaining borrowings and other facilities from its bankers
are as follows:



|                          |  | As of          |           
|------------------------- |  | -------------- | ----------
|                          |  | March 31, 2020 |           
|Cash and cash equivalents |  |                | 2,461,808 
|Other assets              |  |                | 243,723   
|Trade receivables         |  |                | 9,557,475 
|Other receivables         |  |                | 63,221    
|                          |  |                | 12,326,227



Derivative financial instruments



| | (a) | Forwards and options
| | --- | --------------------

Foreign exchange forward contracts
and options are purchased to mitigate the risk of changes in foreign exchange rates associated with certain payables, receivables
and forecasted transactions denominated in certain foreign currencies. These derivative contracts do not qualify for hedge accounting
under IFRS 9 and are initially recognized at fair value on the date the contract is entered into and subsequently re-measured at
their fair value. Gains or losses arising from changes in the fair value of the derivative contracts are recognized immediately
in profit or loss. The counterparties for these contracts are generally banks or financial institutions. The following table gives
details in respect of the notional amount of outstanding foreign exchange contracts as at March 31, 2020 and 2019.



|                       |  | As of          |      
|---------------------- |  | -------------- | -----
|                       |  | March 31, 2020 |      
|Forward contracts      |  |                |      
|In U.S. Dollars (Sell) |  |                | 2,140
|In U.S. Dollars (Buy)  |  |                | -    



The Company recognized a net loss on the
forward contracts of ₹ 8,660 (March 31, 2019: ₹ 9,164 – Net Loss) for the year ended March 31, 2020.



The forward exchange contracts and option
contracts mature between one and twelve months. The table below summarizes the notional amounts of derivative financial instruments
into relevant maturity groupings based on the remaining period as at the end of the year:



|                                                      |  | As of          |      
|----------------------------------------------------- |  | -------------- | -----
|                                                      |  | March 31, 2020 |      
|Buy:                                                  |  | (US $)         |      
|Not later than one month                              |  |                | -    
|Later than one month and not later than three months  |  |                | 2,140
|Later than three months and not later than six months |  |                | -    
|Later than six months and not later than one year     |  |                | -    



162







| | (b) | Cross Currency Swap:
| | --- | --------------------



The Group
enters into Cross Currency Swaps (Principal Only Swap arrangement) in order to hedge the cash flows arising out of the Principal
and Interest payments of the underlying INR term loan. The period of the swap contracts is co terminus with the period of the underlying
term loans. As per the terms of the arrangement, the Company shall pay USD fixed and receive fixed INR principal and interest cash
flows during the term of the contract. The swap arrangement is marked to market at the end of every period and losses are recognised
in the Statement of Profit and Loss. The swap contracts are settled before maturity during the current year and there are no outstanding
balances as on March 31, 2020.



| | (c) | Interest Rate Swap:
| | --- | -------------------



During
the current year, the Group has entered into Interest Rate Swaps in order to hedge the cash flows arising out of the Interest payments
of the underlying US $ term loan. The period of the swap contract is co terminus with the period of the underlying term loan. As
per the terms of the arrangement, the Group shall pay fixed rate of interest (ranging from 6.3% p.a. to 6.5% p.a.) and receive
variable rate of interest equal to LIBOR + fixed rate (ranging from LIBOR + 3.5% to LIBOR + 4.5%) on notional amount. The swap
arrangement is marked to market at the end of every period and gains and losses are recognized in the Statement of Income.



The maturity of these contracts extends
for five years. The table below summarizes the cash flows (interest) of these derivative financial instruments into relevant maturity
groupings based on the remaining period as at the end of the year:



|                    |  | As of             |  
|------------------- |  | ----------------- | -
|                    |  | March 31, 2020    |  
|                    |  | Receivable (US $) |  
|Less than 1 year    |  |                   | 4
|One to two years    |  |                   | -
|Two to three years  |  |                   | -
|Three to four years |  |                   | -
|Four to five years  |  |                   | -
|Total cash flows    |  |                   | 4



Total
notional amount outstanding as of March 31, 2020 is US $ 492 (March 31, 2019: US $ 3,163).



Net loss
on account of interest rate swaps amount to ₹ 1,742 for the year ended March 31, 2020 (March 31, 2019: ₹ 3,838 –
Net loss).



Fair value measurements:



The details
of assets and liabilities that are measured on fair value on recurring basis are given below:



|                                                                                 |  | Fair value as of March 31, 2020 |   |  | Fair value as of March 31, 2019 | 
|-------------------------------------------------------------------------------- |  | ------------------------------- | - |  | ------------------------------- | 
|                                                                                 |  | Level 1                         |   |  | Level 2                         | 
|Assets                                                                           |  |                                 |   |  |                                 | 
|Derivative financial assets – gain on outstanding forward/options contracts      |  |                                 | - |  |                                 | 
|Liabilities                                                                      |  |                                 |   |  |                                 | 
|Derivative financial liabilities – loss on outstanding forward/options contracts |  |                                 | - |  |                                 | 
|Derivative financial liabilities - loss on outstanding cross currency swaps      |  |                                 | - |  |                                 | 
|Derivative financial liabilities - loss on outstanding interest rate swaps       |  |                                 | - |  |                                 | 



163







| | · | Level 1 – unadjusted quoted prices in active markets for identical assets and liabilities.
| | - | ------------------------------------------------------------------------------------------

| | · | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level 3 – unobservable inputs for the asset or liability
| | - | --------------------------------------------------------

| | o | Loss on cross currency swaps are valued using present value of cash flows from the swap contract
estimated using swap rates calculated from respective countries’ yield curves.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Interest income/ (expenses), gains/
(losses) recognized on financial assets and liabilities



Recognized in profit or loss



|                                                                         |  | Year ended     |         
|------------------------------------------------------------------------ |  | -------------- | --------
|                                                                         |  | March 31, 2020 |         
|Financial assets at amortised cost                                       |  |                |         
|Interest income on bank deposits                                         |  |                | 32,094  
|Interest income from other financial assets                              |  |                | 161,826 
|Impairment loss of trade receivables                                     |  |                | (479,747
|                                                                         |  |                |         
|Financial assets at fair value through profit or loss                    |  |                |         
|Net change in fair value of derivative financial instruments gain/(loss) |  |                | 380     
|                                                                         |  |                |         
|Financial liabilities at amortised cost                                  |  |                |         
|Interest expenses on lease obligations                                   |  |                | (171,824
|Interest expenses on borrowings from banks, others and overdrafts        |  |                | (764,398



| | 35. | Financial Risk Management
| | --- | -------------------------



The Group has exposure to the following
risks from its use of financial instruments:



| | · | Credit risk
| | - | -----------

| | · | Liquidity risk
| | - | --------------

| | · | Market risk
| | - | -----------



The Board of Directors has overall responsibility
for the establishment and oversight of the Group’s risk management framework. The Board of Directors has established a risk
management policy to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor
risks and adherence to limits. Risk management systems are reviewed periodically to reflect changes in market conditions and the
Group’s activities. The Group Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the risk management framework. The Group Audit Committee is assisted in its oversight role
by Internal Audit. Internal Audit undertakes reviews of risk management controls and procedures, the results of which are reported
to the Audit Committee.



164







Credit risk: Credit risk is the
risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations
and arises principally from the Group’s trade receivables, treasury operations and other activities that are in the nature
of leases.



Trade and other receivables

The Group’s exposure to credit risk
is influenced mainly by the individual characteristics of each customer. Management considers that the demographics of the Group’s
customer base, including the default risk of the industry and country in which customers operate, has less of an influence on credit
risk.. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness
of the customers to which the Company grants credit terms in the normal course of the business. The expected credit loss over life
time of the asset is after consideration of current economic conditions prevailing on the date of approval of financial statements
taking into account impact of global health pandemic COVID 19. The actual impact could be different.



Cash and cash equivalents and other
investments

In the area of treasury operations, the
Group is presently exposed to counter-party risks relating to short term and medium term deposits placed with public-sector banks,
and also to investments made in mutual funds.



The Chief Financial Officer is responsible
for monitoring the counterparty credit risk and has been vested with the authority to seek Board’s approval to hedge such
risks in case of need.



Exposure to credit risk



The gross carrying amount of financial
assets, net of any impairment losses recognized represents the maximum credit exposure. The maximum exposure to credit risk as
at March 31, 2020 and 2019 was as follows:



|                          |  | March 31, 2020 |            |  | March 31, 2019 | 
|------------------------- |  | -------------- | ---------- |  | -------------- | 
|Cash and cash equivalents |  |                | 2,651,085  |  |                | 
|Other assets              |  |                | 350,972    |  |                | 
|Trade receivables         |  |                | 9,631,400  |  |                | 
|Other receivables         |  |                | 139,122    |  |                | 
|Other investments         |  |                | 211,972    |  |                | 
|                          |  |                | 12,984,551 |  |                | 



Impairment for financial assets



Allowances for impairment for trade receivables
have been provided based on Expected Credit Loss Method adopting a simplified approach provided in IFRS 9. The age analysis of
trade receivables have been considered from the date of invoice. The ageing of trade receivables, net of allowances, is given below:



|Period (in days)   |  | March 31, 2020 |           |  | March 31, 2019 | 
|------------------ |  | -------------- | --------- |  | -------------- | 
|Less than 365 days |  |                | 8,013,316 |  |                | 
|More than 365 days |  |                | 1,618,084 |  |                | 
|                   |  |                | 9,631,400 |  |                | 



See note 13 for the activity in the allowance
for impairment of trade account receivables.



165







Liquidity risks: Liquidity risk
is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far
as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation. Typically the Group ensures that it has
sufficient cash on demand to meet expected operational expenses, servicing of financial obligations. In addition, the Group has
concluded arrangements with well reputed Banks, and has unused lines of credit that could be drawn upon should there be a need.
The Company is also in the process of negotiating additional facilities with Banks for funding its requirements.



The following are the
contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:



As at March 31, 2020



|                                     |  | Carrying amount |            |  | Contractual cash flows |  |            | 0-12 months |  |  | 1-3 years  |  |  | 3-5 years |           |  | >5 years | 
|------------------------------------ |  | --------------- | ---------- |  | ---------------------- |  | ---------- | ----------- |  |  | ---------- |  |  | --------- | --------- |  | -------- | 
|Non-derivative financial liabilities |  |                 |            |  |                        |  |            |             |  |  |            |  |  |           |           |  |          | 
|Bank overdrafts                      |  |                 | 1,235,558  |  |                        |  | 1,235,558  |             |  |  | 1,235,558  |  |  |           | -         |  |          | 
|Lease liabilities                    |  |                 | 1,826,210  |  |                        |  | 2,967,267  |             |  |  | 464,548    |  |  |           | 610,652   |  |          | 
|Other liabilities                    |  |                 | 77,746     |  |                        |  | 77,746     |             |  |  | 77,746     |  |  |           | -         |  |          | 
|Borrowing from banks                 |  |                 | 5,985,627  |  |                        |  | 6,611,502  |             |  |  | 3,533,733  |  |  |           | 2,214,884 |  |          | 
|Borrowings from others               |  |                 | 2,125,337  |  |                        |  | 2,370,448  |             |  |  | 1,341,784  |  |  |           | 1,005,697 |  |          | 
|Trade and other payables             |  |                 | 8,366,215  |  |                        |  | 8,366,215  |             |  |  | 8,366,215  |  |  |           | -         |  |          | 
|                                     |  |                 | 19,616,693 |  |                        |  | 21,628,736 |             |  |  | 15,019,584 |  |  |           | 3,831,233 |  |          | 



As at March 31, 2019



|                                     |  | Carrying amount |            |  | Contractual cash flows |  |            | 0-12 months |  |  | 1-3 years  |  |  | 3-5 years |          
|------------------------------------ |  | --------------- | ---------- |  | ---------------------- |  | ---------- | ----------- |  |  | ---------- |  |  | --------- | ---------
|Non-derivative financial liabilities |  |                 |            |  |                        |  |            |             |  |  |            |  |  |           |          
|Bank overdrafts                      |  |                 | 1,553,203  |  |                        |  | 1,553,203  |             |  |  | 1,553,203  |  |  |           | -        
|Finance lease liabilities            |  |                 | 96,879     |  |                        |  | 105,456    |             |  |  | 76,651     |  |  |           | 28,805   
|Other liabilities                    |  |                 | 172,423    |  |                        |  | 172,423    |             |  |  | 172,423    |  |  |           | -        
|Borrowing from banks                 |  |                 | 4,217,112  |  |                        |  | 4,773,794  |             |  |  | 2,476,767  |  |  |           | 1,753,552
|Borrowings from others               |  |                 | 2,441,199  |  |                        |  | 2,759,903  |             |  |  | 1,323,890  |  |  |           | 1,345,659
|Trade and other payables             |  |                 | 7,447,426  |  |                        |  | 7,447,426  |             |  |  | 7,447,426  |  |  |           | -        
|                                     |  |                 | 15,928,242 |  |                        |  | 16,812,205 |             |  |  | 13,050,360 |  |  |           | 3,128,016



Market risk:Market risk is the
risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument.
The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market
changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments
including foreign currency receivables and payables. The Group is exposed to market risk primarily related to foreign exchange
rate risk (currency risk), interest rate risk and the market value of its investments. Thus the Group’s exposure to market
risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.



Currency risk: The Group’s
exposure in US $, Euro and other foreign currency denominated transactions gives rise to Exchange Rate fluctuation risk. Group’s
policy in this regard incorporates:



| | · | Forecasting inflows and outflows denominated in US$ for a twelve-month period
| | - | -----------------------------------------------------------------------------

| | · | Estimating the net-exposure in foreign currency, in terms of timing and amount
| | - | ------------------------------------------------------------------------------



166







| | · | Determining the extent to which exposure should be protected through one or more risk-mitigating
instruments to maintain the permissible limits of uncovered exposures.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Carrying out a variance analysis between estimate and actual on an ongoing basis and taking stop-loss
action when the adverse movements breaches the 5% barrier of deviation, subject to review by Audit Committee.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Group’s exposure to foreign currency
risk as at March 31, 2020 was as follows:



All amounts in respective currencies as
mentioned (in thousands)

|                           |  | US $ |        |   | CA $ |  |   | CHF |  |  | EUR |   |  | GBP |     |   | DHS |  |     | HK $ |  |  | SG $ |  
|-------------------------- |  | ---- | ------ | - | ---- |  | - | --- |  |  | --- | - |  | --- | --- | - | --- |  | --- | ---- |  |  | ---- | -
|Cash and cash equivalents  |  |      | 3,173  |   |      |  | - |     |  |  | -   |   |  |     | -   |   |     |  | 108 |      |  |  | -    |  
|Trade receivables          |  |      | 17,406 |   |      |  | - |     |  |  | -   |   |  |     | 47  |   |     |  | 40  |      |  |  | -    |  
|Trade payables             |  |      | (9,366 | ) |      |  | - |     |  |  | (1  | ) |  |     | (26 | ) |     |  | 7   |      |  |  | (51  | )
|Foreign currency loan      |  |      | (9,688 | ) |      |  | - |     |  |  | -   |   |  |     | -   |   |     |  | -   |      |  |  | -    |  
|Net balance sheet exposure |  |      | 1,525  |   |      |  | - |     |  |  | (1  | ) |  |     | 21  |   |     |  | 155 |      |  |  | (51  | )



The Group’s exposure to foreign currency
risk as at March 31, 2019 was as follows:



All amounts in respective currencies as
mentioned (in thousands)

|                           |  | US $ |         |   | CA $ |  |   | CHF |  |  | EUR |   |  | GBP |     |   | DHS |  |   | HK $ | 
|-------------------------- |  | ---- | ------- | - | ---- |  | - | --- |  |  | --- | - |  | --- | --- | - | --- |  | - | ---- | 
|Cash and cash equivalents  |  |      | 2,776   |   |      |  | - |     |  |  | -   |   |  |     | -   |   |     |  | - |      | 
|Trade receivables          |  |      | 12,704  |   |      |  | - |     |  |  | 1   |   |  |     | 16  |   |     |  | - |      | 
|Trade payables             |  |      | (7,660  | ) |      |  | - |     |  |  | (1  | ) |  |     | (55 | ) |     |  | - |      | 
|Foreign currency loan      |  |      | (11,459 | ) |      |  | - |     |  |  | -   |   |  |     | -   |   |     |  | - |      | 
|Net balance sheet exposure |  |      | (3,639  | ) |      |  | - |     |  |  | -   |   |  |     | (39 | ) |     |  | - |      | 



Sensitivity analysis



A 10% strengthening of the rupee against
the respective currencies as at March 31, 2020 and 2019 would have increased / (decreased) other comprehensive income and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
The analysis is performed on the same basis for 2019.



|               |  | Other comprehensive income |   |  | Profit or ( loss) | 
|-------------- |  | -------------------------- | - |  | ----------------- | 
|March 31, 2020 |  |                            | - |  |                   | 
|March 31, 2019 |  |                            | - |  |                   | 



A 10% weakening of the rupee against the
above currencies as at March 31, 2020 and 2019 would have had the equal but opposite effect on the above currencies to the amounts
shown above, on the basis that all other variables remain constant.



Interest Rate Risk: Interest rate
risk is the risk that an upward movement in interest rates would adversely affect the borrowing costs of the group.



Profile

At the reporting date
the interest rate profile of the Group’s interest –bearing financial instruments were as follows:



|                                |  | Carrying amount |          
|------------------------------- |  | --------------- | ---------
|                                |  | March 31, 2020  |          
|Fixed rate instruments          |  |                 |          
|Financial assets                |  |                 |          
|- Fixed deposits with banks     |  |                 | 548,348  
|- Investment in debt securities |  |                 | 210,262  
|                                |  |                 |          
|Financial liabilities           |  |                 |          
|- Borrowings from banks         |  |                 | 308,748  
|- Borrowings from others        |  |                 | 2,221,885
|                                |  |                 |          
|Variable rate instruments       |  |                 |          
|Financial liabilities           |  |                 |          
|- Borrowings from banks         |  |                 | 5,676,879
|- Bank overdrafts               |  |                 | 1,235,558



167







Fair value sensitivity
for fixed rate instruments



The
Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group
does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore
a change in interest rates at the reporting date would not affect profit or loss.



Cash
flow sensitivity for variable rate instruments



An
increase of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or loss
by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
The analysis has been performed on the same basis as 2019.



|               |  | Equity |   |  | Profit or (loss) | 
|-------------- |  | ------ | - |  | ---------------- | 
|March 31, 2020 |  |        | - |  |                  | 
|March 31, 2019 |  |        | - |  |                  | 



A
decrease of 100 basis points in the interest rates at the reporting date would have had equal but opposite effect on the amounts
shown above, on the basis that all other variable remain constant.



| | 36. | Issue of shares on a private placement basis to the existing promoter group
| | --- | ---------------------------------------------------------------------------



On August
4, 2010, the Board of Directors of the company approved the issuance, in a private placement, of up to an aggregate of 125,000,000
of the company’s equity shares, par value ₹ 10 per share (“Equity shares”) at a discount compared to market
value of , for an aggregate purchase price of ₹ 4,000,000, to a group of investors affiliated with the company’s promoter
group, including entities affiliated with Mr Raju Vegesna, the company’s CEO, Chairman and Managing Director and Mr Ananda
Raju Vegesna, Executive Director and brother of Mr Raju Vegesna (the “Offering”). The company’s shareholders
approved the terms of the Offering at the Company’s Annual General Meeting held on September 27, 2010.



On October
22 2010, the company entered into a Subscription Agreement with Mr Ananda Raju Vegesna, acting as representative (the “Representative”)
of the purchasers in connection with the Offering. In pursuance of the Agreement, the company issued and allotted 125,000,000 equity
shares to M/s Raju Vegesna Infotech and Industries Private Limited (“RVIIPL”), a promoter group company. In accordance
with Indian law, the purchase price is to be paid at such time as determined by Board of Directors of the company.



On August
14, 2011, the company received a letter from RVIIPL expressing its intention to transfer the above partly paid shares to its wholly
owned subsidiary M/s Ramanand Core Investment Company Private limited (“RCICPL”). The company, on August 26, 2011,
registered such transfer of partly paid shares in the name of RCICPL.



On September 7,
2011, the parties entered into an amendment to the Subscription Agreement (the “Amendment”) extending the validity
of the agreement period to September 26, 2013. This Amendment provides the Board of Directors of the Company with additional
time to call upon the purchasers to pay the balance money, in accordance with the terms of the Subscription Agreement.



During
the previous year ended March 31, 2019, the Company has called–up and received a sum of ₹ 10 per share and hence the
shares have become fully paid up.



As of
March 31, 2020, entities affiliated with our CEO, Chairman and Managing Director, Raju Vegesna, beneficially owned approximately
85.96% of our outstanding equity shares.



168







| | 37. | Corporate Social Responsibility (CSR) expenditure
| | --- | -------------------------------------------------



Section
135 of the Companies Act, 2013, requires Company to spend towards Corporate Social Responsibility (CSR). The Company is expected
to spend ₹ 17,200 towards CSR in compliance of this requirement. A sum of ₹ 17,200 has been spent during the current
year towards CSR activities as per details given below.



|                                               |  | Amount (₹) |       
|---------------------------------------------- |  | ---------- | ------
|Organization                                   |  | 2019-20    |       
|VIRRD Trust, Dwarakha Tirumala                 |  |            | 15,000
|M/s Thiruvahindrapuram Veda Vidya Trust        |  |            | -     
|Government ITI Bhimavaram IMC Society          |  |            | -     
|Kaviraja Sahitya Viharamu -                    |  |            | -     
|ML Jaisimha Cricket 365 Academy                |  |            | -     
|M/s Sri Saraswathi Vidya Peetham               |  |            | 500   
|Voluntary Health Services  Hospital,  Taramani |  |            | 1700  
|Total                                          |  |            | 17,200



| | 38. | Capital Management
| | --- | ------------------



The
Group's capital comprises equity share capital, share premium, and other equity attributable to equity holders. The primary objective
of Group's capital management is to maximize shareholders value. The Group manages its capital and makes adjustment to it in light
of the changes in economic and market conditions. The Group does so by adjusting dividend paid to shareholders. The total capital
as on March 31, 2020 is ₹ 11,351,308 (Previous Year: ₹ 10,778,828). No changes were made in the objectives, policies
or processes for managing capital of the Group during the current and previous year.



169







Item19. Exhibits



|Number |  | Description                                                                                                                                                                                                                                                                                        
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                    
|1.1    |  | Amended Articles of Association of Sify Technologies Limited. (1)                                                                                                                                                                                                                                  
|       |  |                                                                                                                                                                                                                                                                                                    
|1.2    |  | Memorandum of Association of Sify Technologies Limited. (2)                                                                                                                                                                                                                                        
|       |  |                                                                                                                                                                                                                                                                                                    
|1.3    |  | Amendment of Memorandum of Association. (3)                                                                                                                                                                                                                                                        
|       |  |                                                                                                                                                                                                                                                                                                    
|2.1    |  | Description of Securities registered under Section 12 of the Exchange Act                                                                                                                                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                    
|2.2    |  | Deposit Agreement, dated as of October 18, 1999, among Sify Technologies Limited, Citibank, N.A. and holders from time to time of American Depository  Shares  evidenced by American Depository Receipts issued thereunder (including, as an exhibit, the form of American Depository Receipt). (4)
|       |  |                                                                                                                                                                                                                                                                                                    
|2.3    |  | Amendment No. 1 to Deposit Agreement among Sify Technologies Limited, Citibank, N.A. and holders from time to time of American Depository  Shares  evidenced by American Depository Receipts issued thereunder (including, as an exhibit, the form of American Depository Receipt). (4)            
|       |  |                                                                                                                                                                                                                                                                                                    
|2.4    |  | Amendment No. 2 to Deposit Agreement among Sify Technologies Limited, Citibank, N.A. and holders from time to time of American Depository  Shares  evidenced by American Depository Receipts issued thereunder (including, as an exhibit, the form of American Depository Receipt). (5)            
|       |  |                                                                                                                                                                                                                                                                                                    
|2.5    |  | Subscription Agreement dated November 10, 2005 between Sify Technologies Limited and Infinity Capital Ventures, LP. (9)                                                                                                                                                                            
|       |  |                                                                                                                                                                                                                                                                                                    
|2.6    |  | Standstill Agreement dated November 10, 2005 by and among Sify Technologies Limited, Infinity Capital Ventures, LP and Mr Raju Vegesna. (9)                                                                                                                                                        
|       |  |                                                                                                                                                                                                                                                                                                    
|2.7    |  | Shareholders’ Agreement dated December 20, 2005 between Sify Technologies Limited, Infinity Satcom Universal (P) Limited, and Sify Communications Limited (erstwhile subsidiary). (10)                                                                                                             
|       |  |                                                                                                                                                                                                                                                                                                    
|2.8    |  | Shareholders’ Agreement dated November 25, 2005 between Sify Technologies Limited and Man Financial. (11)                                                                                                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                    
|4.1    |  | Associate Stock Option Plan 2000 (6)                                                                                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                    
|4.2    |  | Associate Stock Option Plan 2002 (6)                                                                                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                    
|4.3    |  | Associate Stock Option Plan 2005 (12)                                                                                                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                    
|4.4    |  | Associate Stock Option Plan 2007 (14)                                                                                                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                    
|4.5    |  | Associate Stock Option Plan 2014                                                                                                                                                                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                    
|4.6    |  | Form of Indemnification Agreement. (7)                                                                                                                                                                                                                                                             
|       |  |                                                                                                                                                                                                                                                                                                    
|4.7    |  | License Agreement for Provision of Internet Service, including Internet Telephony dated as of April 1, 2002 by and between Sify Technologies Limited and the Government of India, Ministry of Communications and Information Technology, Department of Telecommunications, Telecom Commission. (3) 
|       |  |                                                                                                                                                                                                                                                                                                    
|4.8    |  | Bank Guarantee, dated as of November 4, 1998. (2)                                                                                                                                                                                                                                                  
|       |  |                                                                                                                                                                                                                                                                                                    
|4.9    |  | Agreement, dated November 10, 2004, between Sify Technologies Limited, Satyam Computer Services Limited, SAIF Investment Company Limited and Venture Tech Solutions Pvt. Ltd. (8)                                                                                                                  
|       |  |                                                                                                                                                                                                                                                                                                    
|4.10   |  | Subscription Agreement dated March 24, 2008 between Sify Technologies Limited and Infinity Satcom Universal Private Limited. (13)                                                                                                                                                                  



170







|4.11 |  | Scheme of Amalgamation between Sify Communications Limited with Sify Technologies Limited and their respective shareholders (15)                                                                                                                            
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                             
|4.12 |  | Subscription agreement dated October 22, 2010 between Sify Technologies Limited and Mr Ananda Raju Vegesna, Representative of the entities and affiliates in India of Mr Raju Vegesna, CEO, Chairman and Managing Director of the company. (16)             
|     |  |                                                                                                                                                                                                                                                             
|4.13 |  | Amendment to subscription agreement dated September 7, 2011between Sify Technologies Limited and Mr Ananda Raju Vegesna, Representative of the entities and affiliates in India of Mr Raju Vegesna, CEO, Chairman and Managing Director of the company. (17)
|     |  |                                                                                                                                                                                                                                                             
|8.1  |  | List of Subsidiaries.                                                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                             
|11.1 |  | Code of Conduct and Conflict of Interest Policy (6)                                                                                                                                                                                                         
|     |  |                                                                                                                                                                                                                                                             
|12.1 |  | Rule 13a-14(a) Certification of Chief Executive Officer                                                                                                                                                                                                     
|     |  |                                                                                                                                                                                                                                                             
|12.2 |  | Rule 13a-14(a) Certification of Chief Financial Officer                                                                                                                                                                                                     
|     |  |                                                                                                                                                                                                                                                             
|13.1 |  | Section 1350 Certification of Chief Executive Officer                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                             
|13.2 |  | Section 1350 Certification of Chief Financial Officer                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                             
|15.1 |  | Consent of ASA & Associates LLP in respect of the Sify Technologies Limited                                                                                                                                                                                 





|101.INS*** |  | XBRL Instance Document                                        
|---------- |  | --------------------------------------------------------------
|           |  |                                                               
|101.SCH*** |  | XBRL Taxonomy Extension Schema Document                       
|           |  |                                                               
|101.CAL*** |  | XBRL Taxonomy Extension Calculation Linkbase Document         
|           |  |                                                               
|101.DEF*** |  | XBRL Taxonomy Extension Definition Linkbase Document          
|           |  |                                                               
|101.LAB*** |  | XBRL Taxonomy Extension Label Linkbase Document               
|           |  |                                                               
|101.PRE*** |  | XBRL
        Taxonomy Extension Presentation Linkbase Document



____________



| | (1) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on October 17,
2007 and incorporated herein by reference.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Previously filed as an exhibit to Amendment No. 1 to the Registration Statement on Form F-1 filed
with the Commission on October 4, 1999 and incorporated herein by reference.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on October 17,
2007 and incorporated herein by reference.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Previously filed as an exhibit to the Post-Effective Amendment No. 1 to Form F-6 filed with the
Commission on January 5, 2000 and incorporated herein by reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Previously filed as an exhibit to the Registration Statement on Form S-8 (File No. 333-101322)
filed with Commission on November 20, 2002 and incorporated herein by reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Previously filed as an exhibit to the Annual Report on Form 20-F filed with the Commission on June
29, 2004 and incorporated herein by reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Previously filed as an exhibit to Amendment No. 2 to the Registration Statement on Form F-2 filed
with the Commission on October 13, 1999 and incorporated herein by reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on November
30, 2004 and incorporated herein by reference.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | (9) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on November
21, 2005 and incorporated herein by reference.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on December
7, 2005 and incorporated herein by reference.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------



|*** | IN ACCORDANCE WITH THE TEMPORARY HARDSHIP EXEMPTION PROVIDED BY RULE 201 OF REGULATION S-T THE DATE BY WHICH THE INTERACTIVE DATE FILE IS REQUIRED TO BE SUBMITTED HAS BEEN EXTENDED BY SIX BUSINESS DAYS.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



171







| | (11) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on December
23, 2005 and incorporated herein by reference.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | (12) | Previously filed as an exhibit to the Annual Report on Form 20-F filed with the Commission on June 30,
2006 and incorporated herein by reference.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | (13) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on April 14,
2008 and incorporated herein by reference.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------



| | (14) | Previously filed as an exhibit to the Report on Form 20-F filed with the Commission on October
11, 2008 and incorporated herein by reference.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | (15) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on January 23,
2009 and incorporated herein by reference.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------



| | (16) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on November
15, 2010 and incorporated herein by reference.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | (17) | Previously filed as an exhibit to the Report on Form 6-K filed with the Commission on September
8, 2011 and incorporated herein by reference.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------



172







SIGNATURES



The company hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual
Report on its behalf.



|                    | SIFY TECHNOLOGIES LIMITED
|------------------- | -------------------------
|                    |                          
|                    | By:                      
|                    | Name:                    
|                    | Title:                   
|                    |                          
|                    | By:                      
|                    | Name:                    
|Date: July 27, 2020 | Title:                   



173