Tejas Networks Limited — M&A Activity 2022

Sep 29, 2022

September 29, 2022

The Secretary The Secretary National Stock Exchange of India Ltd BSE Limited Exchange Plaza, C/1, Block G, P J Towers, Dalal Street, Fort, Bandra Kurla Complex, Bandra (East) Mumbai – 400 001 Mumbai – 400 051 BSE Scrip Code: 540595 NSE Symbol: TEJASNET

Dear Sirs/Madam,

Re: Intimation of the outcome of the meeting of the Board of Directors of Tejas Networks Limited ("Company" or "Transferee Company") held on September 29, 2022 and disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended ("Listing Regulations")

In compliance with Regulation 30 read with Schedule III of the Listing Regulations, we wish to inform that the Board of Directors of the Company ("the Board") at its meeting held through Video-Conference today i.e. Thursday, September 29, 2022 at 7:45 A.M and concluded at 8:45 A.M. The meeting inter alia transacted the following businesses:

• 1. Approved Draft Scheme of Amalgamation of Saankhya Labs Private Limited ("Saankhya") and its subsidiary Saankhya Strategic Electronics Private Limited ("SSE") (Collectively referred as "Transferor Companies") with the Company and their respective shareholders under Sections 230 to 232 of the Companies Act, 2013 ("Scheme"), which inter alia provides for:
  • a) merger of the Transferor Companies with the Company, and dissolution of Transferor Companies without winding up;
  • b) The Appointed Date of the Scheme is July 01, 2022; and
  • c) Issuance of equity shares of the Company to the shareholders of the Saankhya in accordance with the Share Exchange Ratio (as defined under the Scheme) and various other matters consequential or integrally connected therewith, which would be listed on the BSE Limited and the National Stock Exchange of India Limited (collectively referred to as "Stock Exchanges").
• 1. Authorised execution of the Implementation Agreement ("IA") between the Company, Saankhya and the shareholders of Saankhya, which sets out, inter-alia, the rights inter-se the parties for giving effect to the proposed amalgamation contemplated under the Scheme.

The Scheme is subject to receipt of necessary approvals from the jurisdictional National Company Law Tribunal, Stock Exchanges, the Securities and Exchange Board of India, Shareholders, Creditors and such other persons and authorities, as may be required.

In terms of the Listing Regulations read with SEBI Circular No CIR/CFD/CMD/4/2015 dated September 9, 2015, we are furnishing herewith the details of the Scheme and IA as Annexure I and Annexure II.

The above information is also being made available on the website of the Company at www.tejasnetworks.com.

A copy of the Press Release issued by the Company is enclosed herewith.

Kindly take the above information on record and acknowledge.

Yours sincerely For Tejas Networks Limited

RANGACHARI RAVIKRISHNA N Digitally signed by RANGACHARI RAVIKRISHNAN Date: 2022.09.29 21:08:01 +05'30'

N R Ravikrishnan General Counsel, Chief Compliance Officer and Company Secretary

Annexure I – Brief details of Amalgamation / Merger

a)NameoftheTejas Networks Limited -Consolidatedas on June 30, 2022
	entity(ies)forming part of	Total assets : INR 2,871.04 Crore
	theamalgamation/	Net worth : INR 2,539.89 Crore*
	merger, detailsin brief such as	Turnover : FY 2022 : INR 550.59 Crore; Q1 2023 : INR 125.76 Crore
	size,turnoveretc	* Net worth doesn't include Money received against share warrantsamounting to Rs. 100 cr as of June 30, 2022.
		Saankhya Labs Private Limited – Consolidated as on June 30, 2022
		Total assets : INR 137.56 Crore
		Net worth : INR 95.23 Crore #
		Turnover : FY 2022 : 108.75 Crore; Q1 2023 : INR 35.75 Crore
		#Including Fair value of Equity shares measured at FVTPL
		Saankhya Strategic Electronics Private Limited – Standalone as on June 30,
		2022
		Total assets : INR 1.16 Crore
		Net worth : INR 0.92 Crore
		Turnover : FY 2022 : 3.24 Crore; Q1 2023 : INR 0.41 Crore
b)	Whetherthetransactionwouldfall	Yes, Saankhyais a majority owned and controlled subsidiary of the Company andSSE is a wholly owned subsidiary of Saankhya and as such all companies involvedin the transaction are related parties to each other.
	withinrelatedpartytransactions? Ifyes,whetherthesameisdone at "arms'length"	However, in terms of General Circular No. 30/2014 dated July 17, 2014 issued byMinistry of Corporate Affairs ("MCA Circular"), the transactions arising out ofcompromises, arrangements and amalgamations under the Companies Act,2013 ("Act"), will not attract the requirements of Section 188 of the Act.The consideration for the amalgamation is being discharged on an "arm's length"basis.

c)	Areaof
	business of theentity(ies)	Saankhya Labs Private Limited, is a company incorporated under the1.provisions of the Companies Act, 1956. Saankhya is engaged in the businessof wireless communication products for telecom, satcom and broadcastindustries. Focus areas of Saankhya includes wireless semiconductor,telecom infrastructure, Software Defined Radio (SDR), and Cognitive Radiotechnologies. Saankhya provides wireless products to telecom operatorswhich include 5G Radio Access Network (RAN) and Network automation andmanagement software. Broadcast radio heads and mobile receiver productsof Saankhya are designed for convergence of broadcast and telecomnetworks, and its satcom products include satellite IoT solutions for trackingrailway locomotives and sea vessels.The Transferee Company holds 64.40%of the total outstanding equity share capital of Saankhya.
		Saankhya Strategic Electronics Private Limited, is a company incorporated2.under the provisions of the Companies Act, 2013. SSE was incorporated withthe main objective to develop, maintain and service all types ofcommunication systems, electronic products, semiconductor integratedcircuits/ chips, micro controllers, digital signal processors, processingalgorithms, embedded software and related hardware and software. SSE isa wholly owned subsidiary of Saankhya.
		Tejas Networks Limited ("Transferee Company") is a company incorporated3.under the provisions of the Companies Act, 1956. The Transferee Companyis an optical and data networking products company, that designs, developsand manufactures high-performance and future-ready products for buildinghigh-speed communication networks that carry voice, data and video trafficfrom fixed line, mobile and broadband networks. The Transferee Company'sproducts are differentiated by a programmable, software defined hardwarearchitecture that provides flexibility, multigeneration support and aseamless software-enabled network transformation to its customers. TheTransferee Company's customers include telecommunications serviceproviders, internet service providers, web-scale internet companies, utilitycompanies, defense companies and government entities. The equity sharesof the Transferee Company are listed on the BSE Limited and the NationalStock Exchange of India Limited.
d)	Rationaleforamalgamation/merger	The Transferor Companies, are direct/indirect subsidiaries of the TransfereeCompany. It is proposed to integrate their businesses to achieve followingbenefits:

			enhancementofoperational,organizationalandfinancialefficiencies, and achieve economies of scale by pooling ofresources;
			achieve synergies in revenue, costs, operations, and stronger basefor future growth;
			an integrated and coordinated approach to business will allow for amore efficient allocation of capital and cash management;
	further expand and grow all business into the internationalmarkets;
			reduction in the multiplicity of legal and regulatory compliancescurrently required to be carried out by Transferor Companies andthe Transferee Company;
			consolidation of administrative and managerial functions andelimination of multiple record-keeping, inter alia other expenditureand optimal utilization of resources
			adaptation of best practices and in enhancing mechanisation/automation of various processes through latest technologies.
			Streamlining of the corporate structure; and
			improved organizational capability and leadership, arising from thepooling of human capital that has diverse skills, talent, and vastexperience to compete in an increasingly competitive industry.
			The amalgamation is in the interest of all the companies, their respectiveshareholders, creditors and all other stakeholders and is not prejudicial to theinterests of the concerned shareholders, creditors or the public at large.
e)	In case of cashconsideration –amountorotherwiseshare exchangeratio	Upon the Scheme coming into effect and in consideration of the amalgamationof Saankhya with the Transferee Company, the Transferee Company shall,without any further application, act, consent, instrument or deed, issue andallot, on a proportionate basis to each shareholder of Saankhya, whose name isrecorded in the register of members as member of Saankhya as on the EffectiveDate, as under:

5 | 8

		For every 100 equity shares of face value of INR 10 (Indian Rupees Ten) eachheld in Saankhyashall be issued 112 equity shares of face value of INR 10(Indian Rupees Ten) each as fully paid-up in the Transferee Company.
		Since SSE is wholly owned subsidiary of Saankhya, which will amalgamate withthe Transferee Company pursuant to this Scheme, no consideration will beissued for the amalgamation of SSE with the Transferee Company.
		M/s. SPA Valuation Advisors Private Limited (Registration No. IBBI/RVE/05/2021/148), Registered Valuer, has issued the Share Exchange Ratio Reportdated September 29, 2022 ("Share Exchange Ratio Report"), describing themethodology adopted by them in arriving at the share exchange ratio.
					M/s. V. B. Desai Financial Services Limited, an Independent SEBI registeredCategory-I Merchant Banker, has issued fairness opinion stating that the shareexchange ratio determined under the said share exchange ratio report is fair.
f)	Brief details ofchangeinshareholding	Pursuant to the Scheme, the pre and post shareholding pattern of the Companywill be as follows:
	pattern (if any)	Pre-Scheme			Post Scheme
	of listed entity	As on 30thJune 2022	No of Shares	%Holding	Basisshareholding30thasonJune 2022	No of Shares	%Holding
		Promoters	7,94,01,810	52.40	Promoters	7,94,01,810	51.10
		Non	7,21,22,208	47.60	Non	7,59,93,292	48.90
		Promoters			Promoters
		Total	15,15,24,018	100.00	Total	15,53,95,102	100.00

For Tejas Networks Limited

RANGACHARI RAVIKRISHNA N Digitally signed by RANGACHARI RAVIKRISHNAN Date: 2022.09.29 21:08:31 +05'30'

N R Ravikrishnan General Counsel, Chief Compliance Officer and Company Secretary

Annexure II – Implementation Agreement not in normal course of business

a)	Name(s)ofpartieswithwhomtheagreement is entered	Implementation Agreement ("IA") has been enteredinto amongst Tejas Networks Limited, Saankhya LabsPrivate Limited and shareholders of Saankhya LabsPrivate Limited.
b)	Purpose of entering into the agreement	IAinter-aliasets out the rights inter-se thepartiesforgivingeffecttotheproposedamalgamationcontemplatedundertheSchemeandtherepresentations and warranties being given by eachparty.
c)	Shareholding, if any, in the entity withwhom the agreement is executed	As on date, the Company holds 64.40% of shares inSaankhya.
d)	Significant terms of the agreement (inbrief) special rights like right to appointdirectors, first right to share subscriptionin case of issuance of shares, right torestrict any change in capital structureetc.;	The IA, inter alia, sets out the framework of theamalgamation,themannerofimplementationthereof and the rights and obligations of the Partiesin relation to the amalgamation.
e)	Whether, the said parties are related topromoter/promotergroup/groupcompanies in any manner. If yes, nature ofrelationship	Yes, Saankhyais the subsidiary of the Company andas such both the companies are related parties toeach other.
f)	Whether the transaction would fall withinrelated party transactions? If yes, whetherthe same is done at "arms length"	Yes, Saankhyais a majority owned and controlledsubsidiary of the Company and as such both theCompanies involved in the transaction are relatedparties to each other.However, in terms of General Circular No. 30/2014dated July 17, 2014 issued by Ministry of CorporateAffairs ("MCA Circular"), the transactions arising outof compromises, arrangements and amalgamationsunder the Companies Act, 2013 ("Act"), will notattract the requirements of Section 188 of the Act.
		The transaction contemplated in the agreement is inconnection with the Scheme and the consideration

		under the Scheme is being discharged on an "arm'slength" basis.
g)	In case of issuance of shares to the parties,details of issue price, class of shares issued	Not applicable
h)	Any other disclosures related to suchagreements, viz., details of nominee onthe board of directors of the listed entity,potential conflict of interest arising out ofsuch agreements, etc;	Not applicable
i)	In case oftermination or amendment ofagreement, listed entity shall discloseadditional details to the stock exchange(s):a)name of parties to the agreement;b)nature of the agreement;c)date of execution of the agreement;d)details of amendment and impactthereof or reasons of terminationand impact thereof.	Not applicable

For Tejas Networks Limited

RANGACHARI RAVIKRISHNA N Digitally signed by RANGACHARI RAVIKRISHNAN Date: 2022.09.29 21:08:48 +05'30'

N R Ravikrishnan General Counsel, Chief Compliance Officer and Company Secretary

Press Release

Tejas Networks Board approves amalgamation of Saankhya Labs with the Company

Bengaluru, September 29, 2022: Tejas Networks [BSE: 540595, NSE: TEJASNET] ("Company") had acquired 64.40% of shares of Saankhya Labs Private Limited ('Saankhya Labs') in July 2022. In view to consolidate and merge the operations of Saankhya Labs and its subsidiary, Saankhya Strategic Electronics Private Limited ("Saankhya Strategic") with the Company, the Board of Directors of Tejas Networks have approved a scheme of amalgamation through a National Company Law Tribunal ("NCLT") approved process.

As consideration for the said amalgamation and based on the independent valuation report and fairness opinion, issued by the Registered Valuer and Independent Merchant Banker, respectively, the Company will issue 3,871,084 equity shares of Tejas Networks to Saankhya Labs shareholders holding 35.60% equity shares, using the swap ratio of 112 shares of Tejas Networks for 100 shares of Saankhya Labs. The Appointed Date for the amalgamation has been fixed as July 1, 2022.

The proposed amalgamation will expand Tejas's wireless offerings by adding Saankhya Lab's 5G Open RAN (ORAN), 5G cellular broadcast and satellite communication products, in addition to enhancing the Company's expertise in fabless semiconductor chip design. This amalgamation is expected to enhance operational, organizational and financial efficiencies, help achieve economies-of-scale by pooling of resources, drive synergies in revenue, costs and operations, and will help build a stronger base for future growth of the Company's business.

The proposed amalgamation is subject to necessary approvals by SEBI, shareholders of the Company, Saankhya Labs, Saankhya Strategic, NCLT and other statutory and regulatory bodies, as may be required. Till such approvals are received, Saankhya Labs and Saankhya Strategic will continue to operate as majority-owned subsidiaries of Tejas Networks Limited.

RANGACHARI RAVIKRISHNA N Digitally signed by RANGACHARI RAVIKRISHNAN Date: 2022.09.29 21:10:18 +05'30'

About Tejas Networks Limited

Tejas Networks Ltd. designs and manufactures high-performance wireline and wireless networking products for telecommunications service providers, internet service providers, utilities, defence and government entities in over 75 countries. Tejas Networks Ltd. is a part of the Tata Group, with Panatone Finvest Ltd. (a subsidiary of Tata Sons Pvt. Ltd.) being the majority shareholder.

	For more information, visit Tejas Networks Ltd. at http://www.tejasnetworks.com or contact
Investor Relations:	ir@india.tejasnetworks.com
Attn: Mr. Santosh Kesavan:	skeshavan@india.tejasnetworks.com Phone: +91 80 41794600

About Saankhya Labs

Saankhya Labs, a subsidiary of Tejas Networks, is a 5G disruptor with a breadth of wireless communication system expertise. Saankhya offers a wide range of communication products and solutions for 5G NR, Broadcast and Satellite Communication applications. With several International technology patents and unique 'chips-to-systems' expertise, Saankhya's solutions include world's first production SDR, next gen open RAN Solutions for 5G networks, multi-standard direct to mobile broadcast solutions, and Satellite-IoT products. For more details visit www.saankhyalabs.com

SAFE HARBOUR

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to successfully implement our strategy and our growth and expansion plans, technological changes, our exposure to market risks, general economic and political conditions in India which have an impact on our business activities or investments, changes in the laws and regulations that apply to the industry in which the Company operates. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company.

RANGACHARI RAVIKRISHNA N Digitally signed by RANGACHARI RAVIKRISHNAN Date: 2022.09.29 21:10:51 +05'30'